Dangers of having lump of cash in bank?

bendix

purch wrote: »

Yes, as will always be the case if you choose and aggressive investment strategy and are wrong.

Gold is not a perfect hedge against Inflation, despite what some try to preach.

If we do have Hyper-Inflation then buying £50k of Gold now will probably not save you 100% from the effects, and if we don't and only experience normal levels of Inflation, even if you have only hedged 10% for your £50K into Gold you will struggle to break even.

CNBC made the point last night that in today's money terms, gold peaked at over $2800 per ounce during the early 1980s. For those who bought it at or near those rates 25 years ago, gold has not proven a good inflation.

Caveat - I think gold will rise to $1250 over the next year.

DiggerUK

Scooby_Man,
If you start from a position of global economic armageddon, you will not get an answer to your question.
If you then start talking about buying gold you will just end up as a goldbug, not an ambition I could recommend.
Spending your life 31 grammes short of an ounce is a sad way to go on.

Gold is a no risk asset, no question about it. There is no risk associated with gold as with other assets.
It can't go bankrupt, can't default, can't become worthless. Nothing else has the qualities of gold. It is an asset, commodity and money.
It comes into it's own in periods such as we are in now, but don't go looking for a Mad Max ending to life as we know it. The world is changing, not ending.

Other point to be made is that we all have lives to live, burying gold in the back yard is all fine 'n dandy if there is some purpose to being here.

gozomark

Scooby_Man wrote: »

Wasn't QE just printing money rather than purchasing assets? And this money needs to be recouped through raising money (or was it technically the BoE bought Gov Gilds or something?)

You are mixing up several concepts. The BoE version of QE was purchasing gilts and corporate bonds (ie assets) with created money. It didn't need to be recouped as the money was created out of nothing - effectively it was printed, but wasn't actually printed as it was electronic settlement.

withnell

Scooby_Man wrote: »

Hmmm...Mr Brown sold UK gold - 40% of it I believe at 200 US and now its what 1000?

He also made a big announcement that he was going to do it, causing the gold price to plummet

purch

can't become worthless

Why not ??

Hungerdunger

purch wrote: »

There are more things to alarm us than to harm us, and we suffer more often in apprehension than reality." ~ Seneca, 4 B.C. - 65 A.D

Off-topic I know, but can I just say I like your Seneca quote. Perhaps the Daily Express should print it each day at the top of Page 1 - a bit like when Nick Ross used to say at the end of every Crimewatch: "Don't have nightmares".

sabretoothtigger

This is all quite confusing I find, but understanding what drives the price of gold helps explain alot of price movements including shares, etc

Placing 50k in gold would be extreme compared to taking out the index linked bonds, the value of which can only go up which is what you want it sounds like rather then gambling on commodity demand. Commoditys pay no interest and have no guarantee.

You could always do both and or invest in a CRB index fund which is more balanced across all commoditys (still no guarantee it'll go up in value but many believe in rising demand)






This is an old chart but its the clearest of what I have saved. So the price of gold is the highest its ever been at face value anyway ($1000 dollars but similarly also in £ afaik).
This chart just tries to show that in actual value (purchasing power, how many cans of beans can i get or whatever) its still below the peak


It declined from 1981 to 2001.
This would not be true of index linked bonds. If you do gamble on the spike vs the decline, dont put it all on red

Scooby_Man

If putting money into Government bonds is supposed to be 100% security (regardless of amount), what happens if this country/Government becomes bankrupt? Surely the Government uses the public's investments to fund/buy things, so if the totally ran out of money how can it be 100% secure?

sabretoothtigger

Nothing is totally secure but you should emigrate if you think their linked bonds arent worth buying for that reason

Scooby_Man

sabretoothtigger wrote: »

Nothing is totally secure but you should emigrate if you think their linked bonds arent worth buying for that reason

I'm not sure whether that in itself is enough reason to emigrate. I think it is misleading when terms such as "100% Secure" are spouted.

This country was very nearly bankrupt in the 70s and we are at our worst debt levels since then. Even being mildly prudent would entail considering this scenario.