Buying in to Gold

amosworks

I must admit I am at the lower threshold of understanding what you guys are debating, and a most fascinating, educational and free flowing debate it certainly is!!

I am just getting involved in investing but I certainly think it would be nice to actually own some gold, just in case the worst happens. Despite all the arguments, when it comes down to it - unless you can hold something in your hand - you might as well not own it. Everything apart from precious metals and stones doesn't actually exist or have any physical value. As already mentioned by cgnao, gold seems the most versatile and adaptable of these precious metals. The only thing that keeps them precious are their rarity. Any government with a printing press can make as much "wealth" as they want.

I suppose I better get saving £7k for a gold golf ball now

amosworks

Sorry for the double post but this thread reminded me of something I once read and I just managed to dig it out. It was in a random selection of stuff from The Heretical Press that I would like to put forward as it seems quite relevant to what's being discussed. Unfortunately I can't link to it as it's paper based, so I typed it up for y'all:

The_Heretical_Press wrote:

King Billy's Crime: A $hort HistorY of £anking [sic]

In the old days there was no paper money. The accepted token of exchange was precious metal minted in to coins by the Church and the Crown. Because there was only a limited amount of gold and silver available, the economic life of the nation had a certain regularity.

An even greater restriction existed throughout Christendom. This was a prohibition against usury, or charging interest. The Church held it to be a grave sin and the code was upheld by the civil powers. There were harsh penalties for those who broke the law.

The regulation of usury was to prevent the separation of money from reality. Money is not a good, it is a measure. It is fraud to pretend otherwise, and constitutes theft. Usury is making money from lending money; it is making money from nothing. This is exactly what is happening today on a colossal scale.

Several important things arose from the prohibition of usury in medieval Christendom. Firstly Jews, who had taken to wandering around Europe in the Middle Ages, began to specialize [sic] in money-lending and other practices which were forbidden to Christians. Exploited Christians, both peasants and aristocracy, found themselves being bled dry by usurers [sic], which is why there were sporadic uprisings, imprisonments and expulsions of Jews throughout Europe. It is one of the reasons why Kind Edward I expelled them from England in 1920. Oliver Cromwell allowed them back when the moral authority of the Church was undermined and the Kind was beheaded in 1694.

Secondly, gold coins, jewels and other valuables were deposited with people who held strongboxes. This was usually with goldsmiths and money-lenders who, more often than not, were one and the same. These loan-sharks and scriveners realized [sic] that, without much change of being found out, they could charge people for looking after their deposits and then use those deposits - which did not belong to them - to make loans to other people at interest. They soon became rich and powerful.

Gold coins are heavy and awkward to carry around so the custom arose whereby the money-lenders would issue credit notes to depositors who began to trade these notes between themselves in commercial transactions. Paper money had come in to existence.

A new form of usury developed as the swindling money-lenders realized [sic] the immoral benefits that could be obtained from such a situation. It became apparent to these thieves that they could go one step further than dishonestly using other people's money for financial advantage at no cost to themselves. They could invent money from absolutely nothing. They could issue credit notes with nothing to back them up and put them in to circulation as interest-bearing debts. No-one would be any the wiser. They calculated that they could safely issue notes for up to 10 times more than the gold deposits they held, because the depositors would never ask for their money back all at the same time.

The principle of modern banking was thus established: invent money from nothing, put it into circulation as "running cash notes" that have to be paid back with real wealth that is produced from our labour, sit back and become unbelievably wealthy and powerful men: hidden rulers of nations.

In England this deceitful system was officially sanctioned in 1694. The usurper of the throne, William of Orange, had overthrown the legitimate King James II with the financial backing and plotting of powerful Jewish financiers in Amsterdam. In return he gave the sovereignty of England to a group of financiers by the means of a Charter allowing them to call themselves the Bank of England. The Charter made no mention of issuing the nation's money, but within minutes of signing the new Bank officials were discussing the form of issuing their "running cash notes." [sic] The same system was adopted in every country by a process of Masonic revolution and manipulation. Nowadays banking has become extremely sophisticated but the hidden and usurious principles behind it remain the same. The British Treasury, in conjunction with the Bank of England's advisers to the Government, determine how much paper money and coin will be issued each year. This has to accord with the wealth of the nation for that year. But because banknotes [sic] and coins only account for a tiny percentage of financial transactions, it makes no difference to the bankers at all. Most financial transactions are carried out with abstract figures on a computer screen that have no relationship to real wealth. Everything has to be paid for at interest though - even when it doesn't exist!

The Government still has to pay interest on old and new loans from the Bank. Only a few years ago it was announced that the interest debt on a loan taken during the Napoleonic War has just been paid off! This is where much of out tax money goes.

