WHO LISTENED TO MMAfia??????????

MMAfia that was the biggest load of anecdotal crap I have ever read. You showed up to post this? At least stevejhx makes up numbers in an attempt to prove his points. What a load of donkey meat.

I own several investment properties in Manhattan as well so I'm not I know what your talking about.

The only anecdotal crap and other misinformed prognostications being posted here are by Juiceman, Spunky, and all the other lemmings.

Back in December, you argued against us.

Now it's March and guess what? You're wrong. A major Bank DID go under. Gold HAS skyrocketed. and guess what's coming next.

Swallow it like a man- you guys were wrong. And will be wrong on many other counts. =]

Why do you all care about money so much?

MMAfia, it's futile to argue with them. However, resistance to long-term market forces is also futile.

Go to nybits.com, check out market rents, and you will see them absolutely, positively at 12x 2004's purchasing prices. That 12x number comes from Fortune Magazine, not me.

If anybody thinks the analysis is wrong - or donkey meat - or made-up numbers, crunch your own, publish them. They're out there. Don't crunch numbers of wishful-thinking investors who want to rent a 1-bedroom for $5,000 again, but real buildings, nice buildings, like 100 Jane, Chelsea Centro, Casa-21, where they're renting for about $3,300. There are some outliers, but I've been watching rents for years, and they're down from about $4,000 to $4,300 just six months ago.

Let them do what they want MMAfia. A year ago only the well-informed could see what was going to happen. Now that it has, all they can hurl is insults.

I understand that if you you one had invested your money in treasury bills over the past 40 yeas it would of been a better investment than to put your money in Gold bullion. I did smile when gold plunged last week and thought of MMAfia during that period of time. It's down like 20 bucks today. I think I will have that nice cold brewskie.

Sorry MMafia gold looks like it's plunging again today. Down 25 bucks. Next stop 700. Now how bouts a nice cold brewskie

You really need to use steve holy Grail 12-1 formula when picking tops and bottoms. I

I truly hate to agree with Spunky, but gold is a very bad long-term investment because unlike silver and platinum, it doesn't have many industrial applications. It's a great conductor, but so is copper at a much lower cost.

That said, gold is priced in dollars, which accounts for about half its increase.

I also don't agree with all of MMAfia's forecasts, but I do believe real estate is in serious trouble. Some banks now won't make co-op loans; they want 25% down or else PMI. And the fact is, never before in the history of the world has so much leverage been used by the masses to buy a single asset class. During the dot.com bust, the few retail investors who invested with margin lost their holdings, but their margins were called before the lenders lost money. That's the way it works. Now, though, if buyers can't pay lenders are stuck with the asset, and are potentially on the hook for a lot of money.

Motto of the day: Imputed rent = market rent. P/E ratio of real estate to rental prices: 12.

History does not lie.

And all the leverage dried up.

Holy Grail formula 12 -1. It's a guarantee

No, Spunky, it's not a guarantee. It's a long-term P/E ratio.

The only guarantee I give is that barring a structural change markets always return to the long-term average. That's the only one I'll give.

Only you and SteveF guarantee that now is the best time to buy and you'll still make money.

All

What are some good sites to find sales history for a property?

pay streeteasy the $10 a month for membership and access the ACRIS database to find lots of interesting history on properties via city filings. among other reasons to do this, it can be very helpful when negotiating to know how much a seller paid for a property and how long the seller has owned it.

Spunky - hearing your opinion on price action of gold is quite amuzing, go sell your MER and C longs at 25% loss befor you stick your nose anywhere on these boards...

Oberon fortunately Mer and C represents less than 1% of my portfolio. On the other hand Gold coins and bars represents probably close to 100% of MMafia portfolio.

Sharise, ACRIS is free at nyc.gov, but it does not include co-op purchases before last year, I think, because they weren't recorded. Now they are.

You can also get the same information from nytimes.com, for free.

I suggest Streeteasy because you can easily compare offer prices to sales prices in table form and then dig deeper using ACRIS by clicking through. I personally find it more seemless and the Streeteasy functionality added for $10 has informed my searches tremendously.

or can always ask stevejhx he'll look it up for you and when he does he'll tell you it's way overpriced and it will definitely go down in price.

the_donald, not sure I understand the question. What do you mean?

