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The First Article In A Long Time Warning About You Know What

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http://uk.finance.yahoo.com/news/Why-gold-safe-yahoofinanceuk-1926013581.html

Why gold isn’t safe
Here are just some of the reasons why gold isn t likely to shine for most panic buyers.
With ever-more consumers, eBay users, shops and even supermarkets buying into the latest gold rush, here's why I still think it's a bad investment.
Valuing gold is impossible
I don't understand gold, because I can't value it. The vast majority of it merely sits in vaults. We don't even actually know how much gold is real and how much is electronic. There have been some disturbing committees in the US about this issue.
Unless I feel confident in my estimate of what an investment is worth, I'm not interested in it. Otherwise, how do you know if you're buying it when it's under- or over-priced?
Top share tips of 2011
Knowing when to sell is even harder
Since you don't have a clue what it's worth, you don't know when you're selling at a good price and you'll always be worried it's going to fall. By buying gold, you're buying more worry.
No one buys gold believing it's actually worth more than they're paying. They buy it because they're scared. But when should you stop being scared? If you stop too soon, gold may go up much further while your cash sits in your current account earning 0.1% interest.
Alternatively, and more likely, you'll sell too late. Looking back at the last inflation-induced gold rush in the late 1970s, prices crashed long before inflation was normalised, so most people had no warning.
What's more, the price crash took place in a matter of weeks to the effect that almost everyone who bought gold at the end of the 70s lost money and would still be doing badly today.
Trading costs are high
When everyone wants to sell simultaneously, it's impossible for the average person to win. Most people will lose with gold.
One of the major reasons for this is the costs. If you're not careful you can pay up to 25% when you buy and when you sell, which makes it hard to make a profit. (If you decide to buy gold, research where you get the best prices.)
Presumably you're not thinking to keep your gold when the price falls down again after the fear recedes. You're expecting to trade your gold quickly, perhaps just months or a few years from now.
However, trading quickly eats hugely into our returns due to the costs, and is one of the biggest causes of long-term investment under-performance.
Gold provides no income
Not only does gold produce nothing, but it provides no income. Many PLCs do both: they produce things and pay regular dividends from profits.
Gold, on the contrary, costs money to store (or increases your home insurance premium if you risk putting it under the floorboards).
Free guide to investments with high incomes
Buffett doesn't like it
Warren Buffet, the most successful investor in the world, and the one who talks the most intelligent, rational game, in my view, doesn't like gold.
He estimated in a CNN interview that if you take all the gold that's ever been mined you could make a cube 67 feet across:
"For what that's worth at current gold prices, you could buy all — not some — all of the farmland in the United States. Plus you could buy 10 Exxon Mobils [the company is currently worth about $400billion], plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"
Gold loses to inflation
Some people say gold is a currency. The debate between economists on this issue is heated and more complicated than most people realise.
I'm not bothered how you classify gold, but it has at least one similarity with currency: it has lost to inflation most of the time. This is ironic, because most people buy gold to protect themselves from inflation.
Shares and property, on the other hand, have beaten inflation most of the time, after costs.
Even moving your savings accounts cannily over the noughties should have kept you reasonably close to inflation, but with much lower risk and volatility than gold: the times when you could have beaten inflation with cash have approximately made up for the times you lost to it, according to my rough data.
Let's be more constructive
However, doing nothing is also not an option, because the current inflation risks are very real. Whenever we have printed money in the past, it has led to more inflation, and sometimes very high inflation.
You'll probably lose to inflation with cash, but my call is nevertheless to stay flexible with your emergency cash and short-term savings.
We all need to be able to access some cash in a hurry. Improve your overall return by tarting between the best cash ISAs and easy-access savings accounts, and buy special deals when possible (such as recommended in Earn £60 a year from an empty current account).
Switching around should limit any inflation-induced devaluation of your savings, with much lower risk than investing in gold, to the effect that you'll probably end up with more buying power at the end of these troubling times than most gold buyers, who'll sell too late and pay too much.
Compare savings accounts online
Those of you with more than enough savings should consider investing in shares and property with the excess.
Shares and property are both long-term investments and they're not guaranteed to win over any period, but gold is much less likely to win over the long term.
A regular investment in shares of the same monthly amount is the best way to reduce your risk, as you'll buy more shares at times when the prices are cheaper and less when they're expensive.
Many large companies seem to be rather cheap right now, so buying the FTSE 100 index or a portfolio of some of those companies held for the long term is likely to do better, not least because they have a history of beating inflation over the long run and you cut out fast trading charges.
You'll have to expect lots of steep ups and downs in between, however. That's the price you pay for attempting to beat inflation.

