US Debt Clock

[blankall]

Originally Posted by oilyfan

This comparison is completely wrong, gold is in an investment not a currency, so it need to be compared to other investments.

"From 1802 to 2001 a dollar invested would have grown to: (Amounts have been adjusted for inflation.)

• Stocks: $599,605
• Bonds: $952
• Bills: $304
• Gold: $0.9"

Even with the past few years massive slides in the market stocks are a better bet than gold. Yes there have been periods of time in the last century where gold has outperformed stocks, but in other times it has been the opposite.

http://money.cnn.com/2010/10/18/pf/i...tune/index.htm

These numbers make the assumption that the business you are buying stock in will be around for 200 years.

When I was 12 I received a stock in LA Gear (a shoe company that made florescent coloured shoes). That stock is worth nothing now.

[Rutuu]

Originally Posted by yads

The federal reserve banks are not the same as the Federal Reserve board of governors. They act as central banks for the regions in the country. The banks that own stock in them cannot sell them nor do they get to control said federal reserve banks. They do, however, get to elect 6 of 9 governors. Their profits are not taxed, because I'm guessing due to the Federal Reserve act their profits belong to the US government. Doesn't make sense to tax your self. Are the IRS profits taxed?

As for your quotes from the audit statement. Do you purposefully omit sections to make your argument? Right above the line you quoted it says:



So while they didn't audit the internal controls over the Fed's reporting they were required to "obtain reasonable assurance" that the numbers they were given were not fabricated.

As for the accounting practices being different. Read Note 4.



The only thing that stands out is due to some elements of the FAM. Management has to make certain estimates/assumptions. They do however amend the numbers in next year's report once the numbers become available.

Furthermore, the US Fed does not print money. That's what the US Treasury does. They do however, buy/sell US T-bills on the open market and hold these types of securities. That's one of the tools they have to set the monetary policy of the country.

Just wanted to quote your post to let you know that not only people that want to argue and make up non-sensical half arguments about gold/real estate being the best investments read your post.

[macker]

Originally Posted by oilyfan

This comparison is completely wrong, gold is in an investment not a currency, so it need to be compared to other investments.



"From 1802 to 2001 a dollar invested would have grown to: (Amounts have been adjusted for inflation.)

• Stocks: $599,605
• Bonds: $952
• Bills: $304
• Gold: $0.9"

Even with the past few years massive slides in the market stocks are a better bet than gold. Yes there have been periods of time in the last century where gold has outperformed stocks, but in other times it has been the opposite.

http://money.cnn.com/2010/10/18/pf/i...tune/index.htm

It is not wrong and was referenced recently by James (Jim) Rickards. http://bespokeinvest.typepad.com/bes...ical-char.html
Shows you how Gold has performed vs the US dollar in most of our life times. The last two years this trend has intensified. Also the performance in the 70's mirrors what we are seeing today. http://www.jhuapl.edu/urw_symposium/...s/Rickards.pdf Is an interesting read for more on his thoughts. Let me know how his numbers are wrong and where you are getting your figures and why you are using the time period of 1802 - 2001. Not relevant to the time period I was quoting.

[ricosuave]

http://money.cnn.com/2010/11/10/news...port/index.htm

[Slava]

With gold specifically it's a timing issue. You can pick a span of time and the figures for that look good. Ove the long term though there is no money in it; it's an inflation hedge.

In the days of the Romans it was said that amounts of gold would get you a nice toga and pair of sandals. In the middle ages it would get you an outfit that would see you fit to greet a king. Arguably today you could get angled suit and outfit to meet the queen. That is not wealth creation; it's not losing to inflation.

Over the shorter term gold might look attractive and "if everything goes the way it should" you might might make a lot of money. In reality though predicting the future is hard. Predicting the future for an entire economic system is virtually impossible!

Lastly there was a comment from the Oracle himself (Warren Buffett) that the value of all of the gold in the world is more than what it would cost to buy every business in the United States today. There is no question in mind that the value of these businesses will far exceed the value of gold a decade or two down the road.

[Cowperson]

For amusement . . . . .

If gold peaked at about $730 an ounce in 1979 and you adjusted for inflation, it would be about $2,196 right now instead of roughly $1,370 that it is.

So, the price of gold, in USA dollars, has to rise about 60% to match inflation from 1979.

The S&P 500 was about 108 as an index in 1979. Inflation would have put it at about 325. Right now its 1,207.

I have an October, 1979 Newsweek in my office, bought at the time, with the cover "All That Glitters . . . . " talking about the phenomenal rise in the price of gold at the time . . . . and it was "only" about $370 an ounce at that moment with two recessions yet to come in the following few years.

