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redprince

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Why is gold recession proof? Its only a useless metal, how come it's seen as more stable than useless paper? You can't eat gold, you can't build a house out of it (unless your a banker).

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Its only a useless metal, how come it's seen as more stable than useless paper?

The answer is counter party risk. The government cannot 'quantitatively ease' or print more gold.

I prefer not to comment on gold here. Everyone needs to look at the UK economy/government/currency and makeup their own mind.

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Why is gold recession proof? Its only a useless metal, how come it's seen as more stable than useless paper? You can't eat gold, you can't build a house out of it (unless your a banker).

If a ship sinks to the bottom of the sea, with 3 million USD of paper money, or 50 kilos of gold, which one would be worth visiting the ship wreck to retrieve? One reason is that it is durable and has been around as a medium of exchange for 3000 years...

Look at the lifespan of any fait currency, or paper currency if you like. The Assignats in France between 1790-1792 lost all of their value due to hyperinflation...its gone long ago.

How about the old Contienental USD during the American Revolution of 1775? It is worthless and no more.

How about the Weimar mark in Germany in the 1920's...

History is replete with examples of a paper currency being devalued and destroyed by the government policy.

Money is an indirect medium of exchange and evolved from the inflexibility of the old barter system. Gold is still seen and used as a currency. Many people use gold as a currency, just as we use sterling to buy good in shops.

You might ask but gold is not accepted in shops here, or by the bank to buy a house? This is true. Like money it is an indirect medium of exchange.

Similarly your labour and work is not accepted as a medium of exchange, that is why your employer whether that is yourself or a company will exchange that labour, work and production into Pounds...which you will then convert into food, fuel, housing, leisure and a whole host of other activities...

In the same way of thinking, gold is very liquid and can easily be converted into sterling, gold is the same as labour if you like in this example. Labour is not money, but it has value, gold is not sterling, but it has value relative to sterling, and sterling is the indirect medium of exchange in the UK.

It is said that in a deflationary environment it is best to be cash as cash increases in value or assets fall,the same thing actually. However, if gold has been used as money for thousands of years, then it stands to sense that gold is a cash equivalent. Gold has come into its true role as a medium of exchange in this deflationary environment. It has held its value.

Gold today will buy you more Canadian Dollars that 1 years ago, more Sterling than 1 year ago, much more property than sterling will, much more oil than 1 year ago, much more wheat than 1 year ago, much more corn that a year ago, much more milk, much more insurance, many more Euros, many more AUD, many more NZD, many more Icelandic kroner...etc etc...

At the peak of the boom in Northern Ireland house prices would you have rather owned gold or sterling? What price would a house be today in gold terms and in sterling terms. House prices have fallen much much more in terms of gold that sterling...

So far from being a useless metal, it has been extremely valuable in maintaining intrinsic wealth and purchasing power. The 50% plus falls in houses prices everyone is looking for has been more than achieved if using gold as a medium of exchange.

You might not be able to build a house with gold, but then again, you can't build a house with food, yet is food useful? You can certainly buy a house with gold, and more house than sterling will buy.

Why does it maintain value?

Well, the average yearly new supply of gold is about 2400 tonnes. It is the very scarcity of gold that gives it value. It comes back to supply and demand, and the relatives between these two fundamental pricing mechanisms.

On the other hand, paper money can be created in limitless amounts, The Bank of England can issue £150 billion of Gilts in the click of a mouse. Paper money has been losing its value against real assets for decades and centuries, and will continue until one day it becomes worthless. The supply of gold can not created by the click of a mouse. It is limited. Paper money is not. So the more money chasing less of any product will lose value relative to that product.

In a nutshell this is why gold is useful. Of course there is times when it is better to own gold than other times. However, if you look at these cycles and if you look over the longrun, it can be seen that gold has always maintained its value. The price of oil in gold terms today is pretty constant with 30 years ago...Can the same be said for sterling? Or any currency for that matter?

Money in itself is a commodity and the cost dictated according to the supply of it and the demand for it by society. The cost of money, ie, the interest rate should be determined like this. Central bankers however have totally distorted what the true cost of money should be today by trying to gauge the rate of interest on money, which is deeply flawed.