"Knowing when to sell is hard" the Achilles heel with gold imo--it is a hugely emotional punt.

I find I am moving slightly toward a moderate bearish position on gold.

Off to the gold forum with yer---Gerr-er cha!

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Gold is going to continue to do fine.

The banks are being restriced in their investments and are chasing high yield, high growth, high risk investments.

They are being fuelled by QE money here and the US.

Betting against Gold is betting that the US will back out of QE and rates will rise.

They wont.

Dont be a sore loser - you shoulda listened to Bubb all those years ago......

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Who's gonna be the first to say it guys?

When I opened this thread I thought it was gonna be about young girls knickers ?

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GOLD

01/31/2011

09:19

1325.10

-13.30

-0.99%

$1374 lookin mighty fine 'bout now fellas.

AKA--why the big change in direction despite turmoil in Egypt and inflation said to be starting in the EZ.

Just broke 1325 which a lot of technical analysts said would be the final wave retrenchment before a sell off. Not sure I agree with this as there will be buying on the dips by tomorrow, maybe.

GOLD

01/31/2011

09:21

1324.20

-14.20

-1.06%

Bit of a free fall underway--what's happening to trigger this?? Makes no sense given the fundamentals are all positive for gold???

GOLD

01/31/2011

09:23

1323.90

-14.50

-1.08%

Edited by Realistbear

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Love Money who I think pay Yahoo to sell sinks to credit card, insurance, and loan companies have an obvious vested interest but I'm sure there are some good points made.

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GOLD

01/31/2011

09:19

1325.10

-13.30

-0.99%

$1374 lookin mighty fine 'bout now fellas.

AKA--why the big change in direction despite turmoil in Egypt and inflation said to be starting in the EZ.

1) 1374 was busted, so doesnt look any good at all. Quite wrong in fact.

2) I told you why in the gold thread.

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That piece was written by a complete moron.

The guy is also selling share tips, a scheme with 12% returns for investors and advice on why now is the time to buy property :lol:

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Gold will go down properly when we have a sound financial system once again - we are a long way from that right now.

If you believe in paper you'll believe in anything. It cannot be redeemed for anything of use at a central bank because it is not backed by anything of use.

Take a tenner to the BoE and ask them to redeem it - they'll give you back two fives, not gold, not oil, not food, not fuel, just more paper.

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What a banking cartel shill the author is. Believe him at your peril.

My response to his ill-thought out points:

Valuing gold is impossible

Really? Is it any more difficult to value than that piece of paper in your wallet? Or a Euro? If you can count, then you can assess its value. He goes on to say, "We don't even actually know how much gold is real and how much is electronic. There have been some disturbing committees in the US about this issue."

I believe he is referring to the fact that there is many-fold more electronic and paper promises of gold-onwership in the gold market than actual gold (as a result of long running effort by central banks, bullion banks and governments to suppress the gold price to bolster the value of fiat currencies) and that this fact has been increasingly called out by investigative work by GATA (Gold Anti-Trust Action). The only people who should be disturbed by this is the people holding fiat that is worth a lot less than they think it is. This is probably the number one reason for holding PHYSICAL GOLD, when the metal exchanges of the world fail to deliver because there is too little real gold to fulfil too many outstanding false paper-gold contracts, what do you think will happen to the value of real gold?

Knowing when to sell is even harder

You pathetic ignorant sniffling peons wouldn't know when to sell if the authorities screamed it in your face, so don't take silly risks with your wealth, just keep holding nice safe dollars and wait for the change you can believe in.

Trading costs are high

The author quotes 25%. In reality for me it is a 3% buy/sell spread on physical. Not exactly high when you consider negative real interest rates in your savings are exceeding that. Plus you don't want to be trading in and out for quick profits as an ordinary investor, gold is a longer term investment.

Gold provides no income

...for the banks, because the can't make interest on it, that's why they hate it, they can't make money for nothing, it is the currency of the free man. Besides, I seem to have made about a 20% annual return (if I sold today) in the last 2 years on my gold. How's that for an unproductive asset? How's your savings account treating you?

