GOLD- the only true currency?

purch

mainly on the advice of Peter Schiff, and a few other financial people who seem to actually know what's going on.

If the lunatic Schiff knows what's going on, I wonder why some of his clients lost 70% on their Investments last year ??

I also wonder why he is so keen to try and refute all those who have pointed out how wrong he has been on many things.....

"some members of the press who have never been among my greatest fans are seizing the opportunity to discredit me .The crux of the arguments are that my beliefs in "decoupling, hyperinflation, and that the dollar is going to zero" have been completely discredited by the events of 2008, and that the resulting investment losses suffered by my clients last year confirms the fatal flaws in my approach.
In addition to mischaracterizing many of my beliefs, he also is confusing short-term market fluctuations with long-term economic trends. I did not expect the huge dollar rally of 2008. But to discredit my long-term view of the dollar based on an eight month move is absurd...."

Lol_UK_2

purch wrote: »

If the lunatic Schiff knows what's going on, I wonder why some of his clients lost 70% on their Investments last year ??

Yes- I read all about that...and to his credit he explained that situation very clearly- the few who lost out were in for the short term- were not long standing investors, and got clobbered by last years massive drops in share prices.... fair enough.

If you've seen 'Peter Schiff was right' on youtube, or read his book 'Crashproof', you'll know that the 'lunatic' Schiff has been pretty good at foreseeing our current problems- and the problems to come ie: the bursting of the bond bubble...

I've yet to hear any convincing arguement against investing in gold...

Masomnia

Lol_UK wrote: »

I like the Voltaire quote you have in your sig...and it couldn't be more relevant right now! I don't think I'm a hyper gold bug...I just have a horrible feeling we are on the crest of a serious depression- which will only be made worse by the US and UK government plans to borrow (ie print) huge amounts of money on top of unprecedented national and personal debt. Buying gold is not speculative for short term gain for me...I just want something saved that is actually worth something!!

What is the intrinsic value of gold? You can't live in it, you can't eat it, you can't grow anything with it, you can't make anything out of it without specialist equipment and skills. It doesn't do anything, it doesn't provide any income...

The only reason it has any value is that people say it does.

If you had bought in the early 1980s the last time gold spiked like it is now, you'd be a long way down on your investment when inflation is taken into account. It's only going to be worth something in the event that the financial system collapses and you hold physical gold.

Lol_UK_2

Masomnia wrote: »

It's only going to be worth something in the event that the financial system collapses and you hold physical gold.

Exactly! So it all depends on who's view of the current financial crisis you believe...

If you don't think gold is a solid, tangible asset with intrinsic value then what is?
Stocks, shares, bonds, securities, paper money? All of which are symbols for real solid wealth, but are actually worthless?

Masomnia

Lol_UK wrote: »

Exactly! So it all depends on who's view of the current financial crisis you believe...

Indeed. I choose level headedness and rationality over the advice of gold rampers. The pound sterling has been going since Anglo-Saxon times, survived Norman conquest, black death, Civil War, South Sea Bubble, Napoleonic wars, economic depression in the 20s, the economic problems of the 30s, two World Wars. Is it really likely to fall now?

If you don't think gold is a solid, tangible asset with intrinsic value then what is?
Stocks, shares, bonds, securities, paper money? All of which are symbols for real solid wealth, but are actually worthless?

I'm just saying I'd rather have something backed by economic activity, which I do consider more sound. Although I do take your point that the value of anything is determined by demand for it, and confidence in it. Having said that though, shares and property are just as likely to keep up with inflation as gold, more likely, I'd argue. There's only a significant market for gold when there are economic problems; why not invest in something that will provide you with capital gain and income in both good times and bad?

Lol_UK_2

I'm finding it rather puzzling that so many people here seem to be so disparaging of Gold as a safe haven.
That this is just another blip in the economic cycle? That our total debt in the UK is approaching our total GDP isn't cause for concern?
Noone knows exactly what will happen to gold prices but in these extraordinary times, I can't see gold losing out to currencies or stocks and shares!

Lol_UK_2

Masomnia wrote: »

Indeed. I choose level headedness and rationality over the advice of gold rampers. The pound sterling has been going since Anglo-Saxon times, survived Norman conquest, black death, Civil War, South Sea Bubble, Napoleonic wars, economic depression in the 20s, the economic problems of the 30s, two World Wars. Is it really likely to fall now?

I'd say yes to that, unfortunately. The pound sterling survived because it was backed by gold!...now no more...and good old Gordon Brown sold off nearly half of our reserves in 2000 (at a ridiculously low price that cost us over 2 billion quid).
In all the scenarios you mention we did not have the debts/deficit we have now... this situation is unprecedented.

Level headedness (savings, pensions etc) has not been enough to alleviate huge
financial losses- an appalling situation for so many people...which could get a lot worse.

All I'm saying is why is gold more risky than a pension scheme. I know which I'd choose right now!

mrposhman

Lol_UK wrote: »

I'd say yes to that, unfortunately. The pound sterling survived because it was backed by gold!...now no more...and good old Gordon Brown sold off nearly half of our reserves in 2000 (at a ridiculously low price that cost us over 2 billion quid).
In all the scenarios you mention we did not have the debts/deficit we have now... this situation is unprecedented.

Level headedness (savings, pensions etc) has not been enough to alleviate huge
financial losses- an appalling situation for so many people...which could get a lot worse.

All I'm saying is why is gold more risky than a pension scheme. I know which I'd choose right now!

Its not that its risky right now, its that you need to know when to cash in your gold. Theres also the view that its never been this high before, so how far can it go?? Its all very difficult to get a specific answer, but just remember this, when confidence starts to shift back to equities you will need to be quick as the price of gold would be likely to fall rather sharpish from its current levels as more people liquidate their investments.

If you can time it right to get out of gold and into equities you could make a significant amount of money on both sides. If you get it wrong, then you could be sitting on losses on gold and you may have missed the boat in the sharp gains on equities.

Masomnia

£2bn is a drop in the ocean let's be honest. We only had the gold standard in the 19th century/early 20th century, and it may have been appropriate for then, but it isn't now, and the idea that a nation's wealth is determined by the amount of bullion it holds has been discredited quite some time ago.

I believe we came out of the Second World War with much higher debt than we do now, as a percentage of GDP, and we got through it, whilst developing the welfare state. I agree the debt is bad, but it is no reason to predict a collapse of the system.

Gold is more risky than a pension fund because 10 years ago it was worth a quarter of what it is now (in USD terms, I'm not sure about GBP), why should it continue to rise? If you buy now and it falls back to that level you could be waiting decades to see a return, with no income in between. As I say, if you bought at this point in 1980 you're sitting on a huge real terms loss.

Lol_UK_2

http://www.youtube.com/watch?v=fdDzo5fCY3w

I'd say this was required viewing for those who feel gold is a risky investment...I already posted this on another forum thread but hope this won't be construed as spamming! This is important stuff!!