Thanks all (except spunky).

kylewest, the only problem with streeteasy is those listing prices are entered by real-estate agents. Helpful data, but unreliable.

sharise your welcome! Anytime I can not be of some help let me know.

Totally agree w/ kylewest, an Insider account is essential (no, I don't work for StreetEasy). stevejhx, the broker does enter the listing price, but it's the same price you'd see on their company's site. Here, the potential buyer gets the pricing history and time on market, plus the actual sale price and of course comparable sale prices. Nothing stops a seller's broker cold like calling their BS on "new to market" or "great price."

Steve, do you just go out of your way to respond to things that don't need responding to? What in the world are you talking about? Of course the offer price is listed by the broker--who else would list it? The final sale price is recorded in ACRIS and listed next to the offer price (most often) in the Streeteasy tables. If the listing broker changes the offer price, it will be reflected on street easy as a changed price. If the system is completely gamed and the initial listing is deleted and a "in contract" or "sold" listing replaces it (and I'm not even sure that is possible), then report it to the site manager--they're very responsive. But I've never seen that. Again, what in the world are you going on about now?

kylewest I am little surprise that a person of your statue and position would be on thread titled WHO LISTENED TO MMAfia??????????

Kylewest, tenemental, check out every single "in contract" listing for 415 Greenwich. They all follow a pattern:

03/23/2006 Listed in StreetEasy with Douglas Elliman at $3,695,000
04/04/2007 Price increased to $3,775,000
04/17/2007 Listing entered contract
07/24/2007 Price increased to $4,000,000

Initial price $3,695,000.
Listing on 4/17/07
Price increased on 07/24/2007 to $4,000,000, after it had entered contract at $3,775,000.

Real estate agents just take properties off the market and put the back on at different prices to show whatever they want. How naive can you be?

spunky, Mel would never stoop to such a level. I guess I was wrong about kylewest.

Even the crackerjack lawyer aboutready wouldn't even think about posting here as well.

"kylewest I am little surprise that a person of your statue"

Did somebody build a statue of kylewest and not tell me?

You don't have to pay streeteasy or anyone else to access ACRIS. It's free for anyone to access . . . .

statue stature what difference does it make it's Friday anything goes.

Which is not to say I'm not a paid in full streeteasy regular . . .er, insider.
But blast, I'm going to sign the contract on Monday (I delayed it from today) for my new coop!!!!! I'll be letting my college age son rent/have my current coop which doesn't mind if he lives there . . .
But still I'm a bit worried and excited about signing for the new place ------ the market being so wiggly, and all.
But I'm going to go ahead and do it!!!!!
And did everyone note that Stevefhx and spunky are finally feelin' the love?
I was supposed to go to DC this weekend, but real estate nerves kept me here. Besides, NYC is better than DC.

poorishlady, how do plan to get the hemp smell out of your apartment before your son moves in? Will the free love anti-establishment meetings be at your new place now?

juiceman, have some mercy. Maybe I'm moving AWAY from the hemp aroma . . . .

Where's that statue of Kylewest? Sounds downright upright.

What is impossible about you steve is that you take exceptions and try to turn them into generalities and in the process attempt to dupe the uninformed into believing your grand pronouncements. Here, of the things on Streeteasy you have to sift through to support your Mr. Smarty-Pants "teacher-teacher-pick-on-me-I-have-the-answer" contribution, you site the bizarre Tribeca Summit at 415 Greenwich with all its twisted history and problems. Hardly the norm. Please. You are just exhausting. And you managed yet again, on yet another thread, to completely shift the content which addressed an initial post about tracking a properties prior sales history to some b.s. about offerring prices being changed at a troubled new development. I think what you are doing on these boards really narcissistic and it sucks.

steve, it's alright that we don't agree on everything- as long as we agree on the most important thing: real estate in manhattan is set for a rocky ride, at best.

and spunky brewster, apparently, it STILL has not gotten into your THICK head that I've been saying to BUY on DIPs to accumulate more and build a larger position.

Gold is not a hard commodity that has commercial and industrial applications. That's not where its value lies. If you're not sure where Gold derives its value from, just ask yourself these question:

Why do the world's largest and most powerful Central Banks keep soooo much Gold in reserve?