Take a look at this chartDollar_PP.jpg

This is a chart of the USD purchasing power over 200 years. I marked the black line as this was when the Federal Reserve was created in 1913. The USD has lost 95% of its value. Under the gold standard, in the period between 1800 to 1900 the purchasing power of the USD fluctated but always came back to the mean. This is stable prices. Now the story is totally different...It is clear that trying to centrally plan the cost of money has been a complete failure. No one has that wisdom to know the collective and aggregate time preferences of every individual in society for money. How can 14 government buereuacrats know this for everyone? They cannot. No one can.

The Federal reserve has failed twice before and the third one created in 1913 will also fail, probably due to some uprising or revolution as the USD will lose perhaps all its value in the coming decades. These things take time.

History shows that, and right now today shows that it is wise in periods like this to own some gold.

post-13039-1248517825_thumb.jpg

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Funny a friend was talking about buying gold just the other day and suggested I should buy. He was getting very excited about the whole thing. Reminded me of someone buying property in 2006.

I have to confess I know very little about trading commodities especially gold. However after chatting to my friend. I started thinking about how excited he was getting and it made me curious to find out why.

So I had a look at some historic gold charts. Take a look at the 5 year chart below. To me it shows a dramatic rise in gold prices from mid 2007 £325 to a peak of £700 GBP/oz early 2009 then easing to £579 at present.

http://goldprice.org/charts/history/gold_5_year_o_gbp.png

Is this not just a bubble created by investors putting their money into something they see as being safe?

Did this bubble not burst at the beginning of 2009 £700 to £579 an 18% reduction in 6 months?

The 10 year chart shows gold starting to rapidly increase in mid 2005. Why?, what changed in mid 2005?

http://goldprice.org/charts/history/gold_10_year_o_gbp.png

To me the gold story seems to be a bubble which started in mid 2005. Maybe I'm looking at it all wrong but to me when the man in the street is telling you it's a good idea, thats when you sell.

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Thanks for the post VT - although you have tried to answer my question my main point was more to do with why gold, you rightly pointed out it was due to its abundance but what about bismuth and tellurium? They are considerly scarcer than gold, silver, palladium, platinum, etc, etc, yet worth a fraction of the price. I suppose you could argue gold's historical importance but really, its only a useless metal. Is there a possibility gold could lose all it's value one day?

My pedantic arguement aside - where can I buy some gold? lol

30mins of scanning the internet I've seen prices for krugerrands range from £260 to £670. What is the atual price of a single full krugerrand? Although a poor student I would love to buy just one with whatever money I make over the summer!

Edited by Doctor Dick

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Thanks for the post VT - although you have tried to answer my question my main point was more to do with why gold, you rightly pointed out it was due to its abundance but what about bismuth and tellurium? They are considerly scarcer than gold, silver, palladium, platinum, etc, etc, yet worth a fraction of the price. I suppose you could argue gold's historical importance but really, its only a useless metal. Is there a possibility gold could lose all it's value one day?

My pedantic arguement aside - where can I buy some gold? lol

30mins of scanning the internet I've seen prices for kruugerands range from £260 to £670. What is the atual price of a single full kruggerand? Although a poor student I would love to buy just one with whatever money I make over the summer!

As an observer who knows little about these things, I am sceptical of gold maintaining it's traditional role as a store of value. The reason for this (and I also think it could be the reason for some market volatility over the past few years) I think is the internet, and the consequent accessibility of markets to the mases. This could mean that the methods used to hedge currency are much more diverse and spread across a much wider range of investments or commodities than they once were, which would dilute gold's value.

Also, huge amounts of gold are held be governments- If these governments decide to raise some cash by dumping their reserves onto the world markets.....anyway, just my thoughts. As BB says, best to decide these things after as much research as possible.

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History shows that, and right now today shows that it is wise in periods like this to own some gold.

It may well be wise to own some right now, but buying it is a different matter, all I have is valueless fiat currency. :(

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Thanks. Good article.

