Investing in physical gold – discuss

acrowe · Post by **acrowe** » 13 Jan 2006, 11:53

Joe is right, timing is key. If you have savings of some sort or another, surely it?s wise to look at the best place to store them given your views on PO.

While I agree with snow hope (the name clearly expressing his view hehe) that things could get extremely bad, excluding a nuclear war there is very little risk everything will collapse at such a rate as to render gold worthless. It seems to me that the instant collapse ideas are only possible if we suddenly had no oil, which as everyone knows is not a result of PO.

Having said that, I will personally be looking into buying useful things to help me live in a post peak world as well as moving my saving and assets (and trying to move that of my family and friends) into things I think will hold or increase their value.

Joe also makes a good point about being able to purchase land. Land ownership will be the most important asset you can own in the future, and as a result anything you can do which will allow you to have purchasing power in the future can only be a plus.

I think taking a broad and mixed view is the best course of action, cover a number of outcomes.

Ballard · Post by **Ballard** » 13 Jan 2006, 13:24

Absolutely,

Diversity is the key, Yes buy some real physical gold (as an insurance against unknown events), get mortgage income protection (It my end up being a waste of money, but it also may work in the short term). Buy woodland if possible, even a small amount could prove valuable. Get useful tools and kit, a good set of garden tools can go a long way towards providing additional food. Surround yourself with friendly neighbours, the list goes on.

On its own gold may be useless, however as part of a greater plan anticipating an unknown future it is an important ingredient in preparations for the future.

Post by **mikepepler** » 13 Jan 2006, 14:12

acrowe wrote:Having said that, I will personally be looking into buying useful things to help me live in a post peak world as well as moving my saving and assets (and trying to move that of my family and friends) into things I think will hold or increase their value.

This is my chosen option too. We've been spending money on things like:
- converting car to run on veg oil
- buying a couple of decent new bikes, plus tools and spares
- getting hold of (non-powered) tools for gardening and woodwork
- buying an expensive water pump/filter
- buying various wood-burning camping stoves, etc.

I guess the list would be different if we owned a house instead of renting, but on the other hand I'm glad not to be saddled down witha large debt, and able to move on short notice if I need to.

caspian · Post by **caspian** » 19 Jan 2006, 13:27

I'd be wary of investing heavily in land. Although its value is sure to rise in the short term, if things get really out of hand I would expect the Government to start expropriating privately owned land and redistributing it. Think Zimbabwe. In this situation, I doubt very much that the owner of the land would be compensated.

Blue Peter · Post by **Blue Peter** » 19 Jan 2006, 13:49

caspian wrote:I'd be wary of investing heavily in land. Although its value is sure to rise in the short term, if things get really out of hand I would expect the Government to start expropriating privately owned land and redistributing it. Think Zimbabwe. In this situation, I doubt very much that the owner of the land would be compensated.

I think that there is a worry on this score, but I think that most people here are talking about a small-holding of only a few acres (to live and work on, not as an investment as such). Obviously such land could be appropriated, but it might be a bit pointless because, then you'd have to appropriate more land for the family which you'd just de-housed.

Anyway, there would be all the big landowners (aristos, Church, etc.) to go for first,

Peter.

Joules · Post by **Joules** » 20 Jan 2006, 09:54

Joules wrote: Although you'd probably have to set up an account, or visit their premises in person, fine gold bullion bars (exempt from VAT just like the better known coins) can be bought from Cooksons: http://www.cooksongold.com/indexgb.html in denominations as small as 10g.

Joules wrote: If you're in London, Birmingham etc. you can buy and sell gold over the counter at the various bullion dealers.

I just heard yesterday that Cooksons are closing their London office and trade counter, so a personal visit there will only be possible for the next couple of weeks or so.

DamianB · Post by **DamianB** » 27 Jan 2006, 23:47

..And all the while gold and silver are giving prospective buyers one of the sneakiest bull market demonstrations that I've ever witnessed in this business. It runs like this --

"Wait, don't buy gold yet, the gold stocks are not confirming the metal."

"Hold it, don't buy gold yet, silver isn't confirming."

"Stand back, gold is overbought. You'll buy it below 500 in a few months."

"No hurry, the gold-silver ratio is telling us that the whole precious metal situation is on dangerous grounds."

"Not yet, Newmont, the leading gold stock, is failing to go to new highs."

"Sell your gold, the metal is up on a stilt formation -- this is dangerous."

"Stand back, gold and silver haven't corrected for weeks, and the angle of ascent is too steep."

"No, no, the Commercials have increased their short positions. There's a big downer coming in gold and silver."

You see, this mighty bull market in the precious metals has been giving prospective buyers the old "flim-flam" act all along. The bull market has used every device known to man and the markets to keep the public and the funds and the pros out of gold and silver.

http://www.321gold.com/editorials/russe ... 12606.html

wayne72 · Post by **wayne72** » 28 Jan 2006, 02:54

If I had the money i'd invest in fresh water, fresh water is the Gold of the desert!!

