This is no different to what happened this time last year....
Oil prices fell after Katrina and the price of gold softened.....
I would (and I am) use this time as an opportunity to buy more... at a good price. The three bullion dealers that I deal with all say that gold is undervalued currently.
Both oil and gold will be back up next year.
Investing in physical gold – discuss
Moderator: Peak Moderation
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PowerswitchClive
- Posts: 158
- Joined: 24 Nov 2005, 11:09
last week I opened an account with goldmoney.com. I am now sorting my bank account out to see if I can transfer any money into it!? This will involve looking at our finances on a day to day basis, still nothing wrong with that, in fact, alot right with it.
To answer the trust thing I think that the best way to solve the problem is to contact the company you want to deal with,(either personally, by phone or e-mail), read all the blurb they give you and keep asking questions (both to yourself and the company if you think its necessary)until you are satisfied you have the answers. If you have done all of the above and are still not sure, re-read everything you can find on the subject and go through the questions and answers thing again. Eventually, you will be able to satisfy yourself that you have the balance right and have the courage (I say this because this type of investment goes against everything you have probably been taught - however, just remember that millions of folks in the UK have borrowed huge sums of money and thought nothing of "investing" in bricks and mortar because the general belief is that it is a good investment).
Also, if you haven't done so already, sign up for dailyreckoning.co.uk, they talk alot about gold investment and how important they believe it will be as all fiat currencies begin to devalue. Remember, if you leave money lying around in a bank account earning silly little bits of interest you are allowing the system to literally rob you of it and hand it out to whom ever they see fit! It's one of the great ruses that governments have been able to use to their advantage since fractional reserve banking was introduced. DO NOT GET CAUGHT BY THAT CON.
To answer the trust thing I think that the best way to solve the problem is to contact the company you want to deal with,(either personally, by phone or e-mail), read all the blurb they give you and keep asking questions (both to yourself and the company if you think its necessary)until you are satisfied you have the answers. If you have done all of the above and are still not sure, re-read everything you can find on the subject and go through the questions and answers thing again. Eventually, you will be able to satisfy yourself that you have the balance right and have the courage (I say this because this type of investment goes against everything you have probably been taught - however, just remember that millions of folks in the UK have borrowed huge sums of money and thought nothing of "investing" in bricks and mortar because the general belief is that it is a good investment).
Also, if you haven't done so already, sign up for dailyreckoning.co.uk, they talk alot about gold investment and how important they believe it will be as all fiat currencies begin to devalue. Remember, if you leave money lying around in a bank account earning silly little bits of interest you are allowing the system to literally rob you of it and hand it out to whom ever they see fit! It's one of the great ruses that governments have been able to use to their advantage since fractional reserve banking was introduced. DO NOT GET CAUGHT BY THAT CON.
Some random comments:
1. I feel that ANY investment held as bytes on a computer, be it money or (virtual) gold" can easily be taken from you.
2. If I owned gold I would want the physical stuff within easy reach.
3. In a healthy economy I can't seeing the purpose of owning gold (physical or bytes) except as a traditional investment ... but you might as well invest in land or fish in that case.
4. In a collapsed economy I can't seeing the purpose of owning physical gold (the bytes version would have gone). For example, I can't really imagine successfully trading chunks of gold for say food. The food seller may not have any way of checking or valuing your gold ... I certainly have no idea how many kilos of beef a Krugerrand would buy ... and I couldn't recognise a fake or valid or "diluted" gold coin either. And even if I could ... I would realise that not many others could. In other words, each gold transaction would be accompanied by doubt and distrust. On top of that, once the locals realised that you might have gold you could expect a visit from the thugs with guns quite soon. Or your local "mayor" might decide that for the "common good" all key valuables such as gold should be collected up for the community treasury.
5. Gold MIGHT be useful in a partially collapsed economy such as Zimbabwe or Argentina ... but you will still have the exchange and security problems.
Fuel, firearms, razor blades, vitamin tablets might be a wiser route than gold as an exchnage medium. Everyone can recognise a gun ... or a bottle of vitamin pills. It's also much less likely that Sid The Knife will raid your house for a few packs of razor blades ...
I can also buy quite a few of these goodies for a few pounds from Aldi or Tescos.
