Take Me Back To London! Posted August 27, 2012 Share Posted August 27, 2012 (edited) What is your protection against a forced devaluation which is instant inflation. Clearly only nutters are 100% PM's but everyone should have it as part of their portfolio. What would be your portfolio allocation to gold and then other investments? What about those "nutters" who STRed and went 100% into cash? Edited August 28, 2012 by Take Me Back To London! Quote Link to comment Share on other sites More sharing options...
Take Me Back To London! Posted August 27, 2012 Share Posted August 27, 2012 I think this thread has been here before (numerous times) when it was pointed out gold was a real terms loser during the high inflation 80s. The only thing about gold and inflation is the total lack of correlation. At one point last year gold was 25% up year on year. It is what -20% plus year on year now? Not really following inflation is it? Interest rates were considerably higher in the 1980s and that made cash very attractive. Quote Link to comment Share on other sites More sharing options...
sign_of_the_times Posted August 27, 2012 Share Posted August 27, 2012 I think this thread has been here before (numerous times) when it was pointed out gold was a real terms loser during the high inflation 80s. The only thing about gold and inflation is the total lack of correlation. At one point last year gold was 25% up year on year. It is what -20% plus year on year now? Not really following inflation is it? Okay then, gold is a hedge against hyperinflation Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted August 27, 2012 Share Posted August 27, 2012 Silver ends the day on the magic 31. Ooh err. Quote Link to comment Share on other sites More sharing options...
JohnLennon Posted August 27, 2012 Share Posted August 27, 2012 Is the price of gold linked to inflation? No. What a cretinous statement to make Quote Link to comment Share on other sites More sharing options...
Injin Posted August 27, 2012 Share Posted August 27, 2012 What a cretinous statement to make Prove it by showing at least a correlation. Quote Link to comment Share on other sites More sharing options...
abroad Posted August 28, 2012 Share Posted August 28, 2012 What would be your portfolio allocation to gold and then other investments? What about those "nutters" who STRed and went 100% into cash? Each to their own, its not for me to say what is right for anyone percentage wise but having all your assets in a single asset class is risky. Anyone who was wholly 100% in cash has paid the price for lack of diversification by missing out on opportunity. They have also of course not taken quite as much risk. I own PM's but moving 100% into PM's at this level would seem to be extremely risky or do you disagree ? Quote Link to comment Share on other sites More sharing options...
DiggerUK Posted August 28, 2012 Share Posted August 28, 2012 (edited) What a cretinous statement to make Confusion will always enter these debates whilst RPI/CPI is classed as a measure of inflation. They are not measures of inflation, they are price indices, and only measure price rises. Inflation is the devaluation of the common currency. Prices do rise, but that just reflects the weakness of the currency. Price rises are a consequence of inflation, not the cause. The relationship between currency debasement, by printy printy, and the price of gold (pog), is reflected in the pog. I accept the pog is a barometer of inflation, others don't see it that way. Tough on them in my opinion. ..._ Edited August 28, 2012 by DiggerUK Quote Link to comment Share on other sites More sharing options...
Injin Posted August 28, 2012 Share Posted August 28, 2012 Confusion will always enter these debates whilst RPI/CPI is classed as a measure of inflation. They are not measures of inflation, they are price indices, and only measure price rises. Inflation is the devaluation of the common currency. Prices do rise, but that just reflects the weakness of the currency. Price rises are a consequence of inflation, not the cause. The relationship between currency debasement, by printy printy, and the price of gold (pog), is reflected in the pog. I accept the pog is a barometer of inflation, others don't see it that way. Tough on them in my opinion. ..._ Even if you accept that inflation is an increase in the money supply there still isn't a correlation between inflation and the price of gold. Quote Link to comment Share on other sites More sharing options...
warpig Posted August 28, 2012 Share Posted August 28, 2012 Of course there is, you just have to factor in interest rates as well. Even if you accept that inflation is an increase in the money supply there still isn't a correlation between inflation and the price of gold. Quote Link to comment Share on other sites More sharing options...
