Buying in to Gold

deemy2004

Also remember that rise in gold in sterlign terms is much less as it is priced in dollars.

I.e. a 30% rise in the gold price, with a 25% fall in the dollar means you only made 5% in Sterling ! Thats before costs (i.e. the spread on buying and sellign coins can be as high as 10% !) !. It would have been much better and less risky by keepign the money in sterling on deposit earning a healthy 'SAFE' 5%+ interest

cgnao

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which - through a complex series of steps - the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets.

Protect yourself.

Walletwatch

Also remember that rise in gold in sterlign terms is much less as it is priced in dollars.

I.e. a 30% rise in the gold price, with a 25% fall in the dollar means you only made 5% in Sterling ! Thats before costs (i.e. the spread on buying and sellign coins can be as high as 10% !) !. It would have been much better and less risky by keepign the money in sterling on deposit earning a healthy 'SAFE' 5%+ interest

Apologies for getting slightly pedantic , a 30% rise in gold, plus a 25% fall in the dollar would actually mean a loss of 2.5%, as you would multiply the effect of the two to get to a net gain or loss (130% * 75%)

deemy2004

even more reason why gold is BAAAAAAAAAADDDDDDDDD

deemy2004

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which - through a complex series of steps - the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets.

Protect yourself.

Your talking as though there is a problem in using paper to buy real assets ?

When real assets are effectively priced and transacted using paper.

What your saying is not goign to pass, as all that will happen IF there is an almight bang, that the globally recognised currency will change, and obviously the currency that is most likely to replace the dollar is the Euro !

Your only hope for a sustained rise in gold to say 800 and beyond is not the collapse of the financial system, but the ever expanding new middle classes of India and China consumption of gold jewellery

nitrocat

Deemy -

Also in times of such extreme uncertainty such as war !, the governments have a bad habit of confiscating privately held gold !

Why do you suppose they do that if it is supposedly not important to do so?
It does not take a genius to see that gold has a relationship with freedom and true time and effort value.

A store of time and effort is what money is supposed to represent. Yet with the paper money being flooded into the economies there is no way of protecting people’s savings (think retirement) from the hidden tax called inflation. Gold stands in the way of the banks and government, which is one reason they hate it with a vengeance.

I am one of the believers that feel the gold price is manipulated to make inflation seem low and the value of their intrinsically worthless paper money seem more valuable.
Gold is not the only thing this is done with - The government (treasury etc) has been trying to exclude house prises from inflation figures deliberately. They have to hide inflation at all costs so that they can finance wars, socialist ideals, and other bad investments.

Money:

The amount of paper money british pounds, dollars etc. that is available is unlimited (fiat based system).
Its value is only determined by its desirability.
It is created out of thin air when people, banks, governments and treasuries borrow. Mostly they just print as they will to finance government things. The base rate is the charge by the central bank (BoE) for having allowed it to happen.

If the interest rates go up it means the central bank desires less money to be created out of thin air.

http://www.galmarley.com/framesets/fs_monetary_history_faqs.htm

http://www.galmarley.com/framesets/fs_money_government_liberty.htm

Protect yourself a little - Learn the history of gold and what will eventually become of the paper money (fiat) £, once you have you may see that gold is not necessarily a bad investment.

Walletwatch

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which - through a complex series of steps - the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets.

Protect yourself.

We have come a long way since gold coins were used as something people used to exchange as money, and there is no doubt that this macro-economic evolution (if I may call it) has meant people have had to correspondingly adjust their perceptions of what constitutes value and how much. We are all now reconciled to the fact that money is the most fungible instrument, while gold is not. Why, one might actually be suspected of mischief (smuggling or something) if he were to even suggest paying for anything and everything with gold.

Doomsday sayers may say anything, I'll just say, if you're that worried abt the world coming to an end, and Governments not being able to honour their respective debts, etc. you are welcome to stock up on gold, you can buy my share of it as well ;D

deemy2004

Talking about Fiat, which one would you recommend ?
Uno
Punto
Bravo

or Marea ?



If I wanted to invest in gold, I would buy shares in a gold mining stock, that way you would get dividends as well as some capital gain due to a rising gold price.

cgnao

As Mark Twain once said, a gold mine is just a hole in the ground with a liar standing next to it.

Converting a small percentage of one's savings in gold (real gold, not paper entitlements to it) is the best insurance policy paper money can buy.

When (not if, mind you) the time comes to pay the piper, the metal of kings will be king and will preserve the wealth of the wise who understand it.

“The prudent see danger and take refuge, but the simple keep going and suffer for it” (Solomon in Proverbs 27:12, NIV)

Protect yourself.

deemy2004

But the world your painting, does not exist ?

I cannot see any rampaging mobs in the streets ?

I cannot see the Chancellor packing his bags and going off to the IMF to borrow funds to stop sterling from collapsing ?

I cannot see interest rates at 15% and inflation not far behind it ?

I cannot see anythign that suggests we are on the bring of complete financial collapse.

All I see is GROWTH !, even in the enemic Japanese economy

Nothing compares to the experiences of the 1930's and the subsquent world war, we are nowhere near such a scenerio (which I might add was an excellant time to buy assets such as property and stocks !).

Gold 1913 = $20   : 2004 = $438
Dow 1913 =   79   : 2004 = 10,600 (excluding dividend income)

I know where I should be putting my money for the long-term

P.S. WHEN the $ does bottom out and rally (and I am not saying that it has bottomed yet), what do you think will happen to the price of gold ?

For history tells is every time gold gets to around current levels i.e. $450, the price within a couple of years is below $300.