sleepwello'nights Posted July 19, 2011 Share Posted July 19, 2011 The anti-gold-thread brigade was worse than anyone, even the bugs in my opinion. What are the anti gold arguments? Quote Link to comment Share on other sites More sharing options...
R K Posted July 19, 2011 Share Posted July 19, 2011 Yes - that's right. But my point is that it could morph into a more significant policy. At the moment it is stated that way for ease and speed. I think they might come to the conclusion that it is a longer term strategy to reduce the proportion of debt based money as a share of the money supply in order to prevent default of the financial system whilst at the same time controlling price inflation.. I think it's implicit in their statement isn't it, otherwise they'd leave rates alone until they'd unwound their b/s. So we'll have rates rising modestly, then a period of asset sales, perhaps nuanced over time depending on the state of the economy, accompanied with higher capital ratios in the banking system. At least that appears to be the plan. I'd imagine that having used QE with low rates once they'll feel more comfortable doing so in the future if needs be. QE may be the new black. Quote Link to comment Share on other sites More sharing options...
sleepwello'nights Posted July 19, 2011 Share Posted July 19, 2011 It only earns interest if you lend it to someone. e.g. Loaning it to a bank. Then you have counterparty risk as well as inflationary risk. Isn't there a way of being paid for gold, by leasing it to a bank? Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted July 19, 2011 Share Posted July 19, 2011 Seems to me that gold is a bad investment vehicle Thats right, but its a great hedge vehicle Quote Link to comment Share on other sites More sharing options...
squire Posted July 19, 2011 Share Posted July 19, 2011 What are the anti gold arguments? My comment justs refers to the people who are anti-gold threads, or comments for that matter, in the main forum. It had nothing to do with the pros or cons of the commodity itself. Quote Link to comment Share on other sites More sharing options...
Guest spp Posted July 19, 2011 Share Posted July 19, 2011 My gold strategy. Hang on to my broken gold jewellery. But think of all that 'cash' you could get for your 'unwanted' Gold jewellery!! That mass advertising campaign a couple of years ago was confiscation by stealth in my book, but i'm just a crazy PM 'bug'... The ULTIMATE Bubble!! Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted July 19, 2011 Share Posted July 19, 2011 It has now hit the main headlines on the BBC business page - surely this now deserves merit to be discussed in the main page of HPC? After all, I'd like to think that we are "ahead of the curve".. I don't know why you don't just reinstate goldfingers original gold thread, now that would really show that you where ahead of the curve (but got sidetracked via deflation fantasies for a while). Quote Link to comment Share on other sites More sharing options...
Lepista Posted July 19, 2011 Author Share Posted July 19, 2011 Thanks for you patience and for trying. +1. It's taken a long time, but I really appreciate the experiment that the mods have chosen. I hope that this allows people to discuss oipenly all the different nuances that the econome has on gold gold has on the economy. Thankyou xxx Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted July 19, 2011 Share Posted July 19, 2011 (edited) +1. It's taken a long time, but I really appreciate the experiment that the mods have chosen. I hope that this allows people to discuss oipenly all the different nuances that the econome has on gold gold has on the economy. Thankyou xxx Now that a gold thread has been allowed again in the main forum, do you think there will also be a silver thread. Silver has done far better than gold and should continue to outperform it (as it did in the 1970's gold bull run)? Edited July 19, 2011 by PiXeL8r Quote Link to comment Share on other sites More sharing options...
Lepista Posted July 19, 2011 Author Share Posted July 19, 2011 Now that a gold thread has been allowed again in the main forum, do you think there will also be a silver thread. Silver has done far better than gold and should continue to outperform it (as it did in the 1970's gold bull run)? hey, we're a freindly thread - why not say what you've got to say on here - we'll not bite. Unless you're talking bullocks Anyway, I think it's easy to presume that the fortunes of silver are linked to those of gold, and any variations are discussed here, as far as they relate to the greater economy. other discussions can rightly be banished tothe gold forum. Quote Link to comment Share on other sites More sharing options...
