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Everything posted by ursamajor

  1. Depends on the conditions stated in the mortgage. Most prohibit repayment within a period of time that is identical to any teaser rate. Forgive my naivity about the US but as I understood it teaser rates and subsequent re-sets were a big part of the recent problem over there? i.e. a lot of people were not taking out mortgages at a rate that would apply for the life of the mortgage. Also that in many states people are able to walk away from their mortgage without penalty (jingle mail I believe it's called?). Seems to me there are big problems on both sides of the pond. UM
  2. Credit creation can happen whether on a gold standard or not. In fact it was the Goldsmiths who started it when they decided to make more money by loaning out paper tickets representing other peoples gold! But there is a difference that becomes apparent in a time of crisis, typically bought on by the build up of too much debt and a subsequent loss of confidence. With a gold standard if you have a run on a bank then not all depositors can be repaid and some will lose their money. This happened in the 30's. Govmnt/CB's cannot stop this because, if people demand payment in gold, they may not hav
  3. Hi, any chance of creating an oil board on HPCF? We already have a gold and PM's board and, given the (likely) proximity of peak oil, there could be a lot of interest both from an investment standpoint and personal preparation. At the moment it's hard to know where to post on this subject. Thanks UM
  4. If you want very high leverage for a small amount of money you are prepared to lose then way-out-of-the-money call options may be best. IG Index deal in them I believe. UM
  5. I've gone for the etf CRUD. It is unleveraged, has low charges, and has a pretty good correlation with the oil price. The other, maybe complementary, approach is to load up on mid-cap oil explorers and developers. Small caps look very risky in the current financial climate whilst the majors have big issues with reserve growth. Examples of mid-caps traded on the UK market that I've gone for include Cairn, Dana, BG, Tullow and Soco. A basket of these takes out some of the single company risk and should give a leveraged play on rising oil. Obviously there is significant downside if oil continue
  6. Hi Barry Be very careful with LOIL. LOIL is a twice leveraged form of CRUD, which itself tracks the oil price via the futures market (which means you are currently buying at a premium to spot because oil is dancing the contango). But the issue is not just with leverage. Look at how the moves in LOIL are calculated - as twice the % of any daily moves in the oil price. This has a rather unpleasent consequence for your wealth that only emerges if you try putting some actual numbers into a spreadsheet and watching what happens over time. Basically volatility erodes your wealth relative to CRUD.
  7. I agree platinum and palladium are rare, useful and valuable. But they are commodities not money. Valuable commodities that may well act as a better store of wealth than paper, but commodities nontheless. As you point out platinum is almost too rare and suffers from being harder to work than gold. But, apart from the metals' properties, the other reason it has to be gold is simply that it always has been. And in the end all forms of money are only good if they are recognised and trusted as such. And in that respect gold has heritage. The recent moves in gold vs commodities (including pt and p
  8. The main one is that gold has all the qualities that make it perfect as money (rare with high value per unit weight, portable, uniform quality, divisible, durable, hard to fake etc). This was known thousands of years ago and still holds today. It is the reason that gold evolved as the predominant form of money instead of seashells or leaves or cows or anything else. In the absence or collapse of paper money it will likely once again become the default currency. UM
  9. It's not just other metals, gold has held up well against pretty much all commodities both soft and hard. Reinforces the view that gold is not traded primarily as a commodity but as a store of value/currency. IMO the arguments for holding gold are different from those for holding commodities.
