Carney indicates BOE likely to cut interest rates + possible Quantitative Easing

HAMISH_MCTAVISH

*sigh*



Now it's true enough to say gold has spiked in GBP since Brexit as the GBP has lost around 14% vs the USD.

But you could just as easily have bought yielding DJ or even FTSE100 stocks and achieved the same result in terms of FX swing protection.

I'm with Warren Buffet on the Gold front...

“Gold gets dug out of the ground. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it....

Anyone watching from Mars would be scratching their head.”

The best way to make a small fortune is to start out with a large fortune and then 'invest' it in a non-yielding asset like Gold.

Crashy_Time

HAMISH_MCTAVISH wrote: »

*sigh*



Now it's true enough to say gold has spiked in GBP since Brexit as the GBP has lost around 14% vs the USD.

But you could just as easily have bought yielding DJ or even FTSE100 stocks and achieved the same result in terms of FX swing protection.

I'm with Warren Buffet on the Gold front...

“Gold gets dug out of the ground. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it....

Anyone watching from Mars would be scratching their head.”

The best way to make a small fortune is to start out with a large fortune and then 'invest' it in a non-yielding asset like Gold.

I kind of agree with you, and Buffet, but people from Mars would also be scratching their heads at the price mania for basic shelter, and if the masses think gold is going to make them money they will buy gold just like they bought pokey wee flats to rent out in Aberdeen.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Presumably having been vehemently against QE and other BOE liquidity interventions for the last 7 years you'll now view it as a price worth paying for Brexit?

Nope.

I see it as more of a reactionary thing. I've yet to see any basis for the decision (if it turns out to be an actual decision). At the moment, I, and many others (outside of this close knit forum) see it as a punishment thing.

Those on the remain side have been wrong so far about nearly every economic consequence of the vote. For example, house prices are up this month according to Nationwide - so theres a big dance from Nationwide about how these figures should not be relied upon etc etc as they had warned (like you) house prices would be damaged by the vote alone. They need to be right about something - so they will create issues.

The only real indicator that has suffered is sterling. However, the drop has mostly been to do with BOE comments. Reducing rates will only cause further pressure on sterling.

Even Natwest has warned against reactionary low rates.

Thrugelmir

Graham_Devon wrote: »

The only real indicator that has suffered is sterling. However, the drop has mostly been to do with BOE comments.

Not even that. Sterling has been overvalued for a long time. Market was just waiting for an event to trigger and justify a correction. Little point in ever increasing GDP if the balance of payments deficit grows ever larger. The roof still has many holes in. That words alone aren't going to fix.

pop_gun

chucknorris wrote: »

Do they, how come? Not my experience at all, equities also have a lot of significant advantages:

- Dividend income is currently comparatively much higher than bond/savings rates.
- £5k tax free dividend income.
- Subsequent dividends are taxed at only 7.5% in the 20% band, and also less in the two higher tax bands (32.5% and 37.5%).
- Easy to avoid CGT.
-ISA and SIPP compatible.

Bonds yields and saving rates are pathetic. Dividend income couldn't do worse. Of course lets not forget dividends are dependent on the company paying them in the first place.

pop_gun

HAMISH_MCTAVISH wrote: »

That and the fact people who bought last time you lot were ramping it have now lost around a third of their money in nominal terms and more like 40% when adjusted for inflation.

You only lose money when you sell something.

chucknorris

pop_gun wrote: »

Bonds yields and saving rates are pathetic. Dividend income couldn't do worse. Of course lets not forget dividends are dependent on the company paying them in the first place.

I don't have that much in cash (about 1% of my portfolio), and nothing in bonds, but dividend income is IMO very good, we earn about £42k per annum from dividend income, £30k of that is tax free, as we are HRT payers, that is a gross equivalent of about £65k (including allowing for the fact that what is actually taxed, is only taxed at 32.5%, rather than 40%), that is equivalent to a gross return of about 6.2%. If we sold all our property and equities and invested in gold, we would be giving up about £200k of gross annual income (and that excludes any capital gain). If I did though, that wouldn't be the most worrying thing, that would be that I had obviously completely lost it, and become a basket case.

That is why I am nearing the time when I will start moving away from my main investment, which is property, into shares, because dividend income has significant tax advantages, not to mention the lifestyle advantages, not one of my share etf's has interrupted my weekend yet, and called me to report a leak, or some other maintenance issue that required my attention.

EDIT: Dividend income allows a couple to earn an additional £10k of tax free income, that is similar to having over a £250k one off ISA allowance.

Sapphire

Personally, I feel deeply uneasy about Mark Carney an ex(?) Goldman Sachs employee, and a Canadian, being Governor of the Bank of England. He is far more likely to care about the interests and aims of the sinister global financial elites than about those of the British population. He will probably be gone next year (the term is 8 years, though I believe he once expressed an interest in it being 5), but that may be too late. Personally, I would have preferred someone like Mervyn King to have a hold of the reins at this time.

In my view, it was a huge mistake to keep interest rates as low as they have been in the last years. All it did was to encourage people to take out increasing loans and make them feel affluent, though they are in reality hugely vulnerable to a periodic financial crash that will inevitably occur (due more to global events and mismanagement of global finance by the world's financial elites, so keenly lining their own pockets, than anything else). Interest rates could have been kept low, but never lower than about 2 per cent. Property should never have been allowed to become an 'investment'. The people of this country outside London should have been given hope and far more means than they have of leading productive lives and having a strong work ethic and ambition, along with the ability to make something of themselves. No one should languish on benefits unless they are old or disabled. All that's happened is that the financial crash that occurred in 2008 has been kicked further down the road (as was stated it had been by many at the time), and it is possible that it is now coming up in our faces again.

Thrugelmir

Sapphire wrote: »

Personally, I would have preferred someone like Mervyn King to have a hold of the reins at this time.

Little touch regulation proved to be a total disaster. Tarnished his reputation somewhat.

Sapphire

Thrugelmir wrote: »

Little touch regulation proved to be a total disaster. Tarnished his reputation somewhat.

True – but I'm more concerned about a global financier, an ex(?) Goldman Sachs employee, presumably doing the bidding of the global financial elites, who have their own plans for bettering themselves, being the Bank of England governor, for the reasons given in my post. They've trashed the economies of several European nations. I don't think this is all going to end well…