Injin Posted August 28, 2012 Share Posted August 28, 2012 Of course there is, you just have to factor in interest rates as well. Show me. Quote Link to comment Share on other sites More sharing options...
warpig Posted August 28, 2012 Share Posted August 28, 2012 What's to show. You know negative real interest rates stimulate gold sales. Show me. Quote Link to comment Share on other sites More sharing options...
Injin Posted August 28, 2012 Share Posted August 28, 2012 What's to show. You know negative real interest rates stimulate gold sales. Some evidence of a link between the POG and increases in the money supply. In your own time. Quote Link to comment Share on other sites More sharing options...
quibble Posted August 28, 2012 Share Posted August 28, 2012 Prove it by showing at least a correlation. Page 10 of https://www.credit-suisse.com/investment_banking/doc/cs_global_investment_returns_yearbook.pdf Quote Link to comment Share on other sites More sharing options...
Injin Posted August 28, 2012 Share Posted August 28, 2012 Page 10 of https://www.credit-suisse.com/investment_banking/doc/cs_global_investment_returns_yearbook.pdf So a 99% devaluation of the money supply is shown in the POG, where exactly? Quote Link to comment Share on other sites More sharing options...
warpig Posted August 28, 2012 Share Posted August 28, 2012 Are you disputing gold doesn't go up in value when the economy experiences negative real interest rates? Some evidence of a link between the POG and increases in the money supply. In your own time. Quote Link to comment Share on other sites More sharing options...
Injin Posted August 28, 2012 Share Posted August 28, 2012 Are you disputing gold doesn't go up in value when the economy experiences negative real interest rates? Nope, I am asking for evidence of it. Now, stop trying (pathetically) to reverse the burden of proof and show me something more than the chip on your shoulder. Quote Link to comment Share on other sites More sharing options...
quibble Posted August 28, 2012 Share Posted August 28, 2012 (edited) So a 99% devaluation of the money supply is shown in the POG, where exactly? Eh? I was answering your request in post #4187 - the one for a correlation. Edited August 28, 2012 by renewable Quote Link to comment Share on other sites More sharing options...
Injin Posted August 28, 2012 Share Posted August 28, 2012 Eh? I was answering your request in your 41,039th post - the one for a correlation. The price of gold goes down when the money supply goes up. k. Quote Link to comment Share on other sites More sharing options...
quibble Posted August 28, 2012 Share Posted August 28, 2012 So a 99% devaluation of the money supply is shown in the POG, where exactly? Apparently the price of gold in 1900 was $20, so today's price of $1670 seems to roughly show that. Quote Link to comment Share on other sites More sharing options...
warpig Posted August 28, 2012 Share Posted August 28, 2012 Why should I spend the next 2 hours collating data to produce graphs just to prove to you something that everyone else already accepts. It's your minority view, you prove it. Nope, I am asking for evidence of it. Now, stop trying (pathetically) to reverse the burden of proof and show me something more than the chip on your shoulder. Quote Link to comment Share on other sites More sharing options...
Injin Posted August 28, 2012 Share Posted August 28, 2012 Apparently the price of gold in 1900 was $20, so today's price of $1670 seems to roughly show that. Nope. Why should I spend the next 2 hours collating data to produce graphs just to prove to you something that everyone else already accepts. It's your minority view, you prove it. Why not instead spend two minutes, realise it's a load of cobblers you've just accepted as gospel without checking and admit you are wrong? Quote Link to comment Share on other sites More sharing options...
quibble Posted August 28, 2012 Share Posted August 28, 2012 Nope. I'm sorry - I had understood that when you said "devaluation of the money supply", you meant "99% loss in the purchasing power of money" - please correct my misunderstanding. Quote Link to comment Share on other sites More sharing options...
warpig Posted August 28, 2012 Share Posted August 28, 2012 If you've already worked out that I'm wrong, show me. Why not instead spend two minutes, realise it's a load of cobblers you've just accepted as gospel without checking and admit you are wrong?/quote] Quote Link to comment Share on other sites More sharing options...
Injin Posted August 28, 2012 Share Posted August 28, 2012 If you've already worked out that I'm wrong, show me. Again the pathetic attempt to reverse the burden of proof. Evidence for your claim please. Quote Link to comment Share on other sites More sharing options...
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