  10. Tungsten has a similar density to gold. Almost impossible to forge coins using it (none have been recorded that I'm aware of) because of its hardness and dye-breaking properties. But I imagine a lump could be hidden within a bar quite easily. An advantage of coins? UM
  11. Even QE is a form of borrowing that has to be repaid in the future. UK govmnt can only continue to borrow money for as long as people are prepared to lend to it. It's not impossible that we will get to the stage where people no longer believe we can repay the debt through future earnings and bondholders demand higher returns or go on strike altogether. It all comes down to whether or not lenders believe we can grow our way out of the hole we are in. Ultimately it is a view on the productivity and competitiveness of UK plc. Even more so now that we are gradually losing the N Sea prop that res
  12. Apologies, daiking, I should have read your question more carefully. As squonk sais the decision is then based on which currency you think will be weaker whilst you hold the gold. 6 months ago I would have unequivocably said sterling but the market seems to have woken up to UK problems and now it's a harder call. The euro zone is not without its own difficulties, strains between different economies (exemplified by north/south european divide) and recessionary winds. There's a good chance IMO of competitive devaluation of all major currencies so why not convert both your euros and pounds to gol
  13. Hi, It surprises me just how much confusion this causes. Bottom line you are buying gold not another currency. All that matters is how much the price of gold changes in your currency of interest. I live, earn, spend and trade gold in sterling. Therefore what happens to the $ or euro or Mongolian Togrog price of gold is of no consequnce to me whatever. Changing your money into a different currency before buying the gold and repeating the process on selling will simply incur more transaction costs so please don't bother. UM
  14. I think we need to be a little bit careful here when discussing interest payments. It's something that troubled me when I first watched the otherwise excellent 'money as debt' videos on youtube. The problem I have is that it is wrong to view interest payments + capital repayment as money coming out of a pool of just capital, This is because interest payments are part of the circulation of capital - you need to consider these payments as re-entering the economy (e.g. as employee wages, shareholder profits etc) as well as being payed by debtors. The total money stock does not have to grow to ena
  15. Hi id5 I'm amazed that 1980 sovs go for £150 at Spink auction when you can pick them up for less than £120 from Chards and probably cheaper on ebay with a bit of patience. Are you sure it's not the Spink catalogue price you are quoting - now that I would believe Otherwise I think we're on the same page wrt bullion vs numismatic and I agree staying clear of the modern shiny stuff is generally a good idea. I've never really understood why collectors like them - power of marketing I guess. For me, collection is about things that have historical interest and scarcity value as well as aesthetic
  16. lc, what I actually said was 'All the gold coins mentioned are 22 carat'. The ones mentioned were britannias, sovereigns and Krugerrands. And they ARE all 22 carat! I am fully aware that some coin types are 24 carat (the chinese panda is an example as well as the maple you quote), however the US eagle is 22 carat. In response to id5 who said 'Since 1980 the South African Mint have been producing limited numbers of proof Krugerrands and the Royal Mint has nearly always produced proof Britannia’s, these are numismatic coins. There are also some years where bullion Krugers and Brits have numisma
  17. thx for posting this lc. The only things I would add, to clear up the confusion and misinformation caused by BULLION BOY; All the gold coins mentioned are 22 carat, i.e. 91.6% gold alloyed with another metal (usually silver or copper). The reason for this is that pure gold is too soft to be useful as coins. The gold content is just as valuable as the gold content in pure gold bars and should fetch a similar price per g or oz of actual gold. The choice of whether to invest in gold bars or coins is largely personal and subjective, there is nothing inherently better about the gold in either form
  18. <I don't not think I will be able to change your view so all I can say is good luck. Perhaps we can have another chat in six months time, perhaps things will be a bit clearer?> For sure. I'll even offer a round of virtual drinks if cpi turns -ve any time over the next 3 years . But the virtual drinks are on you if it goes above 9% over the same time period (gives us both about equal distance from todays number). bottoms up! um
  19. <i>Not sure how old these figures are as I can not download your post ( I have a virus ). Have you read this article? I posted it some time back?</i> Figures for June '08 show yoy M4 up 11.5%, an increase compared to the May yoy figure of 10% http://www.telegraph.co.uk/money/main.jhtm.../cnmoney111.xml Yes, I read it but I don't agree with the deflation argument. Wages are ticking along close to 4% and will, IMO, pick up with inflation expectations rising. Don't underestimate the size (>40% gdp) of the public sector and the cushion of inflationary benefit rises. <i>Gol
  20. <Look at the money supply figures M4 etc!!! Look at the drastic reduction in mew!!!> Money supply (M4) is still increasing in double digits yoy; http://www.bankofengland.co.uk/statistics/.../jun/provm4.pdf But I agree that mewing has been largely aborted for now! um
  21. What happens if we get deflation? Hi wadisgod For deflation to happen there needs to be a reduction in money. Debt default cannot do this alone - the money created on the other side of the glass must also be destroyed. This means bank default on savings and deposits. But this will not happen if HMG bails out the banks and underwrites all deposits. It could be argued that HMG will run out of money and be unable to back deposits but this has never happened in all of the history of life on fiat currency. Given the option between deposit destruction (lots of bank runs) and more borrowing (leadin
  22. Hi Muggy bear Yes, I've bought sovs from them (Chard) and found the process hassle-free. Their buy-sell spread was a bit better (tighter) than ATS bullion who are the other big dealer that I checked with at the time. good luck um
  23. Thx for coming back on this CR. Makes the case for holding i-l saving certs (as opposed to tradable i-l gilts), which DO have a stop-loss at zero inflation, even more compelling! I guess that's why there is the limit on holdings. rgds um
  24. Hi Cynicus And thank-you for the gracious acknowledgement. Quite a refreshing change to the more normal volley of abuse that many posters feel the need to dish out in response to criticism! The peak in oilfied and reserve discovery happened in the 60's. If there is one single graph worth keeping in mind wrt oil discovery and production it's this one; http://www.daveseslbiofuel.com/pix/gap.jpg However, the argument as to whether production will peak or plateau is a difficult one without knowing OPEC's hand. There's no doubt the saudis have been voluntarily restraining production for decades
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