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Laura

Feel The Pain Of The Gold Bulls

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Just a idle early morning thought.

To be well into Au, & deep into UK property must be agony if you are trying to sell, especially with the latest MSM 'you must reduce the price' headlines.

Property is already down 70% since 2005 (IIRC, from DF's graph in Money Week's graph).

It's 45% down on two years ago, assuming the 'value' in mighty sterling hasn't moved.

Owning gold just thrusts this reality into your face every day.

Yes you are protected from the forthcoming sterling collapse from heavy-duty QE, but your home(s) as a pension is rapidly becoming a joke.

Imagine being into a gold & BTL - Is there such an animal? - Maybe i should ask on 'Singing Pig'? :D

Edited by Laura

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Why not price houses in shares of Apple? Then they are down over 95% since 2005.

Wouldn't that mean admitting CNBC made a correct call? <_<

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I price my house in Mars bars.

Global warming and central heating are my enemies.

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I price my house in Mars bars.

Global warming and central heating are my enemies.

Pleasure Tip no 7:- A wise girl rounds them off before putting them in the freezer

EDIT: please stay on-topic BL!

Edited by Laura

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snip

EDIT: please stay on-topic BL!

The 'Mars' wording in the middle is still red but will be shadowed in gold and black.

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Just a idle early morning thought.

To be well into Au, & deep into UK property must be agony if you are trying to sell, especially with the latest MSM 'you must reduce the price' headlines.

Property is already down 70% since 2005 (IIRC, from DF's graph in Money Week's graph).

Not that again.

Housing has intrinsic value because it can be rented out for money. That in turn means you can value it with some degree of accuracy. It may be overpriced at the moment, but at least it is a useful asset to have.

Gold has some intrinsic value too (gold fillings work quite well), but that is plainly not what determines its price. The question therefore is what reason is there for buying it other than that it is going up? I am especially interested in reasons that would not equally apply to housing, seeing as on this site we generally accept that it is not a great investment at the moment.

Here are some wrong reasons for buying gold:

You can turn it into jewelery. Yes, but that is nowadays vulgar and associated with rap artists.

It will be useful in the apocalypse that is surely coming. Yes, but guns, baked beans, and detergent can be expected to be more useful still.

It can be used to diversify a portfolio. So can other rubbish.

A government cannot print it. Governments can print very few things, so why pick gold of those that they cannot.

It has been used as money for centuries. But it isn't any more, and few people nowadays know how many chickens a gold coin is worth. That is a bit of a problem if you want to buy food or other things with gold.

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Gold has some intrinsic value too (gold fillings work quite well), but that is plainly not what determines its price. The question therefore is what reason is there for buying it other than that it is going up?

I'm trying to advance the argument here, truly:

Why buy an umbrella if it generates no cashflows? It must be worthless.

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Not that again.

Housing has intrinsic value because it can be rented out for money. That in turn means you can value it with some degree of accuracy. It may be overpriced at the moment, but at least it is a useful asset to have.

Gold has some intrinsic value too (gold fillings work quite well), but that is plainly not what determines its price. The question therefore is what reason is there for buying it other than that it is going up? I am especially interested in reasons that would not equally apply to housing, seeing as on this site we generally accept that it is not a great investment at the moment.

Here are some wrong reasons for buying gold:

You can turn it into jewelery. Yes, but that is nowadays vulgar and associated with rap artists.

It will be useful in the apocalypse that is surely coming. Yes, but guns, baked beans, and detergent can be expected to be more useful still.

It can be used to diversify a portfolio. So can other rubbish.

A government cannot print it. Governments can print very few things, so why pick gold of those that they cannot.

It has been used as money for centuries. But it isn't any more, and few people nowadays know how many chickens a gold coin is worth. That is a bit of a problem if you want to buy food or other things with gold.

Gold derivatives.

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I'm trying to advance the argument here, truly:

Why buy an umbrella if it generates no cashflows? It must be worthless.

:) Thxs _w_, I know just the property obsessed couple to throw that one at.

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I'm trying to advance the argument here, truly:

Why buy an umbrella if it generates no cashflows? It must be worthless.

Maybe you like not to get wet when it rains? That is a good reason for buying a few. It would clearly be silly to fill a warehouse with umbrellas and keep them there until you retire and need some cash.

The whole point of an investment is that there ought to be a rational reason for why it should generate more money in the future than it costs to buy.

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Maybe you like not to get wet when it rains? That is a good reason for buying a few. It would clearly be silly to fill a warehouse with umbrellas and keep them there until you retire and need some cash.

The whole point of an investment is that there ought to be a rational reason for why it should generate more money in the future than it costs to buy.

In today's environment 'investing' with the aim of standing still is not an irrational venture.

I might be pushing too far on the analogy here, but it's raining now and some weather forecasts predict a monetary storm is coming. Buying the only monetary umbrella I know for my family doesn't seem so irrational.

But yes, the vision of a warehouse filled with umbrellas is rather ridiculous :).

