Robert Reich Joins Economic Pessimists, Urges Americans to BUY GOLD!

[BurtWorm]

A Gift of Gold
A lower dollar may be good news for American exporters, but it's bad news for everybody else.

By Robert B. Reich
Web Exclusive: 11.24.04

http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=8907

...

Nearly all of the increase in public debt over the last four years -- some 1 trillion dollars -- has been financed by foreigners, lending us the money. But who wants to lend more and more to a drunken sailor? Foreigners are bailing out of dollars. Even the Chinese and Japanese, who have kept lending so we'll keep buying their exports, are starting to wise up.

American exporters are cheering because a lower dollar makes everything they sell abroad cheaper. But it's bad for the rest of us because as the dollar drops everything we buy from abroad -- including oil -- becomes that much more expensive. And these higher prices will ripple through the economy, threatening inflation and higher interest rates -- and, ultimately, reducing our living standards.

It's one of the oldest of economic laws: When you're living too high on hog, eventually you're gonna fall off and find yourself in pig slop. Riding highest on the hog right now is the federal government, with a budget deficit of over $400 billion this year. Surprise, surprise! It turns out that cutting taxes while waging an expensive war and doling out corporate welfare leads to red ink. If I were cynical, I'd suspect the White House had an ideological agenda to starve the government so it can't do much of anything in the future except wage war. But whatever the motivation, the deficits are driving the dollar down and subjecting America to huge economic risks. The sensible move would be to roll back the Bush tax cuts, but don't hold your breath.

...

[nadinbrzezinski]

1. lordy lodry

alrady got soem gold...

[kostya]

How are you buying it? Commodity or equity or what?

[nadinbrzezinski]

6. commodity

I called my broker true story days after the election'

Some small talk

Hey I want to sell my governemnt securities, they won't pay

I would not go that far, I mean the governemtn would not default

Hey Norquist said such two years ago, I take him at his word

Sight, "I wish not too many people are paying attetnion or this could crash this, what do you want to go into?"

Gold

Gold it is.

[donheld]

17. how about investing in diamonds

etc?

[sendero]

21. diamonds...

.... are never an investment. Their price is artificially controlled by DeBeers.

Any time you buy a diamond, you are seriously getting fleeced. That hasn't stopped me every time, because you have to give your wife a diamond :)

[Tempest]

2. Way ahead of him

Knowing how Bush destroyed the Texas economy while governor, I converted the vast majority of my investments to gold back in 2001.

Needless to say, I've almost doubled my investment in 4 short years.

I'm now looking at investing in the Euro and Yuen.

[DBoon]

3. I prefer liquid foreign assets

Several cases of French first-growth Bordeaux, specifically.

Gold is nice, but does not complement a steak very well

[PROGRESSIVE1]

4. kick

[Sparkle]

5. I'm getting really worried with all of these articles about the falling

dollar. What does a working poor person do?

[nadinbrzezinski]

7. first things first

GET OUT OF ANY DEBT YOU HAVE... you'll thank me for it once effect of this will be interet rates thruogh the roof. And that is comming faster than people realize

SAVE

Live frugally

Invest whatever you have in gold and stay OUT of gov'ment securities of ANY type.

[quiet.american]

9. Can someone point us to a link --

-- or give some useful info on exactly HOW one goes about investing in gold, Euros, etc.? Through funds?, directly?, reputable brokerages?, your bank?, Charles Schwab?

For the unschooled amongst us, this would be much appreciated.

[jmowreader]

15. There have been several threads on this lately

Let me see...

First is to just buy gold as metal. You go to a dealer and buy it. When you do please look at the "buy" versus "sell" prices. Buy will always be higher; the dealer receives a commission on each troy ounce of gold he sells.

You then have gold coins. The best ones are .9999 gold--1.000 would be pure gold and that can't happen because gold is EXTREMELY soft--they have to alloy it with silver to get it hard enough to keep its shape. Gold coins are neat because you're dealing in two markets--the metals market and the rare-coin market.

There are also gold certificates--which say you own a certain amount of gold that is on deposit somewhere. This slightly worries me; nothing is stopping these guys from buying a few ounces of gold then selling certificates on it to a hundred people. Most gold-certificate dealers are honest, but I still don't trust them.

You can buy stock in gold companies, but that isn't any different from buying anyone else's stock.

We haven't discussed jewelry yet, but very good gold jewelry is also an investment.

There are also futures and options if you're really into gambling and think you can read the gold market better than anyone else, but they make the most sense for industrial users. If your product contains half an ounce of gold, knowing that gold is going to cost you $400 in six months is better than hoping it will cost you $300.

Remember one thing: the bottom can drop out of the gold market. Please diversify; the bottom is probably not going to drop out of every market at once.

[quiet.american]

16. Thanks, my friend n/t

[girl gone mad]

18. You can invest in foreign currency through..

www.everbank.com

I think they have a minimum of 10K for most foreign CDs, though. You might be able to invest smaller amounts in foreign mutual funds.

Investing in foreign currency and gold is still risky. You should speak to a financial planner or an accountant whom you trust.

[Sparkle]

13. I've already started that. Although the saving part is hard.

I do have a 401K savings but that's not much. The only high debt I have right now is my house.

[canadianbeaver]

8. Unfortunately...you will be staying poor

When the economy really starts to fall people will slowly start to freak out....and the rich will be protecting themselves with guns and others ... so don't think of trying to take away any of their food, water or you will be looking at getting some lead in your body.

Can't help sounding so hopefull!!! All the news and discussions have brought me to this...BURNING OUT!!!

Guess thats what the Bushco. wants though eh?

[CrispyQ]

10. I hate to even think this, much less say it, but . . .

perhaps a better investment would be guns & ammo. And wine, like one poster said! What is this country coming to?

I'm so pissed at people who complain about welfare mothers & never consider welfare corporations.

[sendero]

22. Well..

.... I have been buying a gun every year for the last 5 years. This year I raised it to 2 guns :)

I'm basically preparing for a societal meltdown. I have a place to go, where I will have drinking water and heat no matter what.

I don't think it will happen, but it is no longer the long shot it once was. It really could happen here.

[Frederic Bastiat]

11. Why is gold a good investment??

I heard that the price can be easily manipulated. For example, the Bank of England can decide on any given day to sell off a chunk of its gold reserves subsequently causing the prices to tank.

I'm saving my Canadian dollars ;)

[BurtWorm]

12. Buy yen and euros

:shrug:

If a depression hits, we'll all be equal (except for the gold hoarders in the Bush family, of course).

[Occulus]

14. It's my understanding that gold always has value.

So do other precious metals.

My understanding could be waaaaaaaay off base, though. I'm NO economist.

[alexisfree]

19. buy it in bullion...

got my 1oz bars..I have double my investment!!..if something happens with the federal notes gold will be the back up..

[Bluebear]

20. At least gays can't marry and we've protected the stem cells. nt