Hello all,

Apologies if i spoilt anyone`s w/end with the article - that was not the purpose of posting the link.My reasons for posting it are:

1.To show the importance of IMMEDIATE govt cutbacks to avoid such a scenario (which i hope and pray are avoidable with right actions now)

2.To get a decent debate going on how to preserve your purchasing power or at least hedge for same in event of there being any truth in the sugggested scenario playing out.

Now i will state what i have done to counter such a risk and i will give my reasons why.Please note this is NOT a suggestion that anyone esp those not particularly well informed should wish to copy.Why?You must do what you feel is right for your own circumstances and understand WHY you are doing it.

I welcome comments on what i have to say below - good , bad or otherwise.

I have invested in silver through an exchange traded fund (phag) because i feel silver is currently significantly undervalued and the fund i have picked is using "physically allocated" silver for those invested in it.Not as safe as buying physical but no vat or delivery charges and only 0.5% annual fee plus dealing costs (minimal when you trade online).Some of these etf`s are imho more risky than others if they ain`t backed by an actual physical asset so i picked phag which trades in USD and is physically backed.

Why do i like silver?

1.Historically speaking its undevalued versus gold - shld be/was ratio of 15:1 and currently about 70:1 (need to check that as its changing all the time)

2.Its used industrially in tiny amounts per application eg catalytic converters,solar panels,best conductor of electricity,fibre optic cables so producers can and will support considerably higher prices

3.I am led to believe that stocks are running very low - much less available above ground silver than gold!!!!

4.Massive investor demand which in 2008 ate up 25% of world production via etf`s alone.These etf`s have only been around for less than 1 years and silver as an investment is largely ignored by Joe Bloggs.

5.If people twig onto the undervalued aspect of silver today there is a lot of hard cash on the sidelines held by hedge funds and pi`s that could be poured into these etf`s as that gives people quick exposure to the shiny stuff.

6.Silver usually produced as a by-product of copper,lead and tin mining- which currently due to downturn isnt happening as much as pre downturn-thus adding to shortage/reduction in inventories.

7.Manipulation argument which if you believe it says due to unjustifiably large short positions of several merchant/commercial banks in US have suppressed the price way below its fundamental value.There is currently a lot of pressure on regulatory authorities in US (CFTC) to stop this.Shorting allowances are meant to provide liquidity to the futures market and the current shorting contracts on silver are approx x5 or more than the pro rata amount of the next most shorted commodity according to Ted Butler (one of the worlds acknowledged silver experts).

Are the shorters going to raise the stakes and increase their positions to further push price down or are they going to liquidate their postions soon/be forced to do so by a reduction in number of short contracts available?

Arguments against silver:

1.Much household silver could be reclaimed / recycled in event of a big upswing in price.Question is how much?

2.Shorting has supposedly gone on for 30 years - why would it stop now?

Anyway that`s why i would rather be in silver at the moment than out!Just hope im right!This is NOT an inducement for people to buy silver.Always do your own research and "caveat emptor".

Thanks for reading.redprince.

Edited by redprince

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Thanks for the post VT - although you have tried to answer my question my main point was more to do with why gold, you rightly pointed out it was due to its abundance but what about bismuth and tellurium? They are considerly scarcer than gold, silver, palladium, platinum, etc, etc, yet worth a fraction of the price. I suppose you could argue gold's historical importance but really, its only a useless metal. Is there a possibility gold could lose all it's value one day?

My pedantic arguement aside - where can I buy some gold? lol

30mins of scanning the internet I've seen prices for krugerrands range from £260 to £670. What is the atual price of a single full krugerrand? Although a poor student I would love to buy just one with whatever money I make over the summer!

Hi DD,

Essentially what you are saying is correct, gold in and of itself has not much use...but then again that can be said for paper money, sterling, USD, what are they at the end of the day? They are pieces of paper. If you look into how a medium of exchange actuully becomes worth something it is once it becomes accepted as a medium of exchange. It is when society or the peoples who are using that money have faith that it has purchasing power. Once this faith or acceptance takes root, then demand increases for it as a medium of exchange. So it could be said it is mass psychology acting at once which manifests as demand which gives paper money value. When faith is lost in money then its value collapses as demand drops and people spend money as quickly as possible and the velocity of money goes up, which usually leads to very high rates of inflation, perhaps even hyper inflation.

