[Grrrr I'm a tiger]

roman holiday, on 22 March 2012 - 01:24 AM, said:

Gold bulls need to be distinguished from gold bugs. Both are bullish on gold, but the gold bug goes further than the bull tending towards a complete politico-economic world-view*, which no doubt most are familiar with.

As a gold bull, I'm bullish on gold because I want to be as liquid as possible in the stongest currencies. I don't see a problem with owning free-hold property, but it should primarily be thought of as a real asset as opposed to a financial one. I doubt whether gold bugs are against holding free-hold property either. I wouldn't 'leverage up' because I think there's a good chance currency will strengthen against assets/ property etc. But here the gold bug might differ, and decide it's a good bet to leverage up as the currency is expected to hyper-inflate shortly, and a few ounces of gold would then pay off the mortgage.

How much gold to own? I think it would differ for everyone. Most I think are happy to have the standard token insurance amount of 5% of their worth or so... just in case of Armageddon etc. The gold bug would want near 100% of their liquid worth in gold... but more often than not it is in silver, or gold miners. The gold bull is somewhere in between; he just views gold as an appreciating currency in a deflationary environment. He wants to be as liquid as possible and in the strongest currencies, so might look at putting anywhere up to 50% of his liquid worth in gold, and then keeping the remainder perhaps divided between the reserve currency [US dollar] and his native currency.


*
http://www.housepric...dpost&p=3288462

Agreed. Mixing 'investing' and belief systems is potentially a very toxic mix for one's pocket.

I am 8.3% in gld etf...but I shouldn't be. I erroneously missed a sell signal at the beginning of the month but will wait to see whether I should sell at the end of this month. (it's not really a 'sell' signal as such, more of a 'buy' signal for other things)


However, I'm not too worried. I still see the move in gold as being peculiar to trading that metal. The move is de-coupled from tip. If tip had gone as well, then I would have sold regardless.

[Democorruptcy]

Thing here about how gold stocks are flat since 2008 while gold has doubled.

Quote

Summary and Conclusion

From the above it appears that there is a fairly high probability that gold stocks are close to a low relative to the gold price as well as in absolute terms. The only scenario that could conceivably alter this assessment would be an unexpectedly large decline in the gold price. We don't believe that this is in the offing, as both fundamental and technical conditions continue to look constructive for gold, but one can not rule out that future conditions will turn out differently than we currently think. In that case the fundamental backdrop for the gold market could deteriorate significantly and it can not be ruled out completely that the market is correctly anticipating such a development.

However, that would amount to a triumph of hope over experience, as the world's monetary authorities continue to reliably react to any signs of economic weakness with further monetary expansion. Furthermore, the cumulative money supply expansion that has already occurred has yet to percolate fully through the economy.

One thing that gives us a bit of pause is that the above facts are well known and many others have been expressing similar opinions. There is a certain danger that this undercurrent of consensus about the medium to long term outlook will continue to weigh on the sector. On the other hand, data that show speculative exposure are what they are and one probably shouldn't over-analyze this point.

http://www.acting-man.com/?p=15598

[98% Chimp]

Democorruptcy, on 22 March 2012 - 08:06 AM, said:

A house is denominated in sterling. If a gold bull or gold bug has owned a property these last few years they are only playing at gold.

Most Gold bulls seem to believe that we are going to see large financial crises in the coming years and possibly complete currencies collapses in some cases.

In such a case owning your own home, or indeed having a mortgaged property, would be a desirable situation in comparison to renting.

[Democorruptcy]

Marcus Aurelius, on 22 March 2012 - 05:20 PM, said:

Most Gold bulls seem to believe that we are going to see large financial crises in the coming years and possibly complete currencies collapses in some cases.

In such a case owning your own home, or indeed having a mortgaged property, would be a desirable situation in comparison to renting.

So they might as well have bought a house at any price? Regardless of the number of ounces required?

[98% Chimp]

Democorruptcy, on 22 March 2012 - 05:40 PM, said:

So they might as well have bought a house at any price? Regardless of the number of ounces required?

