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Gold is a Terrible Investment - According to Dave Ramsey

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Jim Rodgers and I agree with a few things

1.  The dollar is banana'ed long term (banana-ed is a conversion of the F word on our forum by the way) the damage is done it can't be fixed unless we get people like Ron Paul in charge and even if we do we have to burn things down to fix it.

2.  The world will dump the dollar

3.  When that happens we will see 2,000 dollar gold (at least)

4.  It will happen in our lifetimes

5.  We don't know when

There is a lot of "play" yet before the end game but in the end I truly believe the dollar is fatally wounded now.  The key is you have to eat and stay in a home while the "play" continues.  If you are a billionaire buying a few million in gold and setting it aside is a no brainer if you are a typical middle class individual you have to be a lot more strategic because you have so much less to work with.

we bought gold in the 1990's at a little over $300/ounce... but at that time didn't buy any silver. So, we started buying silver this summer when it was around $13/ounce... seems to me the silver still is pretty reasonable.

Cooter Brown:
If I was sitting on a spare million right now, I wouldn't hesitate to slap about $300k in to Gold. As I don't, I'm sticking with Silver.

Jack; I think your analysis of the world (China & GB in particular) divesting themselves of dollar debt as soon as it is possible without major damage to themselves is right on, and it will be a terrible thing to behold.

We are like a speed freak on a run; the longer we keep doping up so much the harder will the crash be.

Dave definitely has strong opinions about investing, but he also warns people not to invest in anything just because someone else said so.  Even himself.  In other words, don't put any serious money into any investment until you understand it backwards and forwards.  (He'll happily point you to a professional investment advisor "with the heart of a teacher" who happens to agree with him.)

His view of gold makes perfect sense from a certain angle.  Up until Nixon, so-much gold equalled so-many dollars and vice versa.  (In Dave-speak, it "kept up with inflation" as they revalued the dollar in terms of gold a few times since 1792.)  And for a lot of that time it was impractical or illegal for most people to actually own any physically.  After Nixon, there's less than 40 years of actual history.

First there was a major run-up in price...  Followed by a crash.  Then it didn't do anything serious for almost 20 years.  Then it tripled over a decade.  In many ways the current situation looks a lot like the previous one.  Thus, the way he sees it, you're about to buy at the top and then watch it crash and languish for another 20 years.

I'm not saying that Dave is right.  Just that he has a really good point.  There's a real chance that he's wrong, considering how the gov't is screwing things up even worse this time and there doesn't seem to be another Reagan waiting to take over.  But we won't know for sure until after the fact.

I know on today's podcast Jack talked about gold & silver.  I'll go listen to it now...

Uncle Charlie all that says to me is Dave is full of shit. So gold is not worth buying now because it is at the top of the market, that is what I get out of that.

Really?  So when the Dow was raging at 14K and every indicator of a crash was blinking red, just where was that advice from him in relation to stocks.  His advice was still buy, buy, buy.  Buy stock today, buy it tomorrow, buy it all the time.  When it goes down it is on sale.  Been listening to that dude for 4 years as I say I really like him on many issues just not this one.

His song on gold was the same 4 years ago too.  You know when it was 400 an ounce.  The way you just described it on his behalf is his cop out when pressed hard.  The way he says it day to day is simple, "gold is a terrible investment".   That advice is in this man's opinion an ostrich answer that fails to look at reality. 

Oh and you most certainly could own gold even after FDR stole it from the people.  Plenty of people did just that, smart people.


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