Gold is the same in that, it has been used for thousands of years as a medium of exchange throughout empires and in trade. The reason being that it is perceived as having value, and history shows that it has value. Also it is much more durable that paper money, it is easily stored, and can be broke down into very small sizes from a few grams to many ounces to kilos.

So yes, gold like any currency does need faith. However as for the reasons mentioned gold supply cannot be manipulated like the supply of paper money can be by governments which is probably why it has stood the test of time as a store of value over many many centuries.

I m not saying one should hold all their wealth in gold. However, 10-20% is not a bad idea, depending on circumstances. It is used to preserve purchasing power not necessarily create wealth. A good insurance policy.

So we can establish that gold and sterling are both useless objects. However, any experience is the merger of subject and object and from that you get resultant event or experience. Gold is an object, money is an object, it depends on the contact with a subject which gives it value. The subject is people, and it just is that they perceive value in gold. It is not a trend that is likely to reverse, not saying it will not. People will lose faith in paper money before gold. This has been the way its been, and continues to be.

Another reason why gold has value is its cultural significance in many countries. It goes much deeper than an investment or a store of value. It is deeply in grained in cultures, particularly Asian cultures.

Having lived in Asia I have seen this with my own eyes. Thailand was formerly knows as Siam ( you might recall the Siamese twins, which is where the term orginated from) Siam in Sanskrit actually means gold. It is the same in China, they actually love gold.

Sites likes this are everywhere...Thai_gold_shop_006.JPG

Thai_gold_2.jpg

Thai_gold_3.jpg It is not uncommon to have 10 gold shops all clumped together in one area.

Also the shops are usually buzzing with people. Most Thais will try to own some gold, with the very rich owning alot.

Also in India, gold is used as a gift during Indian wedding season.

The Saudis are big into their gold also. They were some of the first to be buying gold at the start of this bull market 7 years ago. What you might call the smart money.

The point about those other elements is a good one. There is no demand for these or precedent for these elements being used as a medium of exchange. You could buy them I m sure, but the reason they are a fraction of the price is that no one demands this or has accepted it as a medium of exhange.

Well, I googled tellerium. If only we had been having this conversation in the year 2000, we 'd all be rich, lol. This metal has went from 4 USD to over 100 USD today. A 2500% increase. So, this kind of makes the point that it is its scarcity that gives it value and also it said it is being used in computer equipment alot now which is why the value has increased so much. Interesting, do you want to take on the role of as raw material reseacher for me Doctor Dick :lol: ?

However, this might be a cyclical thing with this element, where in if demand or the use in computer becomes redudant then it will lose its value again, as it is not seen as a medium of exchange. The other point is that gold is much more liquid. It would be quite difficult to obtain tellerium at a retail level I would imagine and it could be quite hard to find a buyer.

Shipbuilder made a point that gold may not hold its value as it once did. Could be right of course. However, if we deal with what is actaully happening now, rather than postulation it can be seen that this gold secular up turn which usually last 14-32 years is still playing out as one would expect, despite the emergence of the internet. In the early stages of a secular up turn gold usually lags other commodities, and in the latter stages it will catch up and surpass other commodities. This seems to be playing out now, if we take a 10 year trend, a 5 year trend a 1 year trend and even a monthly trend. This is as close to "real time" as we can get.

Shipbuilder is right in that we have now more access to a broad range of commodities. However, the same is true for gold and silver.

There many funds, ETF's and venues dedicated only to gold, single eft's with only gold. There are not too many dedicated to only to sugar, corn, wheat etc etc...

The other point is that gold or silver can be much more easily stored than wheat, sugar, corn, oil. Imagine the costs of trying to store oil or uranium in your back garden. How many tonnes of wheat or copper would be needed to make one kilo of gold, which I can easily store in a metal box in the back garden?

Also, these other commodities have a limited life span...gold can be held indefinitely over a long number of years. How much easier is it to storre and transport and find a buyer for that other commodities?

