Best ways to hold precious metals

bowlhead99

markj113 wrote: »

Mortgaged up to the eye balls with everything paid for on plastic living paycheck to paycheck is not my idea of personal wealth.


check the data for yourself:
http://www.usdebtclock.org/?

That's twice you've posted the link in about half an hour. Their nation has $21.5 trillion of debt. Ouch. And only those $138.2 trillion of assets to pay it off with.

I guess if I was the 'average citizen' with that $65k of attributed debt, I would be glad I had the $420k of attributed assets and would not feel 'mortgaged up to the eyeballs', even if I did generally spend a large portion of my periodic income on the costs of living my life (which is what most people spend their life's income on, and is why they engage in productive activity such as working, etc).

short_butt_sweet

markj113 wrote: »

Mortgaged up to the eye balls with everything paid for on plastic living paycheck to paycheck is not my idea of personal wealth.

these are the usual metaphors which are used to imply government debt works in the same way as household debt.

it doesn't. not even close.

public sector debt is different in that (some of the following only applies to countries which issue their own currency, and borrow in the same currency):

- there is no question of not being able to pay it, because the national currency is IOUs written by the State, which it can produce however many are needed, at will

- the interest rates on the debt can be fully controlled by the borrower

- there is therefore no risk of "debt distress" conditions occurring (when it is in doubt whether a debt can be paid, or it clearly can't; which leads to various unfortunate side-effects, as those exposed attempt to protect their own position)

- in practice, the interest rates can usually (and sensibly) be set to a very low level, so that interest on the debt is nothing (or less) is real terms

- a country never becomes too old or sick to work, so there is no need for it to plan to pay down its debts before that happens (in the way that a household would typically plan to pay off the mortgage before retirement); the public sector debt can instead sensibly grow indefinitely, provided the economy as a whole is also growing

- the level of public sector deficit is a useful tool for regulating the economy: running a larger deficit stimulates the economy (useful in a recession), a smaller deficit or a surplus restrains it (useful if a boom is getting out of hand)

that's just for starters. plenty more to discuss, if you want to. but if you're just going to pretend that countries are like households, then there's nothing to discuss.

check the data for yourself:
http://www.usdebtclock.org/?

so there are a lot of figures there. there is no conclusion that can be trivially read off about how much debt the USA should have, or about what might go wrong if it went over that level. you could try to make an argument about that, using some of that data. so far, you haven't even tried.

short_butt_sweet

bowlhead99 wrote: »

That's twice you've posted the link in about half an hour.

perhaps there should be a US debt clock link clock website, showing how often the link is posted

Computer_Beginner

I think owning gold goes in and out of "fashion".
When I was younger, not many people owned gold. Probably because interest rates were higher. Plus not many ordinary people had safes etc. Nobody used to refer to currency as "fiat" either. I think this has all become much more common since the QE and ZIRP in 2008.

Carrieanne

Having gold in one's possession is purely a financial insurance play to guard against visiting penury in a persistently high or hyperinflationary environment. Converting, say, 10% of cash savings into it is eminently sensible.

The famous book When Money Dies: The Nightmare of the Weimar Collapse by Adam Fergusson can be read or downloaded as a .pdf file for free at several internet sites.

dont_use_vistaprint

I looked at buying gold and silver bullion for my kids, as its a nice gift - bit more interesting than an ISA :-)

Is it worth it as an investment ? Whats the Pros and Cons to say Bonds, Stock, P2P

shaun_from_Africa

dont_use_vistaprint wrote: »

I looked at buying gold and silver bullion for my kids, as its a nice gift - bit more interesting than an ISA :-)

Is it worth it as an investment ? Whats the Pros and Cons to say Bonds, Stock, P2P

Don't look at it as an investment, just think of it as a gamble.
There a number of possible problems which include:.


1/ The chances are that you will only be buying small amounts and when doing this, the dealers premium (their mark up) will be significantly higher in relation to the amount spent compared to a large purchase.


2/ Whilst silver bullion is far more affordable than gold, you have to factor in the 20% VAT that you will be charged on this (gold bullion is generally VAT free).

short_butt_sweet

dont_use_vistaprint wrote: »

I looked at buying gold and silver bullion for my kids, as its a nice gift - bit more interesting than an ISA :-)

Is it worth it as an investment ? Whats the Pros and Cons to say Bonds, Stock, P2P

100% in gold would teach your kids how to invest badly.


sensible investing would be 0% or 1% in gold, and the rest in stocks, bonds, etc.


investing is going to be boring for most kids. not much you can do about that.

short_butt_sweet

Carrieanne wrote: »

Having gold in one's possession is purely a financial insurance play to guard against visiting penury in a persistently high or hyperinflationary environment. Converting, say, 10% of cash savings into it is eminently sensible.

a sensible financial plan might be: cash savings + buy your own home + invest in globally diversified shares.


you can lob in a soupcon of gold if you like, but it really doesn't make any difference.


for instance, suppose that, excluding your home, you have 90% in shares and 10% in cash. then if you want to put 10% of that cash in gold - so you now have 9% cash and 1% gold - that won't do any harm.


but it also won't do much good. your protection from sterling going down in value comes almost entirely from the 90% in shares, not from the 1% in gold.


gold won't really shift the dial unless you put a lot more in it. and that would be silly, because gold gives you much lower returns than shares.

markj113

shaun_from_Africa wrote: »

Don't look at it as an investment, just think of it as a gamble.
There a number of possible problems which include:.


1/ The chances are that you will only be buying small amounts and when doing this, the dealers premium (their mark up) will be significantly higher in relation to the amount spent compared to a large purchase.


2/ Whilst silver bullion is far more affordable than gold, you have to factor in the 20% VAT that you will be charged on this (gold bullion is generally VAT free).

You can buy a 1/2 sovereign at about 3% over spot, that is not a large premium for fractional gold.


You can also buy silver from the EU and not pay 20% VAT.