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:) Thxs _w_, I know just the property obsessed couple to throw that one at.

Don't please. They must be so happyyyyyyy in their delusion, it would be cruel to open their eyes...

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few people nowadays know how many chickens a gold coin is worth.

Is that discounting the 'few people' in China, Vietnam, Russia, The Middle East, parts of South America etc etc?

Edited by Errol

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Gold has some intrinsic value too (gold fillings work quite well), but that is plainly not what determines its price. The question therefore is what reason is there for buying it other than that it is going up? I am especially interested in reasons that would not equally apply to housing, seeing as on this site we generally accept that it is not a great investment at the moment.

An anecdotal: if you go to Turkey (a country that's likely to join the EU in the near-to-medium future), you can take wads of paper with € printed on it. They are not legal tender in that country. However, many businesses will accept them (obviously, not at the butchers; we're talking here of €100+ transactions...). In fact, there are cash machines (even in non-tourist areas) that will hand out Euros.

Why? They're just bits of paper. You can't buy a chicken with them.

But people accept that they represent stored wealth, and that they can (at some remove) be used to buy a chicken.

My point: exactly the same logic can be applied to gold. It's worth something, simply and purely because a lot of people think that it's worth something. And that a sovereign can be used to buy a chicken.

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An anecdotal: if you go to Turkey (a country that's likely to join the EU in the near-to-medium future), you can take wads of paper with € printed on it. They are not legal tender in that country. However, many businesses will accept them (obviously, not at the butchers; we're talking here of €100+ transactions...). In fact, there are cash machines (even in non-tourist areas) that will hand out Euros.

Why? They're just bits of paper. You can't buy a chicken with them.

But people accept that they represent stored wealth, and that they can (at some remove) be used to buy a chicken.

My point: exactly the same logic can be applied to gold. It's worth something, simply and purely because a lot of people think that it's worth something. And that a sovereign can be used to buy a chicken.

Bloody expensive chicken.

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A government cannot print it. Governments can print very few things, so why pick gold of those that they cannot.

It has been used as money for centuries. But it isn't any more, and few people nowadays know how many chickens a gold coin is worth. That is a bit of a problem if you want to buy food or other things with gold.

Just because it is viewed this way in the "sophisticated" UK, it doesn't mean the rest of the world dismisses it so lightly.

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Just because it is viewed this way in the "sophisticated" brainwashed UK, it doesn't mean the rest of the world dismisses it so lightly.

Might as well call a spade a spade.

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Is that discounting the 'few people' in China, Vietnam, Russia, The Middle East, parts of South America etc etc?

I have been to seven countries included in that list. No-one ever asked for gold, and they were pretty much always willing to take US dollars. They never refused the local currency, and never offered gold as change. In fact the only gold I saw was in museums.

Do you really take gold with you when you travel? Have you tried to see if a bundle of US notes might work better?

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Why? They're just bits of paper. You can't buy a chicken with them.

Actually, in the bits of Turkey I have been to you certainly could if you so desired.

But people accept that they represent stored wealth, and that they can (at some remove) be used to buy a chicken.

Tulip bulbs can also be used to store wealth. That does not make them a good investment, except maybe during a mania.

My point: exactly the same logic can be applied to gold. It's worth something, simply and purely because a lot of people think that it's worth something. And that a sovereign can be used to buy a chicken.

Yes. So it's unlikely that gold will become worthless anytime soon. However, that does not mean it is possible to tell at what price it is a good investment. With a house you can reasonably decide to buy it as a way of pre-paying the next few decades worth of your housing costs, or you can buy a BTL in the expectation that it will produce rent somewhere in the region of 30% of the income of whoever lives there. The only way it makes sense to buy gold is if you expect to sell to a greater fool later on. You may be confident you will find one (e.g. because you think there is unanticipated hyperinflation coming), but I am not.

I expect there will be a lot of over-excited goldbugs attacking you soon. The argument is supposed to be that gold is somehow valuable in itself, whereas fiat money is backed just by people's perception of its value :-)

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The argument is supposed to be that gold is somehow valuable in itself, whereas fiat money is backed just by people's perception of its value :-)

Fiat is valuable by virtue of its ability to force debt settlement. Shit loads of debt out there.

You can't say the same for gold.

Edited by Alan B'Stard MP

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I have been to seven countries included in that list. No-one ever asked for gold, and they were pretty much always willing to take US dollars. They never refused the local currency, and never offered gold as change. In fact the only gold I saw was in museums.

Middle East - Place huge value and importance on gold. Gold currencies are in planning stages.

China - Have established history of saving in gold/silver (central bank buying in vast quantities as well)

India - Gold is firmly established in the culture as the saving vehicle of choice.

Vietnam - Offer mortgages denominated in Gold. Many shops accept gold and value things in gold.

Russia - Central bank on large-scale gold buying project.

They may choose to use the paper but, make no mistake, they understand how to protect value.

Edited by Errol

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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