It also assumes that all commodities will peak in price at the same time which is not the case. Gold is much stronger than other commodities in the last phase of a commodity bull market. Sugar for example stored peaked a few years before old, same with coffee and cocoa and wheat. The individual supply and demand for each commodity will be stronger or weaker at different times in a bull market, meaning that for a few years the price of gold could be much higher than the others.

Shipbuilder is right of course that it is good to own a selection of all these commodities. You will find that people who own gold will own the others anyway and vice versa. I do also think there are better commodities to own than gold, silver and sugar are historically much cheaper.

If one expects this to be the end of the gold bull market, then I ll postulate that interest rates have hit a permanent low and will not rise again. Is this a rational assumption? I dont think so.There is a bubble in government bonds, Treasury yields are extremely low as are Gilt yields, gold bull markets end with interest rates in the double digits, not at historic lows. As the bubble in US treasuries will burst one day like every bubble one has to ask what are the ramifications of this event for the price of gold.

For instance US 10 year Treasury note yeilds at the beginning of the last gold bull market were under 4%, in 1966 by the end of the bull market in gold and the bear market in treasuries treasury yields were 17% and gold had went from 35 USD in 1966 to 850 USD in 1981/82

post-13039-1248528833_thumb.jpg

post-13039-1248528852_thumb.jpg

post-13039-1248528873_thumb.jpg

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Thanks VT, very informative as per usual. Now if only 10-20% of my savings could buy even one krugerrand lol

Silver is much more undervalued relative to gold on a historical basis- i see a much greater upside for silver than gold at current prices esp when one considers:

1.that much of world`s silver has/is being depleted through industrial use and gold isnt

2.big govt auctions due shortly on gold which in short term will drive price down

3.gold nowhere near as fundamentally undervalued as silver

4.above ground silver much scarcer than gold generally with little or no worldwide inventory left

Guess this proves the point i made earlier about peeps twigging the fact that silver is significantly more undervalued than gold!

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I see this post has been moved to the precious metals section. I remember the good old days on here when the gold thread, in the main forum, was the biggest thread on this website. The original Northern Ireland thread was the second biggest thread. Then there was a big falling out between some of the gold bugs and the moderators here. Most of the gold bugs moved over to Dr Bubb's GEI website. Goldfinger and cgnao may yet be proved correct, 'Protect yourself. 100% correct guaranteed!'

My pedantic arguement aside - where can I buy some gold? lol

30mins of scanning the internet I've seen prices for krugerrands range from £260 to £670. What is the atual price of a single full krugerrand? Although a poor student I would love to buy just one with whatever money I make over the summer!

Anne Diamond was just on telly in an advert 'goldforcash' :blink:

There are several ways of owning gold for investment/wealth storage purposes. All of them have their advantages and disadvantages.

Physical bullion (investment grade) coins and bars in your hand have no counter party risk. However, they can get lost or stolen. For single bullion coins, I think coininvestdirect has the cheapest buy/sell costs. Other companies you may want to check are Bairds (goldline), Chards (taxfreegold) and ATS Bullion.

Allocated physical gold with a company like Bullion Vault or Goldmoney - has a degree of counter party risk. However, your allocated physical gold is vaulted and insured. Should anything happen to the company you can still claim ownership. Bullion Vault has even won a Queens Award for Innovation this year. This is a relatively cheap and safe way of ownership.

The third method is ETF's (electronically traded funds). However, this method has a lot of counter party risk. The paper (or electronic) gold market is several times larger (depending on who you listen to, maybe 30 times larger) than the actual physical gold market. Therefore, if the company goes bankrupt you may find several people claiming to own the same piece of gold or maybe even left holding just worthless paper. If AIG had not been bailed out last year many people would have found themselves in this position.

As usual - do your own research.

Good luck,

BB

Edited by Belfast Boy

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If a ship sinks to the bottom of the sea, with 3 million USD of paper money, or 50 kilos of gold, which one would be worth visiting the ship wreck to retrieve? One reason is that it is durable and has been around as a medium of exchange for 3000 years...