I can tell you that they are not building anything. Refresh yourself on the history of currencies, the Gold Standard and its demise (thank you Nixon), the emergence of FIAT paper money and BrettonWoods/BrettonWoodsII agreements. The US, has at its disposal the most powerful weapon- the printing press of dollars, which just happens to conveniently be the world's reserve currency (for now). How nice.

We've seen a similar situation before decades ago where the Fed had to massively inflate the economy to prevent deflation (which is the greater evil between the two), resulting in stagflation as the economy continued to weaken and head into a recession. Then, after some time, a super hawkish Fed chairman will have to step in like Volker did and raise rates (he had to raise them to almost 20%) to stem hyperinflationary pressures. That was when Gold peaked to its $800 record back then. $800 back then in 1980 is worth well more than $2000 in today's worthless paper money. We still have a loooong way to go. And so does real estate. Just in the opposite direction!!!

Steve, baby, naive? You really gonna do me like that?

Those are the "in contract" prices, not the "recorded sales" prices from Acris, which are what kylewest and I were referring to. The fact that StreetEasy has published the information you're referring to means a prospective buyer can look at the games being played and factor them into his/her decision. Imagine how much worse it would be if the only number available was the last one, quoted by the broker with no other reference.

MMafia all kidding aside what do you think of Platinum as a long term investment?

Oh, and, yeah, it's SO funny spunky posted a typo. It's hilarious. The jokes are a riot. Maybe steve can work one into his stand up routine between translating Italian electrical manuals or whatever they are at 12 cents a word.

kylewest, you asked me a question - "Of course the offer price is listed by the broker--who else would list it?" and then regarding the inaccurate data I had mentioned, you said that you'd "never seen that," so I showed you. Then you say I'm narcissistic?

The fact is, if you look at the "In Contract" listings by Douglas Elliman and Core Marketing, most of them follow the same pattern. Some from Corcoran, as well, which are listed as "in contract" with no "in contract" date but a higher sale price than listing price. It's a fact; I checked, because I was curious to see so many properties going up in value in this market.

Sorry if you're a real-estate agent who objects to people doing a little research, checking out lies. And it wasn't me who shifted the topic; sharise did, you answered her, and I corrected you.

I think that what you find "impossible" about me is that I do more research than you do, and point out things that are incorrect with specific examples, rather than just make up dreamy-eyed predictions based on hot air.

Tenemental, I didn't say you were naive. I was talking to kylewest, sorry about the misunderstanding. But given my research (and I did quite a bit) it seems there's plenty of numbers that are massaged on this site.

MMMafia, I really don't know why central banks keep all that gold. They sell it in bits, but maybe George W. would just like to hand it out to multimillionaires in case his tax cuts don't get made permanent.

I think that you'll find, however, that we're not in an inflationary period for one important reason: housing comprises 40% of the CPI, but it is calculated as imputed rent, not at its asset value. Market rents rose along with real estate (though not as much) because it became too expensive for people to buy real estate. But now with credit drying up and real estate crashing, market rents are falling, and they make up 40% of the CPI.

Spunkster, platinum has some very good industrial uses, such as in catalytic converters, drugs and many other things. Gold is used primarily as dental fillings and in certain electronics applications, and as the plating on Rush Limbaugh's microphone. That should tell you something.

Core Marketing is a pretty discredited group and Streeteasy has had to deal with abuse of the system by them a number of times--particularly by their (former?) agent Eklund or something--the ex-porno guy. Again, just like citing Tribeca Summit, your citing of Core is hardly pointing to anything representative. And generally, Streeteasy does a pretty good job of tracking properties. If you see outright abuses report it and they'll address it. Whenever I've pointed something out, they not only look into it but also get back to me and let me know how the problem was resolved. Pretty responsible and concerned about the integrity of their business.

It's amazing how as soon as a poster takes issue with a renter on here he's called an agent and as soon as someone posts something negative about the selling environment he's a bitter renter. Obviously Steve is in the former category. And FWIW, no steve, i'm not a broker for the millionth time on this forum. You don't have to be a broker to not like the way you distort things.

steve, exactly- because imputed rent (which you correctly mention didn't appreciate as high as real estate) is used, the inflation numbers are grossly understated by the govt. This is one of its tools to manipulate publicly released data.

If the government would correctly use Housing Price increases over the previous years, the CPI data would be much higher.

But they use rent, and CPI number is low, and everyone is happy.