'Bart' Posted July 19, 2011 Share Posted July 19, 2011 What are the anti gold arguments? To sum in RB's oft stated reasons. 1. It's in a bubble. 2. Anyone buying gold in 1980 would still not have recouped their investment. 3. Deflation cometh. While these are RB's views, not mine, I do concede that point #2 is a fair criticism. If Paul Volcker were chairman of the Fed I might even be worried. Quote Link to comment Share on other sites More sharing options...
50sQuiff Posted July 20, 2011 Share Posted July 20, 2011 There's a debate in 'another place' as to whether the instating of a HPC Gold thread signify the start of the 'media enthusiasm' or even 'public awareness' phase in the gold cycle. I have to say I think it does! Of course I think it would be a mistake to interpret the gold bull market as a conventional bubble cycle. When something is de-monetized or re-monetized (by the free market or by fiat) things don't seem to mean revert very quickly. Though perhaps I just missed the roaring bull market in Reichsmarks? Quote Link to comment Share on other sites More sharing options...
Lepista Posted July 20, 2011 Author Share Posted July 20, 2011 There's a debate in 'another place' as to whether the instating of a HPC Gold thread signify the start of the 'media enthusiasm' or even 'public awareness' phase in the gold cycle. I have to say I think it does! Of course I think it would be a mistake to interpret the gold bull market as a conventional bubble cycle. When something is de-monetized or re-monetized (by the free market or by fiat) things don't seem to mean revert very quickly. Though perhaps I just missed the roaring bull market in Reichsmarks? It would be useful to debunk the myth that gold is currently in a bubble. To do this, we need to disassosiate the cost of gold in terms of fiat, and compare gold to what it gets you in tangibles, for example, food, or housing. Rather than being in a bubble, it's rateher the case that gold has been suppressed for the last 20/30 years compared to its historical norm. I have a 1937 florin at home. In its day, that florin (10p in todays money) would have bought you a good 10 or 20 loaves of bread. Today, the silver content makes the florin "worth" about £8, which is enough for around 8 loaves of bread. I'd say there's still a long way to go yet until gold & silver are back to their "normal" purchasing value. 10p today might buy you half a slice of toast. Gold is not an investment - it is a store of value. Quote Link to comment Share on other sites More sharing options...
roadtoruin Posted July 20, 2011 Share Posted July 20, 2011 It would be useful to debunk the myth that gold is currently in a bubble. To do this, we need to disassosiate the cost of gold in terms of fiat, and compare gold to what it gets you in tangibles, for example, food, or housing. Rather than being in a bubble, it's rateher the case that gold has been suppressed for the last 20/30 years compared to its historical norm. I have a 1937 florin at home. In its day, that florin (10p in todays money) would have bought you a good 10 or 20 loaves of bread. Today, the silver content makes the florin "worth" about £8, which is enough for around 8 loaves of bread. I'd say there's still a long way to go yet until gold & silver are back to their "normal" purchasing value. 10p today might buy you half a slice of toast. Gold is not an investment - it is a store of value. The value of the florin was not in the silver content as you imply, but in it's purchasing power as two shillings. When originally minted, the silver content was a small fraction of it's value as currency (unlike the situation with a gold sovereign for instance). So comparing in this way and suggesting a normal historical purchasing power for silver makes no sense to me. Quote Link to comment Share on other sites More sharing options...
50sQuiff Posted July 20, 2011 Share Posted July 20, 2011 The value of the florin was not in the silver content as you imply, but in it's purchasing power as two shillings. When originally minted, the silver content was a small fraction of it's value as currency (unlike the situation with a gold sovereign for instance). So comparing in this way and suggesting a normal historical purchasing power for silver makes no sense to me. I believe people also used to argue in the 60s that the price of gold would collapse from $35 once it was no longer backed by the dollar Quote Link to comment Share on other sites More sharing options...