A pack of razor blades could buy a meal - a straight forward simple low-stress low-risk transaction which you could repeat day after day.
I really would NOT like to do the same using gold coins.
1. I feel that ANY investment held as bytes on a computer, be it money or (virtual) gold" can easily be taken from you.
2. If I owned gold I would want the physical stuff within easy reach.
3. In a healthy economy I can't seeing the purpose of owning gold (physical or bytes) except as a traditional investment ... but you might as well invest in land or fish in that case.
4. In a collapsed economy I can't seeing the purpose of owning physical gold (the bytes version would have gone). For example, I can't really imagine successfully trading chunks of gold for say food. The food seller may not have any way of checking or valuing your gold ... I certainly have no idea how many kilos of beef a Krugerrand would buy ... and I couldn't recognise a fake or valid or "diluted" gold coin either. And even if I could ... I would realise that not many others could. In other words, each gold transaction would be accompanied by doubt and distrust. On top of that, once the locals realised that you might have gold you could expect a visit from the thugs with guns quite soon. Or your local "mayor" might decide that for the "common good" all key valuables such as gold should be collected up for the community treasury.
5. Gold MIGHT be useful in a partially collapsed economy such as Zimbabwe or Argentina ... but you will still have the exchange and security problems.
Fuel, firearms, razor blades, vitamin tablets might be a wiser route than gold as an exchnage medium. Everyone can recognise a gun ... or a bottle of vitamin pills. It's also much less likely that Sid The Knife will raid your house for a few packs of razor blades ...
I can also buy quite a few of these goodies for a few pounds from Aldi or Tescos.
A pack of razor blades could buy a meal - a straight forward simple low-stress low-risk transaction which you could repeat day after day.
I really would NOT like to do the same using gold coins.
Vortex
I agree to a large extent.
I propose to use the goldmoney.com account like a bank account NOW.
I am buying all sorts of little things when I go and do my shopping which I don't need now but think of as useful in times to come.
My friends laugh at me when they see all the paracetamol and Ibuprofen packets (carrier bags full which have been collected every time I go to the shop - I have chosen these two items as THE LAW only allows you to buy 2 of each a shop in case you commit suicide with them!) However, I got the last laugh and the first shock last week when I decided to up pop them and put them into jam jars (I also collect all my jam jars - freak or unique). Anyhow, when I took my two carrier bags of drugs and packaging and dis-assemble them, guess what, I have two jam jars (that used to hold pesto sauce) 2/3rd full - thats all!
Other favourites are potato peelers, candles, sanitory products (that causes much mirth).
But I say, its cheap and its fun.
P.S What are you collecting? and also, have you been on the goldmoney.com website yet?
P.P.S Also, this is the first time in my life when I can understand what a kick you can get out of collecting stuff - so, some people have houses full of china figurines, plates, shaving mugs, antique furniture, the latest dvds etc, it just so happens that my house is turning into a collectors house, full of old tools, legal drugs and toiletries, books on self sufficiency, horse tack .........
I agree to a large extent.
I propose to use the goldmoney.com account like a bank account NOW.
I am buying all sorts of little things when I go and do my shopping which I don't need now but think of as useful in times to come.
My friends laugh at me when they see all the paracetamol and Ibuprofen packets (carrier bags full which have been collected every time I go to the shop - I have chosen these two items as THE LAW only allows you to buy 2 of each a shop in case you commit suicide with them!) However, I got the last laugh and the first shock last week when I decided to up pop them and put them into jam jars (I also collect all my jam jars - freak or unique). Anyhow, when I took my two carrier bags of drugs and packaging and dis-assemble them, guess what, I have two jam jars (that used to hold pesto sauce) 2/3rd full - thats all!
Other favourites are potato peelers, candles, sanitory products (that causes much mirth).
But I say, its cheap and its fun.
P.S What are you collecting? and also, have you been on the goldmoney.com website yet?
P.P.S Also, this is the first time in my life when I can understand what a kick you can get out of collecting stuff - so, some people have houses full of china figurines, plates, shaving mugs, antique furniture, the latest dvds etc, it just so happens that my house is turning into a collectors house, full of old tools, legal drugs and toiletries, books on self sufficiency, horse tack .........
Oh my goodness!
I have just thought of a way around the law!