Look at the lifespan of any fait currency, or paper currency if you like. The Assignats in France between 1790-1792 lost all of their value due to hyperinflation...its gone long ago.

How about the old Contienental USD during the American Revolution of 1775? It is worthless and no more.

How about the Weimar mark in Germany in the 1920's...

History is replete with examples of a paper currency being devalued and destroyed by the government policy.

Money is an indirect medium of exchange and evolved from the inflexibility of the old barter system. Gold is still seen and used as a currency. Many people use gold as a currency, just as we use sterling to buy good in shops.

You might ask but gold is not accepted in shops here, or by the bank to buy a house? This is true. Like money it is an indirect medium of exchange.

Similarly your labour and work is not accepted as a medium of exchange, that is why your employer whether that is yourself or a company will exchange that labour, work and production into Pounds...which you will then convert into food, fuel, housing, leisure and a whole host of other activities...

In the same way of thinking, gold is very liquid and can easily be converted into sterling, gold is the same as labour if you like in this example. Labour is not money, but it has value, gold is not sterling, but it has value relative to sterling, and sterling is the indirect medium of exchange in the UK.

It is said that in a deflationary environment it is best to be cash as cash increases in value or assets fall,the same thing actually. However, if gold has been used as money for thousands of years, then it stands to sense that gold is a cash equivalent. Gold has come into its true role as a medium of exchange in this deflationary environment. It has held its value.

Gold today will buy you more Canadian Dollars that 1 years ago, more Sterling than 1 year ago, much more property than sterling will, much more oil than 1 year ago, much more wheat than 1 year ago, much more corn that a year ago, much more milk, much more insurance, many more Euros, many more AUD, many more NZD, many more Icelandic kroner...etc etc...

At the peak of the boom in Northern Ireland house prices would you have rather owned gold or sterling? What price would a house be today in gold terms and in sterling terms. House prices have fallen much much more in terms of gold that sterling...

So far from being a useless metal, it has been extremely valuable in maintaining intrinsic wealth and purchasing power. The 50% plus falls in houses prices everyone is looking for has been more than achieved if using gold as a medium of exchange.

You might not be able to build a house with gold, but then again, you can't build a house with food, yet is food useful? You can certainly buy a house with gold, and more house than sterling will buy.

Why does it maintain value?

Well, the average yearly new supply of gold is about 2400 tonnes. It is the very scarcity of gold that gives it value. It comes back to supply and demand, and the relatives between these two fundamental pricing mechanisms.

On the other hand, paper money can be created in limitless amounts, The Bank of England can issue £150 billion of Gilts in the click of a mouse. Paper money has been losing its value against real assets for decades and centuries, and will continue until one day it becomes worthless. The supply of gold can not created by the click of a mouse. It is limited. Paper money is not. So the more money chasing less of any product will lose value relative to that product.

In a nutshell this is why gold is useful. Of course there is times when it is better to own gold than other times. However, if you look at these cycles and if you look over the longrun, it can be seen that gold has always maintained its value. The price of oil in gold terms today is pretty constant with 30 years ago...Can the same be said for sterling? Or any currency for that matter?

Money in itself is a commodity and the cost dictated according to the supply of it and the demand for it by society. The cost of money, ie, the interest rate should be determined like this. Central bankers however have totally distorted what the true cost of money should be today by trying to gauge the rate of interest on money, which is deeply flawed.

Take a look at this chartDollar_PP.jpg

This is a chart of the USD purchasing power over 200 years. I marked the black line as this was when the Federal Reserve was created in 1913. The USD has lost 95% of its value. Under the gold standard, in the period between 1800 to 1900 the purchasing power of the USD fluctated but always came back to the mean. This is stable prices. Now the story is totally different...It is clear that trying to centrally plan the cost of money has been a complete failure. No one has that wisdom to know the collective and aggregate time preferences of every individual in society for money. How can 14 government buereuacrats know this for everyone? They cannot. No one can.

The Federal reserve has failed twice before and the third one created in 1913 will also fail, probably due to some uprising or revolution as the USD will lose perhaps all its value in the coming decades. These things take time.

History shows that, and right now today shows that it is wise in periods like this to own some gold.