Using the $370 number, inflation adjusted the price of gold would be the equivalent of $1,113 . . . . . just a little under the current value and certainly no where near the inflation adjusted performance of the S&P500 through that period.

Nice comeback by gold in the last decade - and helped by the S&P being inflation-adjusted negative for the decade - but generally gold was kind of a dud from the later 1970's.

Cowperson

[macker]

The Original Value Investor.....500 year old advice

"Divide your fortune into four equal parts : stocks, real estate, bonds, and gold. Be prepared to lose on one of them most of the time. During inflation, you will lose on bonds and win on gold and real estate : during deflation, you lose on real estate and win on bonds, while your stocks see you through both periods, though in a mixed fashion. Whenever performance differences cause a major imbalance, rebalance your fortunes back to the four equal parts." Jacor Fugger the Rich 1459-1525
Not sure how Fugger played the currency risk though

As for Buffett his rate of return over the past year has been 3.86% and he is winding down. http://www.gurufocus.com/score_board.php You can use the link to see his portfolio (heavily weighted in US consumption stocks) and also to note that he isn't even in the top quartile of his peer group. He is quick to talk his book any chance he gets and when he started taking out newspaper ads etc. I think his credibility slipped. He was much more intriguing when he didn't let everyone know what he was up to...America can really use his voice now though and maybe this will be part of his legacy....

[Slava]

^it's one year for the return though, and his assets are enormous. The fact is the principals he espouses still hold when managing money. Its just that for him to earn a greater percentage of his assets becomes more and more difficult as those assets increase.

[macker]

Originally Posted by Slava

^it's one year for the return though, and his assets are enormous. The fact is the principals he espouses still hold when managing money. Its just that for him to earn a greater percentage of his assets becomes more and more difficult as those assets increase.

It will also show you returns back to inception. I don't think Buffett likes Gold because it is stable/safe and cannot be easily manipulated with news broadcasts, rating agencies, or the crash and burn of a CEO. Gold is Gold and there is a limited supply on the planet. When Gold goes up it is for a very good reason as it is a sign of financial unrest because it is a stable item. Buffett knows how to play/manipulate the market and knows how the media, government or management short commings can cause a stock to rise or fall. He can also cause fluctations in the market as he sees fit. In the hearings before congress (WHICH HE HAD TO BE SUBOENED FOR) he was asked how the rating agencies could make such large mistakes when rating the banks that failed. He answered that it was all a mistake. Rating companies are paid by the companies they rate so how would you rate a company that is paying you millions of dollars to give them a stock rating. The companies received good ratings because they were manipulated by the rating agencies, which Buffett has also been heavily invested in (13% shareholder of Moodys : top shareholder) and the stock holders. I can see why Buffett doesn't like Gold....It cannot be manipulated in this fashion and therefore it is not an investment tactic used by people like Buffett.
http://blogs.reuters.com/felix-salmo...s-pr-disaster/

[FlamesAddiction]

I love how the average debt per citizen is about $52,000 and the average savings per family is $9,600.

The system is going to completely collapse one day.

[cal_guy]

Originally Posted by macker

It will also show you returns back to inception. I don't think Buffett likes Gold because it is stable/safe and cannot be easily manipulated with news broadcasts, rating agencies, or the crash and burn of a CEO. Gold is Gold and there is a limited supply on the planet. When Gold goes up it is for a very good reason as it is a sign of financial unrest because it is a stable item. Buffett knows how to play/manipulate the market and knows how the media, government or management short commings can cause a stock to rise or fall. He can also cause fluctations in the market as he sees fit. In the hearings before congress (WHICH HE HAD TO BE SUBOENED FOR) he was asked how the rating agencies could make such large mistakes when rating the banks that failed. He answered that it was all a mistake. Rating companies are paid by the companies they rate so how would you rate a company that is paying you millions of dollars to give them a stock rating. The companies received good ratings because they were manipulated by the rating agencies, which Buffett has also been heavily invested in (13% shareholder of Moodys : top shareholder) and the stock holders. I can see why Buffett doesn't like Gold....It cannot be manipulated in this fashion and therefore it is not an investment tactic used by people like Buffett.
http://blogs.reuters.com/felix-salmo...s-pr-disaster/

Safe ha tell that to anyone invested in gold during the early 80s.