The Warren Buffet quote:

"For what that's worth at current gold prices, you could buy all — not some — all of the farmland in the United States. Plus you could buy 10 Exxon Mobils [the company is currently worth about $400billion], plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

Totally misses the point that gold is money, a tried and trusted form of exchange for centuries. As the value of gold rises (effectively it is a strengthening currency), its buying power will increase. What would you rather have? Something that will purchase you 20 or 30 Exxon Mobils in a few years (perhaps less) time, or trillions of bits of worthless fresh paper from Ben Bernanke printing press?

Gold loses to inflation

Inflation alone is ineffective as a measure. Providing real interest rates out pace inflation then investors will favour interest bearing accounts or bonds, as these will give relatively safe real returns. Also an environment with some inflation but a booming economy will not be good for gold, as investors can make decent returns on expanding companies in the stock market. However, in times of negative real interest rates, especially when bonds are providing negative yield and the economy is limping, gold does spectacularly well. It is also worth bearing in mind that since 1971 (with varying results), the powers that be have been manipulating the price of gold lower through gold leasing, naked short selling and other accounting tricks. As I said before, thanks to them they have provided the mother of all get rich quick opportunities for the investor who buys at these artificially deflated prices. When it is shown the emperor has no clothes, physical gold investors will multiply their wealth many-fold.

Let's be more constructive

The author suggest constantly moving your money between bank accounts to find the best interest rate and to pump regular amounts of savings into the stock market as a better means to stay ahead and protect your wealth. So, keep your money in the banks (God knows they need all the capital they can scrape together) and keep buying shares to keep the markets pumped and give the illusion of prosperity (for the city boys anyway). Oh yeah, while you're at it, also buy a house and support the crashing housing market, it's your patriot duty. Now I wonder whose strategy that is?

Needle made a point earlier in the thread about listening to Dr Bubb all those years ago. If you look up his old posts and also those of Cgnao, another pro goldster, both of whom were chased from this site with pitchforks many years ago, you'll see who was right and who was wrong. When you revisit this thread in the future, you'll find the same thing. Mark my words.

Edited by General Congreve

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gold_5_year_o_usd.png

As can be seen from the 5 year gold chart, there have been some brutal corrections but overall it continues to climb. Today is no different and things will never be different until either the dollar has crashed and the world has moved on to a new global reserve currency (possibly reminbi, possibly gold backed 'international currency' which will be pre-cursor to one world currency).

Although gold is most certainly a manipulated market and betting on gold is betting against the central banks, present day prevailing economic conditions all point towards a decrease in the value of dollar denominated financial assets (and the inflated markets that they support) and an increase in the value of commodities, of which gold and silver are most useful in terms of sotring portable value.

Any dilletant economist can see this pattern emerging.

I believe that gold will continue to fall (enough to make my balls shrivel as I bought in at 886 per ounce) and thereafter continue on its overall increasing trend. However, when the penny drops in the global economy that the dollar is toilet paper and enough economies find the nerve to start dropping dollar assets like hot potatoes, then gold will explode in value.

Edited by Retardstic

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I believe that gold will continue to fall (enough to make my balls shrivel as I bought in at 886 per ounce) and thereafter continue on its overall increasing trend. However, when the penny drops in the global economy that the dollar is toilet paper and enough economies find the nerve to start dropping dollar assets like hot potatoes, then gold will explode in value.

Then it's money for nothing and the cheques for free :D

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When I see articles like in the OP I always remember the story about Zimbabwe hyperinflation. In 2006, £1 would buy 100 zimbabwe dollars. Once once of gold cost £300, or 30,000 zimbabwe dollars. If you had bought an ounce of gold with your 30,000 dollars you would now be able to purchase approximately £825 worth of food. If you had kept your Zimbabwe dollars (until the currency finally crashed) you would have been able to buy nothing, perhaps not even a single grain of rice for 30,000 zimbabwe dollars.

The idiot that wrote the article will one day realise that PMs are not always held purely for investment purposes. Like many people I keep a certain percentage in PMs as a hedge, the rest invested in other things.

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When I see articles like in the OP I always remember the story about Zimbabwe hyperinflation. In 2006, £1 would buy 100 zimbabwe dollars. Once once of gold cost £300, or 30,000 zimbabwe dollars. If you had bought an ounce of gold with your 30,000 dollars you would now be able to purchase approximately £825 worth of food. If you had kept your Zimbabwe dollars (until the currency finally crashed) you would have been able to buy nothing, perhaps not even a single grain of rice for 30,000 zimbabwe dollars.