Now if rent falls precipitously enough to offset the increase in other classes such as oil, agri, etc. then the CPI would be lower.

Check out this article from Bloomberg- it's a good one:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2SUCQ3Bslk0

Bottom line is, print more US Dollars, the lower it's value will be, the more the dollars it will take to buy the same thing.

Meanwhile, one of Bernanke's first actions was to eliminate the M3 supply, effectively hiding the true amount of money which he planned to blow up.

read this excerpt where Citigroup acknowledges central banks' scheme to suppress Gold prices.

http://www.gata.org/files/CitigroupGoldReport092107.pdf

"Gold undoubtedly faced headwinds this year from resurgent central bank selling, which was
clearly timed to cap the Gold price. Our sense is that central banks have been
forced to choose between global recession or sacrificing control of Gold, and
have chosen the perceived lesser of two evils."

The Central Banks know exactly what is up. They will continue to reinflate and inject more liquidity to get the credit markets going again. And they will try their best to minimize the damage of their inflationary actions by selling Gold on the side (even though its capped as per the Washington Agreement) to bring its price DOWN and lessen the perception of Inlfation.

This is yet another one of the Central Banks' stealthy tools. A very important one at that.

kylewest: "your citing of Core is hardly pointing to anything representative"

And Douglas Elliman? And Corcoran?

And the rest?

No, actually, kylewest, I'm not a bitter renter at all. I'm also an owner. I'm just not stupid enough to listen to real-estate hype when the fundamentals are so out of whack, and buy, as some say, "at any time."

How actually, kylewest, am I distorting things? I tell you that agencies are messing with the data, you pick 1 of the 3 I mentioned, said it was run by a porno-somebody, and failed to comment on the biggest agency in the city, Douglas Elliman, caught doing the same thing, which you then again blame on me: "you site the bizarre Tribeca Summit at 415 Greenwich with all its twisted history and problems."

So what? A lie is a lie. Is a lie is a lie is a lie. And Elliman's brokers do it a lot. And streeteasy isn't catching them, like you claim. You say, "Again, just like citing Tribeca Summit, your citing of Core is hardly pointing to anything representative."

Prove that.

I know you're not an agent, kylewest: you have an apartment for sale that you think is going to earn you a hefty premium. You said it on an earlier post. You therefore take offense at anybody who thinks it's a bad time to buy. Of course you do: you're trying to sell!

You're massively projecting your internal psyche onto me, kylewest. I have distorted nothing. In fact, I have gone through excessive lengths to prove what I am saying with REAL LIVE NUMBERS, and REAL LIVE ECONOMIC THEORY. Those capitalized because they are important. You've added nothing - as far as I can tell - to prove any "distortion" by me. Cite my distortions.

MMAfia, up until about 2000 - with the advent of all these exotic mortgage products - imputed rent accurately reflected real-estate prices because real-estate was prudently financed with 30-year fixed mortgages with 20% down, of no more than 2-3x annual income. Then things went haywire with all those stupid mortgage products, and now it's imploding. We're going back to the olden days of prudent credit.

You know far more about the nature of gold than I do. I just know that it's not of much good to industry, and I don't want to own it. I don't like owning anything that doesn't pay a return.

Commodity prices are driven by stupid ethanol - which takes more energy to produce than it creates - and BRIC, which are still growing apace.

And, kylewest, we'll add you you answered bobert on another thread about listing history:

"With new construction, a lot of games get played and it is very difficult to decipher exactly what is going on from the listing history."

Exactly contradicting EVERYTHING you just said here.

WHAT A 2-FACED LIAR! At some level you must realize that people who can read can also read more than 1 thread.

Hereafter, everything you say anywhere should be discounted by all.

steve, main thing is, in the area that we both do know a lot about, manhattan real estate, our analysis points to the same conclusion. The jeproxes arguing against us are simply still stuck in the denial phase.

MMAfia, you're right. Check out my posts on "Why is this not selling?" Well I told them.

And of course more nonsense on Whats going to happen to RE market in NY?

The current disparity between property prices and incomes (as measured by rents) is 2x: twice as expensive to buy as to rent. If property prices don't change and wages (and therefore rents) increase at 3.5% per year, it will take 20 years for wages and rents to catch up to these prices.