[Slava]

Originally Posted by macker

It will also show you returns back to inception. I don't think Buffett likes Gold because it is stable/safe and cannot be easily manipulated with news broadcasts, rating agencies, or the crash and burn of a CEO. Gold is Gold and there is a limited supply on the planet. When Gold goes up it is for a very good reason as it is a sign of financial unrest because it is a stable item. Buffett knows how to play/manipulate the market and knows how the media, government or management short commings can cause a stock to rise or fall. He can also cause fluctations in the market as he sees fit. In the hearings before congress (WHICH HE HAD TO BE SUBOENED FOR) he was asked how the rating agencies could make such large mistakes when rating the banks that failed. He answered that it was all a mistake. Rating companies are paid by the companies they rate so how would you rate a company that is paying you millions of dollars to give them a stock rating. The companies received good ratings because they were manipulated by the rating agencies, which Buffett has also been heavily invested in (13% shareholder of Moodys : top shareholder) and the stock holders. I can see why Buffett doesn't like Gold....It cannot be manipulated in this fashion and therefore it is not an investment tactic used by people like Buffett.
http://blogs.reuters.com/felix-salmo...s-pr-disaster/

That hearing is a giant red herring though. I attended the AGM this year and he explained things very well not only regarding the credit rating agencies, but also regarding Goldman Sachs. I also read the linked "article" when it came out and found it laughable at that time. Fact is that as Moodys largest shareholder he had no actual say in how the business was conducted and wasn't calling the shots for Moodys. Berkshire Hathaway doesn't use an outside rating agency at all, and Moodys was simply an investment. Its easy for the media or those with more of an agenda to say "this guy is the largest shareholder, has made a lot of money and clearly must have been in on something", but simply hoping that isn't the case doesn't make it so.

As far as gold the reasons for his dislike are not anything to do with control. It has to do with utility (there is none for gold, whatsoever), and the fact that we can't eat it, don't burn it and other than dig it out of the ground in one country to put it in a vault in another its pointless. (I'm not entirely sure of the point of that exercise either, but allegedly there is one!).

I'm curious as to the real value of the physical commodity as well. I think that if times got really hard and I had to sell my wedding band I would be lucky to get a couple hundred bucks....I have no clue, but it just doesn't strike me as something worth a whole lot of money. According to the price of gold though that thing is worth a lot more! In fact theoretically that ring should be worth a lot more today than when I bought it right? Sounds great, except I doubt you could actually sell it for more than what it was purchased for! The whole thing reminds me of the saying that "diamonds are a girls best friend"....because they have to be. Once you buy the diamond for her, no one else will buy them from you! This situation isn't a lot different really...except that according to the goldbugs it should be?

[macker]

^^^^

Time will tell....you may not see the value in Gold or other hard assets/commodities that I see as I see Gold as being the most liquid asset you could possibly have. It is demanded and accepted everywhere and before fiat, gold was the medium of exchange. It also has many industrial uses but I am not going to get into that. I will however predict that it goes over $2,000 in the next 5 years and I see Silver as having an even more impressive future ahead as it is still 60% below its all time high whereas Gold is roughly at its all time high. If you adjust Gold to inflation it should be over $2,000 now so my 2K prediction isn't that dramatic. Every 4-6 years there is a recession so whether that comes in 2011, 2012 or 2013 it will come again as we are comming due. What will the Fed do then? They can't possibly print more money. That is when I think you will see the dollar get crushed and maybe even disappear. I stand by my statement that Gold is one of the safest investments you could have in your portfolio and all commodities are going to do well for that matter. If the world economy gets/stays better you are going to make money in commodities, or lose less. If the world economy doesn't get better they will likely try to print more money and once again in this scenerio you are going to make money in commodities, or lose less vs equites and bonds which are also scary here as the yields are at record lows but yet money continues to flow into the bond market. It just doesn't seem right. Neither does Bernanke printing money and holding up Zombie banks and companies when we have clear examples such as Japan where it has been shown that this does not work as 20 years after they began the same process their stock market is still 75% below where it was 20 years ago. Short term Gold likely goes lower and the US dollar higher as everyone is pessimistic on the US dollar but long term gold has to go higher in both scenerios and everytime they print money the commodity, including gold, trade seems more and more like the place you want to be as logically inflation follows. The most artificial recovery in history Enjoy it while it lasts.

[TRIX]

Originally Posted by V

This may partly answer the question.

Is this thing meant to be a joke or what? Did I miss the tone of posting it? Why are there so many arrows?

example: Greece owes Ireland $8.5 - Ireland owes Greece $0.8....NO!

Why not just Greece owes Ireland $7.7? Seems to be redundant and more confusing than it should be

[yads]

Because those debts could have different rates of interest. It's not like you and your buddies who lend each other money with 0 interest.

[TRIX]

why wouldn't the interest be added into the total? yes I know what interest means but I am suggesting for "as of X year" this is the total

no? maybe?