Gold

[skid]

Ive read alot of info on how inflation is on the cards[mayby not zimbabui hyperinflation],but still major.
Id be interested in hearing the facts behind your "pie in the sky" argument to help us all make an informed decision on this issue.
After all,it could have a major effect on us and our families.

[Skol]

Ive read alot of info on how inflation is on the cards[mayby not zimbabui hyperinflation],but still major.
Id be interested in hearing the facts behind your "pie in the sky" argument to help us all make an informed decision on this issue.
After all,it could have a major effect on us and our families.

The worst inflation I've experienced in my lifetime was 20% for a brief period, mortgage rates were 25% so if you are concerned about inflation pay off as much mortgage as you can or maybe fix it for a few years. Buy stocks, commodities and real estate or invest in a fund which does, buy inflation-adjusted bonds.

Own currencies that would be immune from hyperinflation if you're worried about it. There's never been hyperinflation in NZ or Australia and I may be wrong here but I believe it is because they are commodity producing countries.

There are a number of ways to protect yourself but having a lump of useless yellow metal which costs you to own and is highly illiquid is not the way to do it IMHO. When the price folds see if you can unload it, that's the acid test.

The suckers who paid US$900 for gold in 1980 would still only get half their money back if they sold it now, 30 years later and they've got no interest to show for it either, only costs for insurance and storage.

Owning gold is speculating and fraught with danger, if you have a family there are better means of insurance against inflation.

[JBmurc]

So just say the world falls into mass deflation that would mean CASH would increase it's value -debts would be far worse for those the have them (pretty much most of the world) unemployment would increase to record highs ------an most likely their would be another major World War which usually happens as the masses of pissed off populations need to be controlled by the wealthy elites of Nations(which control most governments)----or maybe instead another organised Black death to help reduce the numbers of the pissed of unemployed populations-Spanish flu etc
Many of the world super rich are all for a mass reduction of world population--Gates,buffet,turner,rockefellers,Morgans,rothschil ds,Queen etc

--I really hope for mild inflation


Well worth a read

---http://www.kitco.com/ind/GoldReport/jun032010.html

[elZorro]

We just fixed our property loan at 7.7% for three years. Apparently many others are doing roughly the same, despite the floating rate being a lot lower.

But I find Skol's latest post bemusing: take a conservative approach on inflation (but there won't be any??) pay off the house, and then.. buy more property??

You know, if most business-people waited until their house was paid off to start up their own thing, hardly anything would get done around here. And banks don't fund startups, they will lend more money against your property, which they do understand. So as long as you have some capital paid back on your house at current prices, you always have an option to either borrow more in a shortfall, or use that borrowing to start up a business. Grow rich slowly. I just think it's limiting to spend all the energy of your middle years paying off a house, while working as an employee.

However, doing your own thing is not everyone's cup of tea.

Is this the gold report you mean JB?

Focus: Gold selling fizzles out

In our last physical flow update at the start of May (Commodities
Daily 4 May 2010) we reported on large amounts of scrap and
other physical selling in the gold market. This selling trend continued
throughout May, but now seems to have run its course.

Also in May, gold ETFs added almost 150 tonnes to holdings (which increased
from 1,800 tonnes 1 May to 1,950 tonnes 1 June). The
investment market is very bullish and, without the scrap and other
gold selling in the physical market, the gold price could arguably
have been much higher.

Physical market selling is graphically presented alongside; the
Index pushed deeply into negative territory in April and May (an
index value below zero indicates net selling in the physical gold
market).

But in recent days, selling has slowed, and our index is near neutral
territory despite the gold price having edged back above
$1,200 (see graph).

Re future physical flows: Our analysis shows that, after controlling
for movements in the gold price, Q3 jewellery demand is slightly
weaker than in Q2. We therefore infer a lull in gold demand in
Q3:10. Jewellery gold demand is by far the strongest in Q4.
However, H2:09 produced, on average, an index value above zero
— which implies that the physical market had provided upward
momentum to the gold price. We expect strong gold
demand in H2:10. An index value above zero combined
with healthy investment demand could only spell
new record highs for gold.

By Walter de Wet.

[Skol]

We just fixed our property loan at 7.7% for three years. Apparently many others are doing roughly the same, despite the floating rate being a lot lower.

But I find Skol's latest post bemusing: take a conservative approach on inflation (but there won't be any??) pay off the house, and then.. buy more property??

You know, if most business-people waited until their house was paid off to start up their own thing, hardly anything would get done around here. And banks don't fund startups, they will lend more money against your property, which they do understand. So as long as you have some capital paid back on your house at current prices, you always have an option to either borrow more in a shortfall, or use that borrowing to start up a business. Grow rich slowly. I just think it's limiting to spend all the energy of your middle years paying off a house, while working as an employee.

Well you check with punters who've got massive mortgages how things are going and interest rates are low. There are record mortgagee sales in NZ and these are people who bought at the top of the market and some fixed their mortgages at 9/10%.
Paying off your mortgage is not as exciting as owning gold but you won't go broke either.
Leverage can make you heaps, it can also send you to the wall.

It's an individual thing how much risk you want to take on but lots of gold punters don't have any idea of the risk, they're amateur economists.

[elZorro]

Well you check with punters who've got massive mortgages how things are going and interest rates are low. There are record mortgagee sales in NZ and these are people who bought at the top of the market and some fixed their mortgages at 9/10%.
Paying off your mortgage is not as exciting as owning gold but you won't go broke either.
Leverage can make you heaps, it can also send you to the wall.

Skol, my post was aimed at those who have a few years of employment behind them, and are ready for a new challenge. They will have a capital gain still there, from property purchases a few years ago. You know I don't like the basic idea of just owning gold, it's as unproductive as paying off your dwelling slowly and painfully. If, during the same time, a business was started and it flourished, the house can be paid off in just a few years from profits. Yes, it's risky, best done with a business edge and a level of certainty in planning.

This thread might help some of us to come to an opinion on the direction of gold prices. On average, posters think it's going up from here. As Skid says, we do need both sides of the story.

[Skol]

So just say the world falls into mass deflation that would mean CASH would increase it's value -debts would be far worse for those the have them (pretty much most of the world) unemployment would increase to record highs ------an most likely their would be another major World War which usually happens as the masses of pissed off populations need to be controlled by the wealthy elites of Nations(which control most governments)----or maybe instead another organised Black death to help reduce the numbers of the pissed of unemployed populations-Spanish flu etc
Many of the world super rich are all for a mass reduction of world population--Gates,buffet,turner,rockefellers,Morgans,rothschil ds,Queen etc

A bad case of paranoia there JB, there's been deflation in Japan for years but nothing like the doomsday scenario you portray has occurred there.

[JBmurc]

I'm talking mass worldwide deflation not mild defaltion of one country more 1930's style

[Skol]

Ok, bad jobs report and gold up $10.00

Gold....safe haven champion of the world.

HC,
When Warren Buffett buys gold bars I'll take it seriously.

[stevo1]

HC,
When Warren Buffett buys gold bars I'll take it seriously.

Thats Golden Skol might have just have slipped Warrens mind .