Who can wait 20 years to sell their property?

Spunky, how's Citi? Or maybe you've seen some possiblities in MBIA? I could give you some more ideas if you'd like. Basically, I was correct. We've been WAY TOO OVERLEVERAGED. And that will include many very wealthy people who should have had a bit more socked away in ready cash. Quit baiting (or don't, I don't truly care) you petty little cretin.

With the melt down in Gold prices we can all be glad we didn't listen to MMafia.

aboutready as mentioned before my investment in C is less than 1% the value of my portfolio. What I would like to know how did you become so smart as to know that selling your apt in the city several years ago and putting all your assets in real estate in Utica 9or some where in Upstate NY) and then renting in Cooper Village. Who's smarter than you.

SPUNKY BREWSTER, stop taking me out of context. Get it through your thick skull already- Accumulate on the Dips, Sell some positions on price spikes.

If you had done that since last December, you would be sitting VERY WELL right now, even considering unrealized gains vs realized gains at this point.

Before you go off and try to focus on daily trading directions and jump on days when Gold goes down (oh wait, isn't that what you're trying to do here?), remember that we are not day traders here and are Investors instead with time horizons that are months, and for some, even a few years long. This reminds me when you foolishly bought Citigroup stock and started gloating about it when it would go up for a day or two- oblivious to the MASSIVE downward trend over a longer time series that the stock has/is going through. Quite unscrupulous and deceiving I must say.

Gold was $800, barely, back in December when I stated that one should put money into it instead of a downpayment. Even with the pullback we've seen, it's still at $890, and again, if you had followed what I said, you would have sold some of it when it hit $900, and then $1000 to realize the a portions of the gains, while accumulating more now that we have had a pullback.

Gold was $800, barely, back in December when I stated that one should put money into it instead of a downpayment. Even with the pullback we've seen, it's still at $890, and again, if you had followed what I said, you would have sold some of it when it hit $900, and then $1000 to realize the a portions of the gains, while accumulating more now that we have had a pullback

Ha ha ha ha -guess what! Even stevejhx thinks your gold trading strategy is moronic. I could even hear him chuckling.. What's next MMafia a new strategy on how to buy, sell accumulate and than sell more penny stocks.

Anyway off too vacation will check back in a few weeks have fun with your Gold trading techniques. Sounds like a plan to me.

Nice, just as anticipated, the typical Spunky Brewster comeback.

I can see right though your attempt to put a divide among us- pathetically transparent.

Hmm... it's not that 'fun' anymore Spunkster... it's starting to getting tiring like before. I guess the law of diminishing returns applies to you as well... the second time around, while still fun, was not as fun as the first time around. Was hoping you'd come up with new and better rants, but guess I gave you too much credit.

MMAfia is still wrong

I just came across this..... wow, eerie.

Well done, MMAfia...

"What a load of donkey meat."

LMAO! Well done MMAfia, well done.

This is a good post, considering we are now at close to 10k in inventory...

urbandigs
about 11 months ago
ignore this person
report abuse Juice - Very hard to say. Ill guess though, because I think confidence is more important indicator that may lead to higher inventory. But let me do it this way:

6,000 - obsessed followers start to notice
6,500 - active buyers should notice more options
7,000 - sellers should feel some pain via active competition
7,500 - may start to be a problem

all guesses. We are still 2000 units off though in my opinion from having noteworthy trouble. May not happen. I hope it doesnt. If inventory really spikes and prices start to fall, the buyer herd generally gets scared away as no one wants a depreciating asset. That adds fuel to fire and a situation best explained by looking outside our walls. You would think that if prices fall 5% and inventory spikes, buyers will get real excited, but generally that is not the case. If it turns out of favor, its not good for anybody.

I have to talk with streeteasy about taking charts to next level. As of now, all I have is data you see. However, the tool I have in mind is a bit different and will be most useful for buyers trying to analyze general market, neighborhoods and specific bldgs for a prospective purchase

Woah! Blast from the past, and quite frankly, very scary.

To be honest, I'm not sure I'm happy that things turned out the way it did, because if things continue to follow the path that I'm thinking we're heading, then we're in for some very difficult times ahead.

I'm beginning to wish that I'll be wrong.

Hey Juice, brings back some good old memories eh? Now where's spunky when you need him?

