GOLD- the only true currency?

tradetime

kingmonkey wrote: »

Can I just point out something obvious.

You buy some gold for £100.
Government decides to print money therefore inflation rises to 20% for the year.
Gold price increases to £120 the over the year.
There is no income.
You sell at £120.
Real terms profit 0% less commission.

True, but lets add one more item, an iPod (can be anything inflation sensitive you want), which cost £100, at the end of your scenario the iPod will also cost £120 due to inflation, you can buy it with the money from your gold sale, but if you just kept your £100 in cash it's no longer enough, that's the theory of hard assets for inflation hedge, profit is just an added bonus

kingmonkey

tradetime wrote: »

True, but lets add one more item, an iPod (can be anything inflation sensitive you want), which cost £100, at the end of your scenario the iPod will also cost £120 due to inflation, you can buy it with the money from your gold sale, but if you just kept your £100 in cash it's no longer enough, that's the theory of hard assets for inflation hedge, profit is just an added bonus

Technology tends to depreciate.
Cash deposits keep up with inflation over the long term.

Lol_UK_2

kingmonkey wrote: »

Can I just point out something obvious.

You buy some gold for £100.
Government decides to print money therefore inflation rises to 20% for the year.
Gold price increases to £120 the over the year.
There is no income.
You sell at £120.
Real terms profit 0% less commission.

Or: You buy some gold for £100.
Government prints money devaluing the currency and inflation (prices not wages) rise to 20% for the year.
Investors pull out of the pound and the dollar as currencies fall.
The stock market continues to fall.
Investors look for a real value investment.
Gold is scarce, a real solid asset and finite (only 2% additional stocks are mined each year).
Gold is in a bull market (last time that happened in 1980 gold went from $42 an ounce to $877 an ounce).
Who knows where it could go?

Lol_UK_2

kingmonkey wrote: »

Technology tends to depreciate.
Cash deposits keep up with inflation over the long term.

What? Cash deposits ALWAYS devalue over time (unless you add interest).
Everything costs more than it did 10 years ago! Otherwise the £2000 a year I earned when I went to work back in the 70's would be a reasonable wage right now!

Stavros_3

PMSL at some of the posts here. Go put all your dosh into gold. Lets see what your gains are in 12 -24 months time

Lol_UK_2

Stavros wrote: »

PMSL at some of the posts here. Go put all your dosh into gold. Lets see what your gains are in 12 -24 months time

Well... I'm not suggesting you do that- just have some gold to protect some savings from inflation. How much more of a risk can it be than putting your money in a UK bank?:rotfl:

Yes- I'll let you know when the price of gold doubles in the next year!

purch

Jim Rogers is talking on Channel 4 news in a bit

Is it just me........or does everyone just want to punch him in his smug mug everytime he appears to TV to talk his usual gibberish ????

P.S. I wouldn't advocate punching 'the Schiffter', cos he's much younger and bigger than Rogers !!!!!!

purch

Everything costs more than it did 10 years ago! Otherwise the £2000 a year I earned when I went to work back in the 70's would be a reasonable wage right now!

Luckily your wages have kept pace with Inflation better than the price of Gold has !!!!

sabretoothtigger

Share dividends keep up with inflation eventually?


http://www.moneyweek.com/investments/stock-markets/the-most-important-driver-of-stock-market-returns-14646.aspx

Lol_UK_2

purch wrote: »

Luckily your wages have kept pace with Inflation better than the price of Gold has !!!!

Agreed...but that was then and this now!
I think we are entering an unprecedented period of financial unrest, hence my original posting- a rhetorical question really as I have no doubts about it!