Gold SIPP

Aretnap

sargan said:
 Physical gold is classed as a Tier 1 Asset,  a “zero-risk” asset...

This is complete and utter drivel and you should not take any financial advice whatsoever from anyone who tells you something so self-evidently absurd.

No need to say anything else really.

leosayer

sargan said:

Separately I have been investing slowly into Gold Bullion  (1oz coins to avoid CGT)  This has way outperformed both pension funds and high-interest savings account, Gold seems on a very good upwards run.

I bought a 1oz Gold 'Queen's Beast' coin a few years ago. The value has increased by over 50% since then so I can understand the temptation to pile in. However investing purely based on past performance is a fool's game. 

You don't have to do much research to discover that equities generally outperform gold over most time periods and with much lower volatility. 

What is your pension currently invested in? Do you hold Vodafone shares? 

DonSmith

I signed up to this forum so I could give a more supportive opinion to what the OP was suggesting. All of the responses here are fair to say of not in agreement, which I totally understand, and history would suggest the sentiments would be mostly correct.

That is, the time we are about to enter from a global economic sense is going to become very volatile. More volatile than any other time in history.

There is a very real possibility that we are looking at the debasement of western fiat currencies, the end of game of paper money. When it all boils down, gold is money and fiat currency is just credit. All fiat currency is not backed against anything like it was in the past, it is an IOU issued by a bank - this is printed on the notes themselves, just have a look for yourselves. 

The parking of gold into a SIPP is not so much of creating wealth but the protection of wealth, and it may be the one thing which saves your future. I know this all sounds very dramatic.

The sensible advise has been to keep 10% of your investments in Gold Bullion for the reason to smooth any troubled economic times, but with what we are facing 10% will simply not be enough.

So why am I so sure of a global crisis on the horizon? One which will be so much larger than that of 2008.

Simply because the the US monetary system is in a debt trap which they can almost never escape from. The US government debt currently sits at $35 trillion, with $1 trillion of debt being printed every 100 days! The interest payable on this debt now exceeds the US annual military budget and the point where they will no longer be able to service this debt is closing in. Their GDP stands at 130 which is a large number when you are in desperate need of stimulating an economy to bring down a deficit. In comparison the US 2008 debt when we hit the last major economic crisis was $3 trillion.

The UK government & EU governments are in similar debt positions. If the US dollar debases it will take all other western fiat currencies with it.

The SAP500 has been artificially inflated by the US government spending (printing) over the last 5 or 6 years, which has become unsustainable. The market bubbles will burst when the economic reality hits and it is going to hit hard.

Governments around the world have realised this, which is why they have been selling off their dollar positions and sending these dollars back. The time of the US dollar being the world currency looks to be at an end.

The BRICS are very close to agreeing on a shared settlement currency and with well over a hundred other countries, maybe as much as 150, showing an eagerness to join and to leave the US dollar as THE trading currency. The BRICS currency is expected to be backed by 40% gold from the founder nations. You just need to see how much gold has been repatriated from the NY Fed & the BOE this year to nations all over the world, and with the level of purchasing of gold from eastern states you can understand that the reality is gold has moved from being viewed as a commodity to what it actually is, the real money. Gold is leaving physically from the NY & London exchanges in quantities we have never seen before.

All of the central banks around the world have been buying gold at a faster rate than any other time in history. You need to ask yourself why that its - why are they so interested in gold. Why are they so invested in replacing fiat currency with CDBC's. CDBC's are coming, all central banks have them tested and in place. CDBC's have no need for fiat currencies. It is arguable the only thing stopping their implementation is the existence of fiat currency.

The Chinese Communist Party have been actively encouraging their citizens to save into gold. It is though China could have as much as 45,000 tonnes of gold between the CCP and their citizens.

History shows who has the gold controls the game, and the US took advantage of this when the Bretten Woods System was agreed in 1944 to establish the dollar as the world currency. The batten is close to being handed over.

Since the US left the gold standard in 71' it is fairly obvious the price of Gold (and Silver) has been artificially controlled at todays lower levels to the advantage of the West. It is predicted if the US returned to a gold standard for the dollar, and when you consider the amount of printing of dollar (which should really be called dollar debasement) since it left a gold standard in 71', the price of an ounce of gold would be revalued from todays price of $2,500, to a price of approximately $27,000.

The printing of money creates inflation. Inflation is currency debasement - theft - the weakening of consumer purchasing power for goods and services. Gold's value stays the same (as it is finite, it cannot be created out of thin air). When the price of gold increases it is not to do with it becoming more valuable but the debasement of the dollar itself against it. The dollar has been devalued by 98.5% since 1971'. Devaluation & derivatization of the dollar cannot be sustained for posterity, there will be an end and it would seem we are almost there.

The reality is the US does not have many options to beat the debt trap, none of which can save it's position as the number one economy/currency of the world. There is one solution however which I will end my ramblings on, while rather fanciful, but could be the easiest way for the Fed to solve their debt problem. This is to revalue the treasury's gold to match that of their debt. By doing this the $35 trillion debt would disappear over-night giving the US a healthy balance sheet. The only problem to this it would mean an ounce of gold would be revalued to an estimated $120,000, and we don't know how much gold is in the US treasury as it hasn't been audited in decades so that figure could be hyperbole. But sentiment remains.

If it was anywhere close to being the case it would still mean that those who invested in gold would be extremely wealthy (in relation to fiat currency) and the governments holding the most very powerful.

I just want to finish off by saying I believe the OP has merit and everyone should do their own research on the subject and come to their own conclusions. While most believe investing in gold is a risk I say holding investments based in fiat currency will prove to be the real risk. We are living in different times.

Good luck all.

booneruk

DonSmith said:

<SNIP>

I've been reading (and rolling my eyes at) the same type of messaging for a decade+ now. It still hasn't happened.

Inflation isn't theft, a low amount of inflation contributes towards a healthy economy. 

I'll leave others to comment in more detail on the rest of your chunky missive. I must admit it was a tad too long for me to bother with completely.

Cus

I think you could be helpful on the bitcoin thread 😁

LHW99

Umm - didn't Ruffer or one of the other "wealth protection" funds add gold sometime? Don't know how that went, but at least you are hoping to get some sort of management expertise that way. (not my cup of tea, but some like these funds)

booneruk

I've read some more of it now. Oh my.

I own some physical gold ETC myself, but it's purely a hedge and represents a slither of my total portfolio (<1%). At some point equity will drop and gold will rally, and it's that point I start swapping gold for equity. If it doesn't happen, oh well, I guess my equity investments have done pretty alright.

I don't know what "investments based in fiat currency" are - that sounds as if it's cash or cash-like savings. Equity has beaten inflation in the long term. 

leosayer

I own a gold coin.

Hopefully this will protect me against the ongoing theft, currency debasement and bursting bubbles.

vacheron

The only time I look at the gold price is if we have a clearout of any old jewellery we have lying about.

I do have quite a heavy 18ct curb bracelet that I got for my 21st Birthday many moons ago, about 1.5oz IIRC.

I would never sell it as it has sentimental value, but good to know that I can use it as an amulet of protection come the apocalypse.     

Albermarle

LHW99 said:

Umm - didn't Ruffer or one of the other "wealth protection" funds add gold sometime? Don't know how that went, but at least you are hoping to get some sort of management expertise that way. (not my cup of tea, but some like these funds)

There are suggested portfolios that have long been around ( Golden Butterfly for example) that have 20/25% gold as part of a medium risk portfolio. 
I do not know how well they compare to a more typical 60:40, and of course they are not comparable to what the OP was talking about.