The idiot that wrote the article will one day realise that PMs are not always held purely for investment purposes. Like many people I keep a certain percentage in PMs as a hedge, the rest invested in other things.

For the gold lovers consider this http://www.cnbc.com/id/33242464/?slide=16

Make of it what you will. Some will say great, proves my point, gold is in short supply. I say the USA will never surrender the $. Surrendering the $ to gold means giving control to someone else. Gold is simply a fall back so other countries cannot try it on, and by having the most you control it's price AKA another currency.

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For the gold lovers consider this http://www.cnbc.com/id/33242464/?slide=16

Make of it what you will. Some will say great, proves my point, gold is in short supply. I say the USA will never surrender the $. Surrendering the $ to gold means giving control to someone else. Gold is simply a fall back so other countries cannot try it on, and by having the most you control it's price AKA another currency.

and yet they refuse to allow an audit of fort knox....when was the last time that one was done, in spite of gata's and others requests?

wasnt it yank gold from fort knox being sold that got returned because the bars had tungsten cores?

lots of peopl are of the opinion that the yanks have sold a lot of their gold.

Edited by richyc

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What a banking cartel shill the author is. Believe him at your peril.

My response to his ill-thought out points:

Valuing gold is impossible

Really? Is it any more difficult to value than that piece of paper in your wallet? Or a Euro? If you can count, then you can assess its value. He goes on to say, "We don't even actually know how much gold is real and how much is electronic. There have been some disturbing committees in the US about this issue."

I believe he is referring to the fact that there is many-fold more electronic and paper promises of gold-onwership in the gold market than actual gold (as a result of long running effort by central banks, bullion banks and governments to suppress the gold price to bolster the value of fiat currencies) and that this fact has been increasingly called out by investigative work by GATA (Gold Anti-Trust Action). The only people who should be disturbed by this is the people holding fiat that is worth a lot less than they think it is. This is probably the number one reason for holding PHYSICAL GOLD, when the metal exchanges of the world fail to deliver because there is too little real gold to fulfil too many outstanding false paper-gold contracts, what do you think will happen to the value of real gold?

Knowing when to sell is even harder

You pathetic ignorant sniffling peons wouldn't know when to sell if the authorities screamed it in your face, so don't take silly risks with your wealth, just keep holding nice safe dollars and wait for the change you can believe in.

Trading costs are high

The author quotes 25%. In reality for me it is a 3% buy/sell spread on physical. Not exactly high when you consider negative real interest rates in your savings are exceeding that. Plus you don't want to be trading in and out for quick profits as an ordinary investor, gold is a longer term investment.

Gold provides no income

...for the banks, because the can't make interest on it, that's why they hate it, they can't make money for nothing, it is the currency of the free man. Besides, I seem to have made about a 20% annual return (if I sold today) in the last 2 years on my gold. How's that for an unproductive asset? How's your savings account treating you?

The Warren Buffet quote:

"For what that's worth at current gold prices, you could buy all — not some — all of the farmland in the United States. Plus you could buy 10 Exxon Mobils [the company is currently worth about $400billion], plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

Totally misses the point that gold is money, a tried and trusted form of exchange for centuries. As the value of gold rises (effectively it is a strengthening currency), its buying power will increase. What would you rather have? Something that will purchase you 20 or 30 Exxon Mobils in a few years (perhaps less) time, or trillions of bits of worthless fresh paper from Ben Bernanke printing press?

Gold loses to inflation

Inflation alone is ineffective as a measure. Providing real interest rates out pace inflation then investors will favour interest bearing accounts or bonds, as these will give relatively safe real returns. Also an environment with some inflation but a booming economy will not be good for gold, as investors can make decent returns on expanding companies in the stock market. However, in times of negative real interest rates, especially when bonds are providing negative yield and the economy is limping, gold does spectacularly well. It is also worth bearing in mind that since 1971 (with varying results), the powers that be have been manipulating the price of gold lower through gold leasing, naked short selling and other accounting tricks. As I said before, thanks to them they have provided the mother of all get rich quick opportunities for the investor who buys at these artificially deflated prices. When it is shown the emperor has no clothes, physical gold investors will multiply their wealth many-fold.

Let's be more constructive

The author suggest constantly moving your money between bank accounts to find the best interest rate and to pump regular amounts of savings into the stock market as a better means to stay ahead and protect your wealth. So, keep your money in the banks (God knows they need all the capital they can scrape together) and keep buying shares to keep the markets pumped and give the illusion of prosperity (for the city boys anyway). Oh yeah, while you're at it, also buy a house and support the crashing housing market, it's your patriot duty. Now I wonder whose strategy that is?