PiXeL8r Posted July 20, 2011 Share Posted July 20, 2011 I have been producing the following graph since 2007 and it still fits. It is a hyperbolic curve fitting a log chart of the price of gold in GBP. Quote Link to comment Share on other sites More sharing options...
getknk Posted July 20, 2011 Share Posted July 20, 2011 The rise in price of gold is an indication of trust in economy such steep increase in price means, somethings bad gonna happen Quote Link to comment Share on other sites More sharing options...
Lepista Posted July 20, 2011 Author Share Posted July 20, 2011 The value of the florin was not in the silver content as you imply, but in it's purchasing power as two shillings. When originally minted, the silver content was a small fraction of it's value as currency (unlike the situation with a gold sovereign for instance). So comparing in this way and suggesting a normal historical purchasing power for silver makes no sense to me. If that's true, why did they see fit to devalue the coin by reducing its silver content by half in 1920? Quote Link to comment Share on other sites More sharing options...
50sQuiff Posted July 20, 2011 Share Posted July 20, 2011 Perhaps the new gold thread calls for a chart of the day. Here's one for the top-callers, gold deflated by the pre-Clinton era CPI: Quote Link to comment Share on other sites More sharing options...
fexx Posted July 20, 2011 Share Posted July 20, 2011 I can't see what all the fuss is about with gold. If I lived on some remote island where the natives had their own system of money (feathers, paper, sticks, etc) then history clearly demonstrates what becomes of these systems. In this case, it would be wise to own gold (it has been used as money for thousands of years and still is today), particularly if there was only enough land to feed a fraction of that island's population. But I live in the UK, so how is that relevant? Quote Link to comment Share on other sites More sharing options...
Lepista Posted July 20, 2011 Author Share Posted July 20, 2011 I can't see what all the fuss is about with gold. If I lived on some remote island where the natives had their own system of money (feathers, paper, sticks, etc) then history clearly demonstrates what becomes of these systems. In this case, it would be wise to own gold (it has been used as money for thousands of years and still is today), particularly if there was only enough land to feed a fraction of that island's population. But I live in the UK, so how is that relevant? re-read your own post. I think you've answered your own question. Quote Link to comment Share on other sites More sharing options...
ccc Posted July 20, 2011 Share Posted July 20, 2011 BBC Breakfast had a special on it this morning. Even went to see some bloke smelting a gold ingot. Then had some bloke on talking about how to invest and then had bits with members of the public all talking about why to buy gold and how it will go up in value unlike anything else. Mmm...it certainly reminded me of something. Quote Link to comment Share on other sites More sharing options...
Erewhon Posted July 20, 2011 Share Posted July 20, 2011 I haven't noticed the following 71 page report being referenced on this site although it has many recent references on investor paid subscription sites. There is a link to download the report at the bottom of the box "General Information" Erste Group report on gold As I am looking to switch out of gold into property at some stage, I'd be very interested to hear criticisms of any aspect of this report. In video presentations on youtube, the author is only recommending 5 to 10% gold allocation which rules him out as a goldbug. I haven't located specific rebuttals of his analysis but haven't only used Google on public sites looking for such criticism. Quote Link to comment Share on other sites More sharing options...
Lagarde's Drift Posted July 20, 2011 Share Posted July 20, 2011 BBC Breakfast had a special on it this morning. Even went to see some bloke smelting a gold ingot. Then had some bloke on talking about how to invest and then had bits with members of the public all talking about why to buy gold and how it will go up in value unlike anything else. Mmm...it certainly reminded me of something. 2001? Quote Link to comment Share on other sites More sharing options...
roadtoruin Posted July 20, 2011 Share Posted July 20, 2011 If that's true, why did they see fit to devalue the coin by reducing its silver content by half in 1920? That supports my argument. A coin made of silver may be only worth half in silver the monetary value at the point when it is struck, but as time goes on the value of the silver content increases, whereas the (fixed, face value) purchasing power declines against inflation, so the coin becomes worth more as bullion. This would always be the case unless we had zero inflation, even happened recently with the copper content of 2p coins I believe exceeding the face value of the coin. Quote Link to comment Share on other sites More sharing options...
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