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OK, assuming that a major financial crisis is around the corner and that gold is the safest thing to be in... do you invest in having gold coins under your mattress or do you invest in companies that allow you to buy gold shares?

Surely, the former is the best option in a crisis as you physically have the gold whilst the latter, after all, is still a piece of paper saying that you own X gold shares?

Or am I missing something fundamental?

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Dr Bubb,

In your examples above, you'd have been better buying the metal over the last two years. Stocks have done sod-all in that time. Whereas, it was the other way around in 2001-2003. So how can you really know which is best?

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OK, assuming that a major financial crisis is around the corner and that gold is the safest thing to be in... do you invest in having gold coins under your mattress or do you invest in companies that allow you to buy gold shares?

Surely, the former is the best option in a crisis as you physically have the gold whilst the latter, after all, is still a piece of paper saying that you own X gold shares?

Or am I missing something fundamental?

There isn't going to be a financial crisis so severe you would actually need to dig your gold coins out from under the mattress. Whatever happens, there will be a (probably sick) banking system, Police, civil service etc etc. Britain is a deeply orderly country and will not descend into mass anarchy under any realistic scenario.

Bullion coins are simple to buy and cost nothing to keep (or next to nothing). E-Gold involves banking transaction costs, awkward transfers and holding costs that are material (£30 per transfer, 1%/annum holding costs), plus the Internet is not as secure as physical receipt. Do not get bullion delivered to your home address. Get it delivered to your office or some other intermediate address.

You can also buy an ETF that follows physical gold. Again, there are transaction costs.

Incidentally, buying Canadian dollar travellers' checks is a very simple way of getting out of Sterling into a far more powerful currency. CAD are more secure than CHFr in my view. CAD are backed by actual physical assets, CHFr by a bunch of gnomes only. You can keep Amex as long as you like, plus no problems with security as with bullion coins.

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Following a comparison between, Goldcorp, one of the best major Gold shares, and the price of gold, since Gold bottomed in 2001:

Tell me, why did Gold bottom out in 2001. Many people say Gold goes up when everything else goes down and 2001 was around the time of the dot com bust?

Thanks

Edited by Sparker

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A lot of people seem to be getting on the gold-bandwagon, is this another road to over-valuation? How volatile are gold stocks? From the contrarian point of view, would you not be positioning yourself to get out of gold as soon as the BBC is banging on about it?

Edit: p.s Im extremely new to the area, so pardon my ignorance.

Edited by bob monkhouse

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A lot of people seem to be getting on the gold-bandwagon, is this another road to over-valuation? How volatile are gold stocks? From the contrarian point of view, would you not be positioning yourself to get out of gold as soon as the BBC is banging on about it?

Edit: p.s Im extremely new to the area, so pardon my ignorance.

A lot of people ON HERE seem to be getting in the action. but a study of the history of money and the printing press shows that gold IS the real money. and for that reason you should convert your promises (banknotes) into money at a favorable rate. todays "money" is a confidence trick as the housing market shows.

hisorically gold is undervalued

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A lot of people seem to be getting on the gold-bandwagon, is this another road to over-valuation? How volatile are gold stocks? From the contrarian point of view, would you not be positioning yourself to get out of gold as soon as the BBC is banging on about it?

Edit: p.s Im extremely new to the area, so pardon my ignorance.

sure,a lot of people in this forum ARE getting on the gold bandwagon.Ask yourself,how many of your associates have spotted it yet,or are they still bleating on about property and yields???

the time sentiment changes for any market,bullish or bearish,is when your colleagues,friends,drinking buddies are all talking about subject x.Even though they don't really have knowledge of it.

I know a bit about gold from an electronics perspective....aside from the jewellry uses it has it is very widely used in telecom components.

You are right to a degree about positioning for the exit when the media get involved,but,just like property,it will start small and then become an all-encompassing phenomenon and get-rich-quick scheme i the next few years.

p.s. it might NOT be gold that is the next bubble......GM food(monsanto) and pharma's(Bird flu) could be equally good candidates,just need a following wind....and a reversal of sentiment.

GM food might be a really good one if bird flu stops global food shipments to tesco and the like being so easy.......I might have a punt.

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Britain is a deeply orderly country and will not descend into mass anarchy under any realistic scenario.

That may have been true a century ago, but today Britain is three meals (or one dole cheque) away from a revolution.

Not that I think it's likely in the short term, but if the global realignment of living standards is as bad as it could be, I wouldn't be surprised to see 'mass anarchy' here in a decade or two.

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That may have been true a century ago, but today Britain is three meals (or one dole cheque) away from a revolution.

Not that I think it's likely in the short term, but if the global realignment of living standards is as bad as it could be, I wouldn't be surprised to see 'mass anarchy' here in a decade or two.

I think you are right Mark - too many people think the western society is a naturally ordered society - it is not.

What people forget is that most of of pre war policies e.g welfare state, human rights, equality legislation, union/pay bargaining etc was never put in place for charitable reasons or to make people feel a 'little better'. It was put in place to prevent civil unrest and promote social cohesion that would limit the chances of civil unrest in the future.

When people on this site start banging on about social security scroungers/penions/the welfare state etc they would do well to remember that this may be the only thing standing between order and civil unrest in the not too distant future.

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I think you are right Mark - too many people think the western society is a naturally ordered society - it is not.

What people forget is that most of of pre war policies e.g welfare state, human rights, equality legislation, union/pay bargaining etc was never put in place for charitable reasons or to make people feel a 'little better'. It was put in place to prevent civil unrest and promote social cohesion that would limit the chances of civil unrest in the future.

When people on this site start banging on about social security scroungers/penions/the welfare state etc they would do well to remember that this may be the only thing standing between order and civil unrest in the not too distant future.

....nope.most of us know only too well that once something has been a way of life for long enough,people just take it for granted that it will remain that way.

rising hp's,welfare state,nhs...all case in point.

for 70% of the world the equation is simple...if you don't work you don't eat.

...maybe a few of our chavs need reminding.

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  • 301 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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