Maybe.

Even if property is hugely overpriced, it is overpriced in terms of Sterling. If a gold bull believes that we are on the verge of a massive devaluation in sterling or rampant inflation then property will only be overpriced for a short period of time as during previous periods of hyperinflation we see that debts vanish very quickly.

I don't know if I am correctly expressing what I think. Sorry.

[roman holiday]

Democorruptcy, on 22 March 2012 - 08:06 AM, said:

A house is denominated in sterling. If a gold bull or gold bug has owned a property these last few years they are only playing at gold.

Perhaps for a gold bug. But not so for the gold bull. Remember the more sober gold bull does not see everything in economic/ monetary terms, but draws a firm line between real assets and monetary/ financial ones. A real asset is something you enjoy here and now because you only have finite time to enjoy the world. It's only the miser, of whatever ilk, that will look at absolutely everything in monetary terms [abstract ones]. They miser postpones consumption right up to the point of throwing off their mortal coil.

So on the one hand you have real assets, and on the other financial assets. A gold bull would want to minimize their exposure to the economy by reducing the profile of their financial assets [reduce risk]. If he had investment properties, he'd want to sell those and put the capital into the strongest currencies [primary among which would be gold]. He would not want to sell his own home and turn himself out on the street because this is a real asset... a home not an investment.

Quote

As house prices rose so much people may not have much spare income i.e. liquidity so just having that in gold doesn't seem enough to ramp in forums so much as a bull/bug. They have to have at least 75% of their total wealth in gold. If they don't surely they must regret it? Houses haven't done very well against gold have they?

I guess it really boils down to one's own financial position. Someone who has rented and saved, should put a large percentage of their earmarked deposit on a house into gold. Now is not the time to 'leverage up' into property because of the obvious and on-going risks hanging over the market. Better to sit on the sidelines and watch your monetary units [gold, US dollars, and even possibly pounds] appreciate against property. That said, real world circumstances would always trump the ideal economic ones. Other variables would come into play such as time, family etc... but then renting is always an option.

Somone who has managed to accrue more capital is in a different position. They would balance against the ideal of being as liquid as possible with real world circumstances of wanting to enjoy their wealth [once again contra the miser]. Personally I bought some property [in NZ] for this very reason, but I would not have bought if it meant losing all my liquidity. If there is a balance to be had between liquidity and property, the ideal and the real, I feel more comfortable in this deflationary age to have more weight on the liquidity side. This also means buying a more humble property.... and looking to live well well well within my means.

In short we need to lose, ahead of the curve, the bourgeious fetish for property.

This post has been edited by roman holiday: 22 March 2012 - 09:12 PM

[roman holiday]

Marcus Aurelius, on 22 March 2012 - 05:20 PM, said:

Most Gold bulls seem to believe that we are going to see large financial crises in the coming years and possibly complete currencies collapses in some cases.

In such a case owning your own home, or indeed having a mortgaged property, would be a desirable situation in comparison to renting.

Hmmm, there's a breed of bulls out there who don't see hyper-inflation on the horizon, though they do see financial crises... and then perhaps of the prolonged type such as Japan's lost two decades.

'Owning' a largely mortgaged property, or leveraging up into one would not be so desirable in this case where house prices deflate against the pound [even as the pound deflated/ depreciated against gold]. In reality most 'leveraging up' might not have much liquidity left over to put into gold. If hyper-inflation does not play out, and gold only appreciates slowly against the pound... they are still left with servicing a massive mortgage in a deteriorating economy.

Wouldn't it be better to put a decent proportion of that hard-earned capital to work in gold and wait on the sidelines.... looking for a more favourable ratio?

This post has been edited by roman holiday: 22 March 2012 - 09:53 PM

[roman holiday]

Democorruptcy, on 22 March 2012 - 05:40 PM, said:

So they might as well have bought a house at any price? Regardless of the number of ounces required?

