GQ answer: Gold has always been popular during economic turmoil, but it looks at this point that people have figured out the marketing dynamics involved. The talking heads flog scare stories about economic collapse, generating irrational craving for a hedge. Gold brokers realized that this is their advertising sweet spot and pour money into that advertising demographic. The talking heads realize they can essentially mint their own money by pouring out doom and gloom over the airwaves, and they act accordingly.
[Moderator Note]
Don’t be disingenous, code_grey. Take the political commentary elsewhere. And if you want to dispute a moderator note, take it to ATMB. Don’t discuss it further here.
Colibri
General Questions Moderator
Discussion of moderator action, as Colibri just pointed out, belongs in ATMB, not here.
I will, however, respond to your second sentence. The government can take anything by fiat. It’s called eminent domain. They could pass a law tomorrow forbidding private ownership of guns, rhododendrons, or incandescent light bulbs.
No not my incandescent light bulbs!
For the record, with the value of gold going through the roof, ads to buy gold, something I had never seen before have appeared on French TV too, so it’s not solely an American phenomenon (and there’s no “gold nuts” wanting to get back to a gold currency over here). I didn’t pay attention to the category of channels they were broadcasting these adds on, though.
However I noticed that they were in fact dubbed (and nothing in the very restricted context could help me define in which country they might have been shot). I had assumed that they were generic EU adds, but when I think of it, I didn’t pay much attention to the kind of bills the happy people who had sold their gold to the company were holding in their hands. I assumed euros, but for all I know, it could be dollars, pounds, or even an unexisting generic “currency”. I’ll try to pay attention next time.
[quote=“Gary “Wombat” Robson, post:63, topic:517433”]
I will, however, respond to your second sentence. The government can take anything by fiat. It’s called eminent domain. They could pass a law tomorrow forbidding private ownership of guns, rhododendrons, or incandescent light bulbs.
[/QUOTE]
that is correct. However, the probability of government measures to prohibit or confiscate various items is not the same for every possible item. For various assets the inherent “political risk” is different, and based on experience of many historical dictatorships out there the risk for gold and foreign currency is relatively high. IMHO this is an important point to realize for people who listen to too much “right wing” gold marketing.
And anyone who bought it when you bumped this thread would be very unhappy.
Was there a point to that bump, Bricker? One that wasn’t proven completely wrong by mine?
Coincidentally, when the OP was penned on Nov 13, 2009, the S&P 500 index was fairly close to the price of gold.
Then:
S&P: 1093.48
Gold: $1107.50
Yesterday, March 23rd:
S&P: 2104.42, an increase of 92%
Gold: $1181.4, an increase of 6.7%, which hasn’t kept up with inflation.
The time pattern can be seen in this chart. Gold dipped below $1500 in April 2013, and hasn’t been seen there since.
http://wm40.inbox.com/thumbs/82_130b3c_ba385d29_oP.png.thumb
The OP discusses something very real. Dick Morris pushed this 2011 tract which told people to dump stocks and buy gold. Bad advice. Bill O’Reilly shilled for gold retailer Rosland Capital in 2009, though Fox News later demanded he drop that contract. He advised his audience to buy gold because he said the US dollar was under attack. Such hysteria proved unfounded. Ron Paul is an infamous gold bug.
One piece of good news though. Goldline, which received glowing endorsements from Glenn Beck and others described upthread, has been investigated by law enforcement. In 2012, they agreed to refund $4.5 million to former customers and change their, “Unfair sales practices”. Details of the settlement: Goldline agrees to refund up to $4.5 million to former customers
ETA: Prediction: When the Fed funds rate hits 3%, gold will be south of $1500.
I would say that the SDBM advertisements are coming in at about (an optimistic) 1.5 on that scale.
This makes me wonder about the SDMB. Maybe you are all sophisticated and intelligent connoisseurs of cheerleader oopsies, body paint, and regrettable tattoos.
Thanks to tracking cookies, web ads are usually tailored to the individual’s tastes, rather than that of the site. I see none of these ads.
What posters here fail to appreciate is that not all investors have the same objective.
Yes, some investors are looking for big returns so they can get off of food stamps and move out of their parents’ basement, but there are also investors out there who are already wealthy and aren’t as concerned with earning outsized returns. They’re more interested in protecting what they’ve accumulated from things like inflation and currency devaluation.
For these investors, investing a small portion of their portfolio in gold or other commodities might make sense.
Well, I can tell you that those ads aren’t because this is a work computer that is firewalled and restricted out the wazoo. I can’t even go to places like Cracked because WebSense has declared it “tasteless.”
The too poor to reside in one’s own domicile and reliant on food stamps but still has money to invest demographic is definitely underserved by today’s investment firms… :rolleyes:
While this may be true, if you read the OP, you will see that it is being marketed quite differently to right wing media consumers.
Also, weren’t most of the gold investors during the peak of the gold bubble not especially wealthy but rather middle aged, male, professional types of exactly the demographics at which the advertisements were aimed?
Sure, they’d be of above average income but hardly independently wealthy.
Canned goods and guns will be far more valuable.
Only that the suggestion in 2009 that people were going to lose money buying gold was incorrect.
The people who bought collectible gold coins from Goldline, et al. (who were essentially the subject of the thread), probably lost quite a bit of money.
Except that Gold is by no means proof vs inflation. And if the Dollar gets devalued, you better have the previously mentions canned goods and guns.
Huh? Gold has maintained its purchasing power for hundreds of years. That’s why the expected real (inflation-adjusted) return of gold is precisely zero.
An ounce of gold could buy a high quality men’s suit in the time of Shakespeare, and so it does today.
If we assume that your post is saying gold was a good investment at that point, then you saying so was also incorrect. This would be the case even for those who purchased it when the thread was started as well unless they got out right about then.
So congratulations on picking the best point to sell. It’s a shame you didn’t actually say that in your post. Then it might have been worth is weight in… Well, you know. 