I haven't tested it out yet but I have a cash and carry card. When you go to cash and carry you obviously buy stuff in bulk.
I have seen paracetamol and ibuprofen there!!!!!!
I wonder, can I buy them in shrink wraps or are they sold individually too?
Surely they can't be!!!!!!!
I am definately off to the cash and carry some time this week to find out.
I have just thought of a way around the law!
I haven't tested it out yet but I have a cash and carry card. When you go to cash and carry you obviously buy stuff in bulk.
I have seen paracetamol and ibuprofen there!!!!!!
I wonder, can I buy them in shrink wraps or are they sold individually too?
Surely they can't be!!!!!!!
I am definately off to the cash and carry some time this week to find out.
To buy aspirin etc in bulk you need to go to a pharmacist and explain that you have illness X which requires that you take lots of pills, but you can't get into town often ... or that you are about to go away for several weeks up the DODGY TAX AVOIDERS or something.
If you don't look like a nutter you will be sold the pills. There is then no limit.
If you don't look like a nutter you will be sold the pills. There is then no limit.
Medications, vitamin pills, basic foodstuffs, canned foods, hand tools, nails, screws, those vital bits & bobs which you can't do without ... but which seem insignificant.What are you collecting?
What good is a generator or anything "obvious" if you stink like a ferret and have no soap or shampoo or anti-perspirant or toothpaste or loo paper?
I read once that in the 1929 crash men's suits and toothpaste still sold well ... people may have been broke but they were determined to show that they had not beeen defeated.
Later I plan to stock up on bike tyre inner tubes ..... 90%+ come from China, so they could become valuable.
Debasement of (gold and silver) coinage was always a problem throughout history.Vortex wrote:. The food seller may not have any way of checking or valuing your gold ... I certainly have no idea how many kilos of beef a Krugerrand would buy ... and I couldn't recognise a fake or valid or "diluted" gold coin either.
Certain medieval kings were prone to it, which lead to periods of considerable inflation.
Part of a monarch's claim to rule was their control of the royal mints.
If a coin had the king's head on it, it was a pledge of it's purity against
the King's reputation, which is why unofficial mints and forgers got the
chop (head from body) pretty quick. Gold has two key properties which
make it relatively easy to test for purity. It is one of the densest materials
this side of a neutron star, so a simple 'sovereign balance' with a slot the
size of a standard gold coin can be used to check the density and
hence purity. Very common in Victorian times. Since the only materials denser than gold are rarer and more expensive than gold, substitution of other metals with the same net density is not cost effective.
It is also a relatively inert metal, it will not tarnish in clean air at all. This leads to fairly simple
chemical tests that can be performed to check for debasement materials.
Testing the purity of gold and silver is still part of the duty of the official
mint and this trade will still be valuable in a PO world.
Just for fun, imagine you are one of the millions of people in this country that has borrowed money to invest in a house. Lets imagine for the sake of this example that you have borrowed ?100,000. At a rate of interest of 5% that costs you ?5,000 pa or ?416 per month. At the same time, a complete fool who has a house with no debt and obviously has no idea of what he is supposed to do, borrows a similar sum of ?100,000 against his house and invests it in gold.
What happens next surprises both people, as both of them (being bright obviously) expects their investment to increase thereby giving them a handsom return. However, shock horror, BOTH houses and gold deflate in value by 10%, meaning that both, on paper, are now worth ?90,000.
Lets call house purchase man - man A and gold purchase man - man B.
So, Man A and Man B now appear to be worse off. In reality it doesn't matter because neither Man A or Man B needs to sell so the whole excercise is only academic. (at this point please excuse my spelling as I can't be bothered to check this whole document against a dictionary).
Anyway, a terrible thing then happens, interest rates go up!. They go up to 6% so the monthly payments go from 5% to 6%, which doesn't sound much but is actually an increase from the original of 20%!!!!!!!!!!!!!! i.e the difference between 5 and 6 which is 1 divided by the original which is 5 multiplied by 100 or 1/5 x 100 is 20. The actual monthly cost in pounds increases from ?416 to ?499 (which incidentally happens to be a great selling price!!!!) How, if you don't really believe that the difference of 1% between 5 and 6 is 20% then just multiply 416 by 20% and press the + button on your calculator.