Marcus Aurelius, on 22 March 2012 - 06:28 PM, said:

Maybe.

Even if property is hugely overpriced, it is overpriced in terms of Sterling. If a gold bull believes that we are on the verge of a massive devaluation in sterling or rampant inflation then property will only be overpriced for a short period of time as during previous periods of hyperinflation we see that debts vanish very quickly.

I don't know if I am correctly expressing what I think. Sorry.

'Debts vanishing quickly'? In a debt deflation, debt becomes more onerous. Those hoping for their debts to vanish run the very real risk of being bankrupted.

[roman holiday]

hotairmail, on 22 March 2012 - 08:29 AM, said:

Agreed. Mixing 'investing' and belief systems is potentially a very toxic mix for one's pocket.

I am 8.3% in gld etf...but I shouldn't be. I erroneously missed a sell signal at the beginning of the month but will wait to see whether I should sell at the end of this month. (it's not really a 'sell' signal as such, more of a 'buy' signal for other things)


However, I'm not too worried. I still see the move in gold as being peculiar to trading that metal. The move is de-coupled from tip. If tip had gone as well, then I would have sold regardless.

Silver, being more volatile, is my trade of choice. Trade silver, in order to increase dollars, in order to hedge core gold. With silver recently correcting 50%, I've been buying this double silver instrument heavily. Bottom looks in with a reverse head and shoulders:

This post has been edited by roman holiday: 22 March 2012 - 09:51 PM

[Grrrr I'm a tiger]

roman holiday, on 22 March 2012 - 09:50 PM, said:

Silver, being more volatile, is my trade of choice. Trade silver, in order to increase dollars, in order to hedge core gold. With silver recently correcting 50%, I've been buying this double silver instrument heavily. Bottom looks in with a reverse head and shoulders:

Looks like a pair of breasts to me. Is that even better?

[roman holiday]

hotairmail, on 22 March 2012 - 09:59 PM, said:

Looks like a pair of breasts to me. Is that even better?

Ha! The terminology doesn't really matter... but prefer the more moderate language.

This post has been edited by roman holiday: 22 March 2012 - 10:38 PM

[The Masked Tulip]

One for SnapCracklePop to have a wet dream over

The Last Time People Bought Gold Coins At This Rate, The Economy Was On The Verge Of Falling Off The Cliff

Read more: http://www.businessi...3#ixzz1ptWqgKK1

[Democorruptcy]

roman holiday, on 22 March 2012 - 08:44 PM, said:

It's only the miser, of whatever ilk, that will look at absolutely everything in monetary terms [abstract ones]. They miser postpones consumption right up to the point of throwing off their mortal coil.

Somone who has managed to accrue more capital is in a different position. They would balance against the ideal of being as liquid as possible with real world circumstances of wanting to enjoy their wealth [once again contra the miser]. Personally I bought some property [in NZ] for this very reason, but I would not have bought if it meant losing all my liquidity. If there is a balance to be had between liquidity and property, the ideal and the real, I feel more comfortable in this deflationary age to have more weight on the liquidity side. This also means buying a more humble property.... and looking to live well well well within my means.

If someone has the money but cannot buy something because they don't think it represents value, are they a miser?

If a person isn't materialistic and so accumulates money instead of things, are they a miser?

This post has been edited by Democorruptcy: 23 March 2012 - 03:05 PM

[Grrrr I'm a tiger]

Democorruptcy, on 23 March 2012 - 03:05 PM, said:

If someone has the money but cannot buy something because they don't think it represents value, are they a miser?

If a person isn't materialistic and so accumulates money instead of things, are they a miser?

I suspect the miser values their freedom more than they value things.

[Democorruptcy]

hotairmail, on 23 March 2012 - 03:09 PM, said:

I suspect the miser values their freedom more than they value things.

That's very true.

I read a book about 12 investors who had made piles of money and they didn't seem to have extravagant lifestyles. Most of them looked on the money as just giving them freedom.

http://guythomas.org.uk/blog/