Who benefits from such a scheme? The politicians or the bankers? To ask the question is to answer it. The Bank of England is the real, but hidden, government of the county. The Government and the politicians are merely puppets controlled by the Bank - or, more accurately, the international banking families. None of our cowardly politicians dare stand up to these hidden and unelected rulers of the world, so powerful have they become. Two American presidents, possibly three, were assassinated for attempting to do so. It is far easier for them to submit to the system and enjoy a rich life than expose the real tyrants: tyrants who cause high taxes, unemployment, war, famine and misery for the rest of us. But these despots of the New World Order forget that Truth is more powerful that they could ever become. And Truth brings Justice!

Published by The Heretical Press, PO Box 1004, Hull, Yorkshire HU3 2YT. November 2004. https://www.heretical.com

Food for thought :cool:

Chrismaths

The usurper of the throne, William of Orange, had overthrown the legitimate King James II with the financial backing and plotting of powerful Jewish financiers in Amsterdam.

Odd. I was always under the impression that William of Orange was invited to Engand to get rid of the Catholic, authoritarian, divine-right-believing James II by the protestant parliament, who fresh from the Civil war and Cromwell's protectorate, didn't want another Charles I. Had no idea that it was all part of the global capitalist Jewish conspiracy!

None of our cowardly politicians dare stand up to these hidden and unelected rulers of the world, so powerful have they become. Two American presidents, possibly three, were assassinated for attempting to do so.

Hmm. I suppose there's no point in 'fact' or 'evidence' getting in the way of a ripping good yarn.

The dangers of 'fiat' money, ie that which gains its only value by diktak of the state, are well publicised, and well covered on every gold bug site on the net. Type 'fiat' 'money' 'gold' into google, and you'll get about 2 million results. One that I have been following for the past 4 years is the daily reckoning newsletter. good example here
What we have seen recently has been a combination of lack of supply on one side (a hangover from underinvestment when Gordon Brown et alii gold sales depressed the price of gold to $200), and new investment demand on the other, from the newly wealthy Chinese, and Gold ETFs. Supply and demand are the only factors in deciding the price of a commodity.

Chrismaths

That's it, use the force luke.

**Edit - that was in reply to someone who has since deleted their post. very rude IMO.

They were making big predictions with no back up.

Deemy

cgnao wrote:

Six months later, gold is $640. And it's just the beginning...

Okay.... You win !

There is no way I could have ever have imagined in my wildest dreams or nightmares that a year on gold would be up at $640 !!!!

Though I did ride the palladium bull


STILL.. This is serious and mind boggling , cos I ain't a gold bull... but I can see its gone barmy !!! The market is barmy ! I can see that there is some sort of panic buying going on ! A gold rush to safety away from the dollar, which suggests ...... Well.... TROUBLE AHEAD !!!

Suggests that the unsustainable trade and budget imbalances around the world are about to get the shock treatment in readjustment !

Not a time to be holding any debt !

Still trying to apply some rationality to the charts, which suggests that gold is going to correct and given the move up it is likely to be substantial, I will stick my neck out and say take gold to below $500 !!!

Okay, fine give it say another 6 months and tell me I am wrong again , But no way can I imagine buying gold at bloody $640 !!! That is nutcase pricing even if we are in for major financial trouble !!!!

As I posted earlier - I have a distinct feeling that since everything has gone up ! It is highly likely the next move initially will be for EVERYTHING to FALL - Dollar, Gold, Crude, Stocks, Bonds, and above all HOUSING ! As the credit crunch bites !

amosworks

I hope so or I'll be screwed if I jump on the housing ladder any time soon

cloud_dog

Obviously there is lots of political uncertainty (Iran) and fiat money concern regarding the US$ (they may have to inflate their way out of trouble) and gold is the best place to be.

I would agree with Deemy that there is likely to be a correction in the short term but I think gold (and commodities - base / precious metals) will continue to be the place to be in the longer run.

Additionally the Yen carry trade is starting to unwind (previous cheap borrowing from Japan) with the effects of this being seen in Iceland:

http://www.sundayherald.com/54997

Lets not get this out of context, Iceland is not going to rock the world but it is an indication of what has happened elsewhere in the world, i.e. cheap money, over extending, etc, etc, and the effect of it comming home to roost.

(have a nice day) cloud_dog

Chrismaths

Good summary. Gold definitely has its place in a diversified portfolio, but I would be hesitant to buy at these levels. There are several headwinds against the price of gold currently, and I've taken some profits recently. I'll probably be a buyer on weakness though.

free4440273

historically speaking, there has always been definitely a discrepancy between the stock market and the price of gold: the fact that both are rising in tandem presently is yet another conundrum in this economic cycle. personally, i think gold will rise all the way to maybe the $750 mark within three months. this should mean a correction in the stock market... :eek:

moneytroll

Not just gold, but commodities in general have had a lower correlation with the rest of the stockmarket historically (even less then bonds/gilts - which are at their worst at the moment). That's where the phrase "past performance is no guide to future" etc comes in handy ;-)