PowerSwitch

I have perhaps £2000 in a bank account that I probably don't need. Current rates of interest are rubbish and I was wondering what the consensus was about buying some gold, especially in the run up to Brexit next spring.
Thoughts?

boisdevie wrote:I have perhaps £2000 in a bank account that I probably don't need. Current rates of interest are rubbish and I was wondering what the consensus was about buying some gold, especially in the run up to Brexit next spring.
Thoughts?

I don't know?? Imagine that.
You can get 3% on US T bills pretty much risk free and gold has been stagnant for quite a while now.
Of course it depends on what your position in life is at the moment. If you are young and single with a job, £2000 might be best spent wining and dining the most beautiful young woman you can find, but if you are near retirement age you might want to take the grand kids on a camping vacation.

Bank of England said pound would drop 25% under no deal Brexit. Gold might be a hedge against the pound.

3 questions. How far off retirement are you? Have you made sufficient contributions for a full state pension? Do you live in the UK?

IMO, gold should be considered as a disaster prep or as insurance against an uncertain future, and NOT as an investment.

Gold pays no interest or dividend, and you have to either pay to insure it or to accept the small but real risk of loss by fire, theft or other mishap.

In the very long term, gold has roughly held its value for centuries, but in the near term it may go up or down relative to paper money.

A better use of £2,000 IMHO, would to buy stocks of useful goods.
this is more likely to be useful in the future and may save your life in an emergency.

£500 on clothing, footwear, and bedding.
Spare duvet, sheets.------------------£100
Spare overcoat------------------------£100
Spare pair shoes and boots-----------£100
Spare shirts, pullover and trousers---£100
Underwear and socks-------------------£100

£500 on fuel and related supplies
Jerry cans and fill with petrol---------£100
Coal or logs, if you use same---------£200
Candles---------------------------------£50
Batteries--------------------------------£50
Paraffin ---------------------------------£100

£500 on food, divide between.
£250 on doomfood
£250 on extra stocks of what you use regularly.

£500 on camping and survival supplies.
5 hurricane lamps and spare parts-----------------------£100
2 battery lanterns, 4 pocket torches, 1 powerful torch---£100
Camping stove, tent, sleeping bags------------------------£200
Water filter, chlorine tablets, test papers------------------£100

Almost all the above are either items that you can use regularly and replace out of your usual housekeeping budget, or are items with a long shelf life, so the £2,000 is almost "one off" expense.


If however you already hold reasonable doom stocks, then gold may be a useful addition.

You always need money. Never waste it. Do a monthly financial audit and record what you spend on different categories.

You could invest in overseas shares in either US or European companies. Then if the pound falls you 'should' keep some of your value.

If you own a house you could invest in insulation or double glazing.

If you have a car then you could get small quantities of fuel. Ditto what Adam says about the preparations.

In the event of a 'hard' Brexit then interest rates could go up to make the pound attractive. It may be a cause of a run on banks so perhaps some 'furrein' currency could be worth investing in. Personally I would always have a bit of cash in pounds, euros and US dollars under the bed.

clv101 wrote:Bank of England said pound would drop 25% under no deal Brexit. Gold might be a hedge against the pound.

That won't make a huge difference unless you want to spend the money abroad. Even if it does drop that much it will probably come back up again in a year or so. The BOE is heavily investing in Project Fear at the moment. It sounds even more hysterical than it did before the referendum itself and most of that turned out to be untruths or at most very short term setbacks.

kenneal - lagger wrote:That won't make a huge difference unless you want to spend the money abroad.

Eh? We spend money 'abroad' every day. Imported energy, food, clothes, IT etc...

emordnilap wrote:3 questions. How far off retirement are you? Have you made sufficient contributions for a full state pension? Do you live in the UK?

I'm 54 but only expect to get basic state pension. Will probably inherit at least 150k in ten years time. Yep, live in UK.

The increase in cost related to purchases made abroad will be a relatively minor increase. A 25% drop in the purchasing power of the pound abroad will not result in a 25% increase in costs at the shop. Any way it would only be a temporary drop as happened after the Brexit vote. More Project Fear!

More worrying than Brexit is the fact that skirt lengths are increasing. When the skirt goes up so does the stock market and when it goes down the stock market follows. It's quite a reliable indicator or as reliable as any other indicator according to Money Morning's , Merryn Somerset Webb.

boisdevie wrote:

emordnilap wrote:3 questions. How far off retirement are you? Have you made sufficient contributions for a full state pension? Do you live in the UK?

I'm 54 but only expect to get basic state pension. Will probably inherit at least 150k in ten years time. Yep, live in UK.

Is the 'basic' UK state pension different to a 'full' one?

It might all be irrelevant if this is true.

There are discussions about solar flares elsewhere on this board which agree that they are probable but leave open the degree of damage, in this country anyway, as we have markedly shorter power lines than in the US and Canada.

If there is damage it is likely to be long term as large numbers of transformers would be knocked out and they are not "off the shelf" items and would have to be constructed specially for each application and there are thousands of them in this country alone. How to construct them with no grid power is an interesting problem.

boisdevie wrote:I have perhaps £2000 in a bank account that I probably don't need. Current rates of interest are rubbish and I was wondering what the consensus was about buying some gold, especially in the run up to Brexit next spring.
Thoughts?

Very difficult to know what to do when we don't know how the brexit epic is going to end. A no deal might well send gold skyrocketing compared to sterling.