Needle made a point earlier in the thread about listening to Dr Bubb all those years ago. If you look up his old posts and also those of Cgnao, another pro goldster, both of whom were chased from this site with pitchforks many years ago, you'll see who was right and who was wrong. When you revisit this thread in the future, you'll find the same thing. Mark my words.

Right, much the same things were said in favour of investing in Real Estate, except that it generates rental income. If you think gold is good, then surely you think property is better. If so, why are you on housepricecrash.co.uk? The main problem which I don't see a way round is that gold is only worth something because people think it is worth something, and if people stop thinking it is worth something, then it will fall in value quite considerably.

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Why gold isn’t safe

Here are just some of the reasons why gold isn t likely to shine for most panic buyers.

This from a man who claims that he "doesn't understand gold".

I don't understand gold, because I can't value it.

Well that's the thousands of years old gold market dealt with then.

Read why property is very likely to be a winner in Now is the time to buy property

Riiiiight. :huh:

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I find I am moving slightly toward a moderate bearish position on gold.

RB, I find your concern for us misguided goldbugs touching. I love you man, I do, but when you're in a hole, stop digging!

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RB, I find your concern for us misguided goldbugs touching. I love you man, I do, but when you're in a hole, stop digging!

Contrarian indicator, i.e. do exactly what RB says, previously it was beware HYPER DEFLATION, as priced went through the roof.

RB now says don't buy gold which means buy gold.

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Contrarian indicator, i.e. do exactly what RB says, previously it was beware HYPER DEFLATION, as priced went through the roof.

RB now says don't buy gold which means buy gold.

BUY BUY BUY!!!!

GOLD

01/31/2011

14:26

1330.80

-7.60

-0.57%

Otherwise the dips will keep pulling it down!

But seriously though folks, gold arouses such powerful emotions that a bearish stance becomes a trollish stance. Gold is, after all, just one punt among many and we all know its boom and bust for gold just as it is for houses. The skill is, as the OP, says knowing when to sell to realise your profit or cut your losses.

I just pity those who bought in at $1400 + as they must be wondering if there is a chance it may take another 30 years to get back to those levels.

But you never know, it may go up again once the Egypt thing is all settled.

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But seriously though folks, gold arouses such powerful emotions that a bearish stance becomes a trollish stance. Gold is, after all, just one punt among many and we all know its boom and bust for gold just as it is for houses. The skill is, as the OP, says knowing when to sell to realise your profit or cut your losses.

I just pity those who bought in at $1400 + as they must be wondering if there is a chance it may take another 30 years to get back to those levels.

But you never know, it may go up again once the Egypt thing is all settled.

Sure except you've called top since $600, the thing is the debt hasn't magically gone away, the printers are still there and they are going to keep on printing and printing and printing.

As said has the price of petrol fallen?

Has the price of food fallen?

Nope, gold may fall in a dollar sense or a £ sense but the $ and £ are paper currencies which simply won't last as they are too tempted to print, they can't help themselves. The Ancient Chinese destroyed themselves multiple times with the printing press.

Today we have much more efficient printing presses.

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that a bearish stance becomes a trollish stance

There are lots of people on here who are bearish about gold but they don't post threads about it when it drops a few percent in value and say "this is the end for gold".

The number of "it's all over for gold" threads you've started must run into the dozens.

The skill is, as the OP, says knowing when to sell to realise your profit or cut your losses.

But RB, you are the OP in this thread.

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BUY BUY BUY!!!!

GOLD

01/31/2011

14:26

1330.80

-7.60

-0.57%

Otherwise the dips will keep pulling it down!

But seriously though folks, gold arouses such powerful emotions that a bearish stance becomes a trollish stance. Gold is, after all, just one punt among many and we all know its boom and bust for gold just as it is for houses. The skill is, as the OP, says knowing when to sell to realise your profit or cut your losses.

I just pity those who bought in at $1400 + as they must be wondering if there is a chance it may take another 30 years to get back to those levels.

But you never know, it may go up again once the Egypt thing is all settled.

It is much more likely to go down when the Egypt thing is settled. You would perhaps buy gold if you think Egypt isn't going to be settled for a very long time, and you think it is going to spread to the rest of the world.

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  • 312 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% +
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      • Even
      • up 2.5%
      • up 5%



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