People were saying exactly the same thing about property a few years ago. It's safe, it holds its value, the government can't create any more land. You can also rent it out, something you can't do with gold.

In my view, property is a better investment than gold, and I don't think property is a good investment at the moment.

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Thanks for the post VT - although you have tried to answer my question my main point was more to do with why gold, you rightly pointed out it was due to its abundance but what about bismuth and tellurium? They are considerly scarcer than gold, silver, palladium, platinum, etc, etc, yet worth a fraction of the price. I suppose you could argue gold's historical importance but really, its only a useless metal. Is there a possibility gold could lose all it's value one day?

My pedantic arguement aside - where can I buy some gold? lol

30mins of scanning the internet I've seen prices for krugerrands range from £260 to £670. What is the atual price of a single full krugerrand? Although a poor student I would love to buy just one with whatever money I make over the summer!

One ounce of gold currently has a market value of £597.05. You can see the current rate at http://uk.finance.yahoo.com/q?s=xaugbp=X

Expect to pay a very small premium over that for a 1 ounce kruggerand. They also come in 1/2 oz, 1/4 oz and 1/10 oz sizes which are worth proportionately less.

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People were saying exactly the same thing about property a few years ago. It's safe, it holds its value, the government can't create any more land. You can also rent it out, something you can't do with gold.

In my view, property is a better investment than gold, and I don't think property is a good investment at the moment.

The difference between a spike in property prices, and gold, is because you have to pay cash for gold, unlike property that could be bought with easily available credit.

Land for houses can be made at the stroke of a governments pen.

A never ending supply of houses can be provided with credit, can't do that with gold till you have dug it out of the ground.

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He really should cut down on coffee - just a bit too hysterical.

If someone (and i did) had suggested 6 years ago that banks would go under and the US banking system would come within 24 hours of total failure(fact it did) that person would have been laughed out of town.

The scenario painted above i admit is extreme and hopefully unlikely but if our govts dont address it root and branch asap it will become more and more likely: that`s part of the reason i posted the link.

The other reason was to get a debate going about how best to preserve your purchasing power in such an event occurring.

You are entitled to your view however you appear to have completely missed the whole point of this thread.

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People were saying exactly the same thing about property a few years ago. It's safe, it holds its value, the government can't create any more land. You can also rent it out, something you can't do with gold.

In my view, property is a better investment than gold, and I don't think property is a good investment at the moment.

You can't walk into a bank and get a 125% loan at six times your income (well, ten times after you've lied) and use it to buy a wheelbarrow full of sovereigns though.

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Guest spp
Silver is much more undervalued relative to gold on a historical basis- i see a much greater upside for silver than gold at current prices esp when one considers:

1.that much of world`s silver has/is being depleted through industrial use and gold isnt

2.big govt auctions due shortly on gold which in short term will drive price down

3.gold nowhere near as fundamentally undervalued as silver

4.above ground silver much scarcer than gold generally with little or no worldwide inventory left

Guess this proves the point i made earlier about peeps twigging the fact that silver is significantly more undervalued than gold!

+1

Gold will do well, but I also favour Silver!

This is no bubble in precious metals. It's the recognition of a fraudulent monetary system thats driving the price higher.

The beneficiaries of the fraud are mostly those in the financial sector of the economy, very large corporations, and the politicians they finance. The victims are everybody else, but especially ordinary people who are dependent upon the integrity of our monetary system for their savings, their pensions, and their jobs. Already, fraudulent monetary systems modeled after our own have wiped out the savings, pensions, and jobs of hundreds of millions all over the world, including in Russia, the Philippines, Mexico, Brazil, South Korea, Malaysia, and many other countries.

Silver will do well if there is some kind of crazy 'green shoot recovery' (industrial uses), or if we have a currency collapse.

Silver is the ultimate financial protection IMO...but do your own research...I've done mine!

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You can also rent it out, something you can't do with gold.

Not technically true, I'm afraid. You can and people do lease out gold.

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Guest absolutezero

"Silver is undervalued".

Could it not be that silver is the right price and gold is OVERvalued?

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