LOL, AnneC 6 months ago... "MMAfia is still wrong"

This is good, too!

spunky
about 13 months ago
ignore this person
Rents to increase by 7% in 2008--Check
Rental market still strong in Manhattan--check
Low vacancy rates in Manhattan --check
Job market still strong --Check
Inventory still low -Check
Michael Signet director of sales, Bond New York
%u201CPerhaps surprisingly, despite all the negative press, we are having a busy December. Buyers are certainly a bit more tentative than we have seen in the past but transactions are taking place and prices have remained strong.%u201D--Check
Strong demand for larger apt ie 3 bedrooms --Check
Low inventory --check
Still looking for another investment property in Manhattan -check

buster2056
about 13 months ago
ignore this person
How can you check "Rents to increase by 7% in 2008" if it hasn't happened yet?

Also, 5% US unemployment and ongoing layoffs in the financial sector do not equal a strong job market anywhere...

Certainly the director of sales of an nth tier real estate brokerage has no reason to exagerate or act optimistic...

Spunkster still selectively ignoring real data points and grasping at any straw that supports his theory: CHECK!!

spunky
about 13 months ago
ignore this person
Buster, let's check (no pun intended) back at the end of the year compare notes.

where is spunky?!?! Seriously, where is that dude?

would love to see him respond...

you think he's here under a different alias?

Spunky is not doing well. Besides investing in real estate, he was loading up on C and MER last I heard. Moreover, and/or worse still, he was a corporate headhunter for financial institutions.

Seems three strikes and you're out.

ow ow ow.

From the OP a full 19 months ago:

------------------------------------

"If you had listened to me instead, you would NOT have plunked that 20% downpayment back in Dec last year to buy that overpriced crapartment in Manhattan. Rather, you would have taken that money and invested it in Gold, either via ETF, bullion, or pm mining shares."

"So, unless you absolutely have to Buy now, rent, take that downpayment and invest it in inflation-sensitive asset classes including funds that are hedged in Euros, and wait until 2009. That same downpayment would have grown, prices would have come down enough to make a difference, and that combination means you can get bigger, nicer place for the same money by just being a little patient."

------------------------------------

Well, here we are at the tail-end of 2009.

To those back in 2007 who were thinking of buying, if you took my advice, your downpayment would have appreciated, prices have already come down (and will continue to go down), and if you wanted to buy now, well, guess what?

With that same money, you can now buy a bigger and nicer place.

Here's the rub: if you follow my advice and are even more patient and wait around 2 more years while investing in Gold or similar anti-dollar asset classes, you can buy and even BIGGER and NICER place with the same money.

And you should. The main course is still coming.

I have to admit, I've been a little aggressive with my estimate on when the real crisis will start. I thought it would start this fall (it still could happen), but there is a good chance it will happen in 2010 instead.

And when it happens- you better posses physical assets and only have enough liquid fiat monopoly money to facilitate transactions for necessities such as food.

"I truly hate to agree with Spunky, but gold is a very bad long-term investment because unlike silver and platinum, it doesn't have many industrial applications. It's a great conductor, but so is copper at a much lower cost.

That said, gold is priced in dollars, which accounts for about half its increase"

Looks like another winner prediction by stevejhx. Is this where steve will say he was wrong and MMAfia was right?

JuiceMan, you are getting desperate. I wouldn't buy gold at this price or any other. Not even dentists use it anymore. All driven by ETF's.

BTW, did I make a prediction of gold's price?

Nope.

can we all agree that the gold trade is all about a global lack of trust in fiat currencies after an enormous credit event and actions taken by central banks across the world to print their way out a debt deflationary spiral?

hyperinflation? dont think so. you will see inflation come though over the years in the form of higher food, higher energy, higher taxes, higher rates, higher health care costs, higher commodities in general. The stuff that cuts into profit margins and squeezes consumers wallets.

like an umpire that makes a bad call, as long as your consistent!!!

gold is the anti-fiat currency trade. period

Well that's too bad, because fiat currencies are far more useful than the gold (or any other) standard.

I think the Indians would agree (RE Gold), they just bought a bit of the non-used metal. There are a lot of teeth to fill in India...:)

No, but you called MMAfia out on many occasions (including in this thread) and said he was wrong about gold.

yes, but gold will be transferable for much more of the paper stuff by the time this crisis's wrath is finished. it already is exchangeable for way more paper stuff to buy things than houses, stocks, etc.. over the past 3-4 years.