Bandidoz · Post by **Bandidoz** » 28 Jan 2006, 04:58

Some interesting graphs:

http://www.gold-eagle.com/analysis_98/j ... 50598.html

http://www.investmenttools.com/futures/ ... t_gold.htm

grinu · Post by **grinu** » 02 Feb 2006, 20:21

There will always be portable forms of wealth - it's been that way for centuries, whether it's pieces of metal, jewellry, beans, bulbs etc...

Gold has been a precious metal for thousands of years - since before the discovery of oil etc., so I don't understand why it would suddenly stop being of value due to hardship.

Fair enough, you can't eat it, but if you need to run away from your home tomorrow, you aren't exactly going to be able to carry a truckload of seeds, solar panels, bicycles etc. with you, are you?

Something that is recognised internationally as being of value, easy to weigh, check quality, dense, has all the malleability properties, does not corrode etc. etc. surely has to be one of the most universal ways of carrying wealth for bartering etc.

SILVERHARP2 · Post by **SILVERHARP2** » 14 Feb 2006, 17:36

I believe the first effects of Peak oil will be financial, people only borrow because they are confident of the future, you don?t have to be a genius to work out what happens in reverse, I have started converting my savings into gold (after paying down debts). Investments like long dated bonds will drop in value, funny how the US has just started to issue 30 year bonds again. Pension funds will be hammered, it doesn?t matter if the effects are inflationary or deflationary, although logic would say gold would do better during inflation but who knows this time around as there is so much money tied up in bonds and derivatives etc. only a small amount chasing gold would multiply it?s value., the point is that all financial premiums will disappear (including property). So I guess if you have a mortgage start trying to pay it off early and buy a little gold, if you don?t have any debts, start saving in gold, either way you will have purchasing power when other will not, it will also stop the tax authorities from taxing your savings or interest. I can?t bring myself to sell my house now but I feel I am suitably hedged to take advantage whatever way things turn out. My view is that the effects of PO will take several years before everyone believes it, I could see initial shortages being blamed on weather, politics etc, a strong recession in the US or China could reduce demand and thus defer the effects for several years. From a UK position given that North Sea oil revenue will drop over the coming years means that sterling is vulnerable, so even if Peak oil doesn?t happen you are hedged.

andyh · Post by **andyh** » 19 Feb 2006, 09:29

Well I've gone and bought some of the physical stuff as part of our portfolio diversification. It wasnt that simple, the bullion company require cash or bank drafts here, and they tend to regard you with suspicion till they see the colour of your cash. However now they are all chummy (it twas ever thus). I bought into what I hope was the recent retrace last week, and will buy 2 more tranches to take the value up to about 3% of our portfolio before the year is out. I will add as the situation develops thereafter. It was more cash effective to buy bullion bars rather than coins. There is no GST (VAT) on gold and no capital gains tax on any gain in NZ which is nice. The agent thought I would be watching the price every day in order to sell it back in a few months - I had to explain I regard it as a rather longer term strategy. There is of course no interest on gold and you have to pay for safe storeage, so there are drawbacks. However I do feel it is a worthwhile diversification - particularly as it is also a hedge on the NZ$ falling against the US$ (which looks very very likely). Next on the list is a property, but the market here is definitely turning so we will play the long waiting game........

SILVERHARP2 · Post by **SILVERHARP2** » 20 Feb 2006, 13:16

Just as a tip but take with a pinch of salt, hold off buying more gold until it drops below $500 , I belive the Fed has to keep raising rates until they hit the commodity markets

andyh · Post by **andyh** » 20 Feb 2006, 18:47

If the Fed are having to raise rates beyond what was thought likely its because the inflation genie is out of the bottle (indeed those last lot of US input prices suggest this most strongly). Gold prospers in an inflationary environment (or so its said).......

Bandidoz · Post by **Bandidoz** » 21 Feb 2006, 18:08

http://www.ameinfo.com/77823.html

Is this the last great buying opportunity for gold?
Those who predicted that gold would suffer a sell-off at $500 an ounce were proven hopelessly wrong in the first seven weeks of 2006. The yellow metal has soared past the $570 barrier and its present retreat to above $540 an ounce is probably the last great buying opportunity before prices head to much higher levels.

Clearly some of the huge liquidity of the world is being parked in gold whether in ETFs or gold companies. Investors are seeking protection from inflation and a safe haven immune from the vagaries of stock markets and bonds.

They are worried that the global financial system has created too much credit which has eroded the pricing of risk, setting capital markets up for a crunch period, or stock market crash in more bold terms. They are worried that high oil prices are a ticking bomb under consumer price inflation figures, and note with alarm rising costs of production.

Investment logic
They also find no compelling argument to buy real estate at current price levels, and so by default gold becomes the asset class of choice. They are worried that Iran will spark a new oil shock, or some other geopolitical fault line will crack. And the more investors that make this leap of logic, the higher the price of gold will go.

The general buying public, and even most of the financial community, just have not twigged what is going on yet. When they do, and it may take just one 'unexpected event' to make them wake-up, then everyone will want to own gold again and the price will soar way beyond anything imaginable today.