So now both A and B have to find an extra ?83 from earnt income. This isn't going to be easy for either of them. Both A and B have to cut spending on something. A chooses to cut spending on eating out and socialising and B is forced to reduce monthly bills, not spend so much time on the phone and stop using electric devices unnecessarily. Actually, you could swop the reductions round, they are personal choices only.
Catastrophy strikes! Gold AND house prices go down again by another 10% : now both house and gold are worth only ?81,000. Then double whammy, both mens wifes loose their jobs! Man A's wife works in the local sandwich bar and they have lost 10% of their customers who have decided since times are hard to make their own and Man B's wife works for a bank whose bosses have decided in their infinate wisdom to open new call centres in India to save money.
Again to keep things simple lets assume that both A and B take home ?2,000 a month and A and Bs wifes used to take home ?500 a month.
Man A has no alternative, as he can make no more cuts to monthly spending, than to let his mortgage debt accrue by ?500 a month. Man B decides to sell portions of gold at ?500 a month to pay off the interest due.
A year passes. There are no more catastrophies and no more changes to interest rates or values.
At the end of the year man A has a mortgage debt of ?106,000, a house, and no savings in the bank.
Man B has a mortgage debt of ?100,000 a house and ?75,000 in gold..................... now who wants to continue
Please, if you do, can I suggest that for the purpose of fully investigating this idea we continue for the time being with the above perameters.
What happens next surprises both people, as both of them (being bright obviously) expects their investment to increase thereby giving them a handsom return. However, shock horror, BOTH houses and gold deflate in value by 10%, meaning that both, on paper, are now worth ?90,000.
Lets call house purchase man - man A and gold purchase man - man B.
So, Man A and Man B now appear to be worse off. In reality it doesn't matter because neither Man A or Man B needs to sell so the whole excercise is only academic. (at this point please excuse my spelling as I can't be bothered to check this whole document against a dictionary).
Anyway, a terrible thing then happens, interest rates go up!. They go up to 6% so the monthly payments go from 5% to 6%, which doesn't sound much but is actually an increase from the original of 20%!!!!!!!!!!!!!! i.e the difference between 5 and 6 which is 1 divided by the original which is 5 multiplied by 100 or 1/5 x 100 is 20. The actual monthly cost in pounds increases from ?416 to ?499 (which incidentally happens to be a great selling price!!!!) How, if you don't really believe that the difference of 1% between 5 and 6 is 20% then just multiply 416 by 20% and press the + button on your calculator.
So now both A and B have to find an extra ?83 from earnt income. This isn't going to be easy for either of them. Both A and B have to cut spending on something. A chooses to cut spending on eating out and socialising and B is forced to reduce monthly bills, not spend so much time on the phone and stop using electric devices unnecessarily. Actually, you could swop the reductions round, they are personal choices only.
Catastrophy strikes! Gold AND house prices go down again by another 10% : now both house and gold are worth only ?81,000. Then double whammy, both mens wifes loose their jobs! Man A's wife works in the local sandwich bar and they have lost 10% of their customers who have decided since times are hard to make their own and Man B's wife works for a bank whose bosses have decided in their infinate wisdom to open new call centres in India to save money.
Again to keep things simple lets assume that both A and B take home ?2,000 a month and A and Bs wifes used to take home ?500 a month.
Man A has no alternative, as he can make no more cuts to monthly spending, than to let his mortgage debt accrue by ?500 a month. Man B decides to sell portions of gold at ?500 a month to pay off the interest due.
A year passes. There are no more catastrophies and no more changes to interest rates or values.
At the end of the year man A has a mortgage debt of ?106,000, a house, and no savings in the bank.
Man B has a mortgage debt of ?100,000 a house and ?75,000 in gold..................... now who wants to continue
Please, if you do, can I suggest that for the purpose of fully investigating this idea we continue for the time being with the above perameters.
I know it isn't fair. I think it's interesting to have a go at actually modelling what could happen. Maybe we could follow this example through and then do another? Would it be fair to start example 2 with Man A having a house worth ?200,000 and a mortgage of ?100,000 and man B having a house worth ?200,000 with an existing mortgage of ?50,000 who then borrows and extra ?50,000 against the house to invest in gold?
All just thoughts.
All just thoughts.