"and said he was wrong about gold."

Never said any such thing.

You're becoming a bit of a parasite, JuiceMan, maniacally trying to prove me wrong as Manhattan real estate crashes 30% from peak. I have always said the same thing: I don't care what is happening to gold, I'm not buying it.

hee hee hee

hee hee who?

that is true, steve did say that a number of times.

Thank you, UD.

I've been buying physical gold (mostly US 1 oz Gold Eagles, but also 10 oz bars with assays). Just added some more the other day.

I love that some people say "I don't care what is happening to gold, I'm not buying it.". These are the same type of people who will end up buying at $2,000+ per ounce, having missed the run up.

I doubt more than 1% of the US population owns physical gold or gold etfs. A lot of potential new buyers for this market.

Apology accepted, JuiceMan.

Modern: I have considered buying some French 20 francs, brit. sovereigns or gold eagles. Is this strictly a diversification move for you or do you see a time fiat currency becomes virtually worthless? Perhaps this question is sounding a bit to "gold buggy"....

Not many people buy physical gold and most of the ones I know who do think it will be used for buying food some day.

the thing i don't understand about this point of view is why (in the world being envisioned here) anyone would be willing to give up food for pieces of metal.

CC: I can't say I understand it either, but I have tried...

who is giving up food? Either my paper money is sitting in cash waiting to be withdrawn to buy food, stocks waiting to be sold to buy food, cd's/bonds waiting to mature and generating interest waiting to buy food, housing waiting to be sold or equity cashed out to buy food, or precious metals to buy food.

so, why not be in an asset class that hedges against paper stuff when paper stuff is being printed massively across the globe in response to a bust in housing/credit?

The gold bar I bought NOV 2008, the only physical piece I have, was 100g and cost $2,425 of paper stuff that I would use to buy food. Now the same bar can be sold on ebay for $3,647 with 7 hours left to go in the auction

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&Item=120485484670&Category=39484&_trkparms=algo%3DLVI%26its%3DI%26otn%3D1

Did I give up any food? No, of course not. But I have more paper stuff if I choose to sell my gold bar to go out and buy food than I would if I kept it in cash in the bank

Good thing, UD, that you didn't buy gold when the gold standard was dropped. Still hasn't recovered its price from 30 years ago.

You are mistaken about fiat currencies - they are far more stable, properly managed, than the gold standard ever was. If you don't believe it, search "Panic" and "19th Century" and see what you come up with.

Massive bouts of inflation and deflation.

Let me do it for you:

http://history1800s.about.com/od/thegildedage/a/financialpanics.htm

If you want to return to that, then bring back the gold standard. Gold is only a hedge against inflation because people think that it is. It has no inherent reason to be, however.

You will also note that in times of war, the gold standard had to be dropped. Viz. the Civil War. The reason? It was impossible to expand the money supply when it needed to be expanded. Then, when the gold standard was reinstituted, there was a depression.

i probably wouldnt bought it then. i only bought it in mid 2007 in mid 600s when I felt a credit event was forthcoming. never bought it before that time. so for me, there was a specific reason to get into it and there will be a time to get out of it.

UD you take a practical approach to this and agree with your logic regarding this metal and it has been a good trade of late, can't argue with that as you illustrate above. I have quite a diverse circle of friends around the globe, some have actually moved to self sustaining farms in the tropics with weapons and gold. They have not yet priced out the "Armageddon" trade. lol? I do spend some time in the tropics as well, but only to surf :).

I'm not knocking the investment opportunity - no doubt it exists and existed and will exist. Just saying that it's purely psychological as there is no underlying demand for gold, which makes it especially dangerous. It's not like it pays dividends, or increases productivity, or is used in a product: not even fillings anymore, as it's too pricey.

The whole thing about "fiat currencies" is a joke: Ron Paul economics. He's still arguing the Jeffersonian argument of whether there is a constitutional right for the government to establish a central bank, and even asked Bernake about it, tried to engage him in an argument as to whether the federal government had a right to issue any money other than "coin."

OMG.

Keith,

I view gold as a hedge against currency devaluation and/or inflation. I don't ever expect to use it to buy food or ammo. It is an investment that perhaps hedges some of my other investments.

Thank you Modern.

The gold discussion is an interesting one.Stevejhx there must be more to it than a "joke" as central banks around the globe seem to have some interest in the stuff.

I wonder if Mr. Greenspan still holds these beliefs:
http://www.constitution.org/mon/greenspan_gold.htm

And central banks around the world could get rid of it (as they often do) without disturbing anything but its price.

Stevejhx - in response to your "no demand for gold" statement..I just dont agree and think this is quickly changing given thsi unique situation and actions taken to stem the crisis globally. whether you believe is another story.

from David Rosenberg:

GOLD-ILOCKS

We are still contemplating the massive gold purchase by the Reserve Bank of India — the largest in at least 30 years that took up half of what the IMF intends to sell. Look for China to come in next.

But here is the reality. All India did was bring gold to a 6% share of its total FX reserves from 4%. Fifteen years ago, that representation was closer to 20%. China has increased its gold holdings by 76% over the past six years but they are a mere 1.9% of the aggregate 2.2 trillion of reserves and Russia’s gold holdings is just under 5%. This is not the 1990s when Bob Rubin was running a hard U.S. dollar policy, U.S. fiscal deficits were vanishing and gold production was on the rise. Today’s world is exactly the opposite. Policymakers beginning in the 1990s wanted disinflation and got it. Now they want inflation — it will take years, maybe a decade, but it will come. For the near-term, we are still optimistic on Treasury securities but be forewarned that this view has an expiry date that is earlier than the peak we are likely to see in gold.

It is very clear that central banks are behaving in a way that would suggest that gold is now again being considered a currency within the global monetary system. As we said before, it is all about relative scarcity and a well-defined supply curve — fiat currency at this juncture does not share that quality. As a good friend reminded me yesterday, when the Fed was created nearly a century ago, it was acceptable to have at least 40% of the money supply backed by gold reserves. The U.S. now has 8,133 tons of gold in reserve, which equates to $285 billion at this year’s pricing.

Meanwhile, the Fed has spiked the punchbowl to such an extent that the monetary base now stands at $1.7 trillion. Do the math — under the old regime (which indeed hamstrung the Fed), the U.S. alone would need to buy an incremental $400 billion of bullion or the equivalent of what would be nearly four times the typical level of annual demand. We could do the same calculation based on M2 but we don’t want anyone falling off their chairs.

http://blogs.reuters.com/felix-salmon/2009/11/04/the-roots-of-the-coming-crash/

channeling Roubini:

Nouriel isn’t saying when the current bubble is going to burst — and if history is any guide, it’s probably going to be a long time before the inevitable happens. Of course, the longer that a bubble continues to inflate, the more painful the subsequent bust.

In that sense, every move upwards in US stocks or gold or the Aussie dollar or junk-bond indices is another step in exactly the wrong direction: it’s a step towards yet another massive crash. And it’s all being turbo-charged by Fed policy. If there’s a painless way out of this situation, I can’t see it.

UD, the point is, they could use gold, platinum, or lithium: any good that is in short supply. That was the purpose of the gold standard. Copper has an industrial use; gold does not. People like it because it's pretty, and inert: it doesn't rust. But there is no reason that central banks HAVE to hold gold, whereas there is a reason why airplane manufacturers HAVE to use aluminum.

That's the point.

i understand that completely..my point is the unique function of gold for this confluence of issues, as opposed to say copper, is not the industrial use and demand tied to global growth, but the alternate currency (not currency in the sense that you will buy food with gold - rather, as an anti-paper form of money) features of this metal. that is my point. i think the difference you do not view gold as money, and I do. it trades in the market as if it were an alternate form of money, whereas its unique features made people view it as a store of value...but you cant print gold. so, gold is a good barometer of trust in the global fiat monetary system that is ruled by central banks.

for a decade or so, CBs have been trying to demonetizing gold...yet now it seems maybe the reverse is starting to happen? So you have a point, and I have a point. We argued this exact point years ago too and we will argue it in the years to come.

"UD, the point is, they could use gold, platinum, or lithium: any good that is in short supply."

This is nonsensical. Gold has been a store of value for 3,000 years. I've never seen a coin made out of lithium (I do own a few platinum coins, which collapsed in value with decreased auto sales, so being used industrially is not always a good thing).