From 1999 to today.
Gold Price.jpg
| + Visit Cardiff FC for Latest News, Transfer Gossip, Fixtures and Match Results |
From 1999 to today.
Gold Price.jpg
so its down 8% in 5 years, great investmentOriginally Posted by Organ Morgan.
It's a simple picture to understand, or so I thought.
Stick with your depreciating fiat money. If you want to become poorer and poorer then jolly good luck. If you've been paying attention to what Junker and BoE officials have stated of late, which I somehow doubt (not when there's important Packers news to keep abreast of), then you're going to be much poorer still come the end of next March.
Organ, I've got a couple of questions for you about gold. Where do you hide yours and what is your address?
I don't think that phrase really applies to a picture of a table with words and numbers in.
I prefer the other, less recognised phrase - 'A picture of a table of words and numbers says as much as the words of numbers do'
Anyhow, Eric, as you likely know gold doesn't do anything, it always remains exactly the same. The value of currencies rise and fall against it. There's an old saying which goes something like: put 10% of your wealth into gold and hope it performs badly.
Physical gold is money and an insurance policy. From the picture you'll discern that an Argentinian who had converted 10% of his dough to gold at the turn of this century would be wealthier today than then despite the precipitous fall in the spending power of his 90% cash.
Have you any investment advice to share?
How much is money down due to QE during the same period?
Umm, that will still apply to gold. So money buys 20% less now than in 2008. But that still applies to gold. So down 8%, plus that value is worth 20% less.
So £1000 now buys £800 worth of goods, but £1000 of gold only buys £736 of goods.
:homer:
So if I had £20,000, and I bought £10,000 worth of gold and kept £10,000 in cash, fast forward to today and I would be able to buy more stuff with the cash?
You would be able to buy more stuff with the £10k cash than you would with the £10k worth of gold you purchased. Which if you exclude the exchange rate changes would be about a 1/4 less.
You would have done better buying £10k worth of dollars, that would now be worth £13,000 So buying cash in another currency would have been better than buying gold.
There is no way to be completely secure. Gold holds little extra benefit in holding cash.
With all this new found wealth maybe you could make a bet?
P.S. What's the relevance of 1999 when you've been tipping it since 2011. I'd guess property in that time has increased about 30%, you'd might as well burn your money.
And why do you think Argentinian currency has collapsed?
Could it be because there is no enough money? So your fiat money, or lack of, it what has caused the collapse! Shame you can eat Gold
Last edited by Barry Dragon; 18-10-16 at 08:20.
What is money? Or, what should money be? I reckon most people would say it should be a means of exchange and a store of wealth. It's accepted as payment because a receiver know they can pass it on to someone else as payment for goods or services. It works for as long as people have that confidence. The world's been on a purely fiat money system (not backed with precious metals) since 1971. Coincidentally, or not, that's when government spending and debts and inflation begun to spiral because then there was no limit to how much money could be created as no-one could visit a bank to redeem their paper money for gold or silver.
Here's an example. In 1971 in the UK a single person's basic state pension was £6 per week. Today it's around £115 as it increased each year with the official inflation rate. Put another way, £115 pound today has the spending power of £6 45 years ago. Alternatively, someone who placed £115 under a mattress then would still have £115 but it would have lost 95% of its spending power. An ounce of gold priced in pounds averaged £39 in 1971. At yesterday's close, that same ounce was worth £1,030. Do the math, as the Yanks say.
That is true for everything. cash money, gold Tulips. Its not just cash money.
Case in example. GBP Sterling and US Dollar. Hold $100,000 under your mattress back in 2006 and it was worth a mere £50,000 now its worth £80,000. Your example is just as weak as currency.
If india did not have an appetite for gold, or our phones didnt need gold, then gold could easily be worth $400 an ounce or less. Gold is not subject any less risk than cash money. Why do you think its void of the same risks?
Is gold not just another case of the Netherlands Tulips? Arguably there is more of a finite resource of gold, but there is still many many many tonnes of gold in the ground to be extracted.
Holding cash money under your bed might lose its value, but if you held a tonne of tulips under your mattress from 1600 your fortune is now worth a tenna.
Just because demand for gold has increased faster than its supply causing a price increase does not make it any different to the value of the dollar increasing. Its the same principle. And both values can fall. The value of an asset changes, just like money does.
And if you held that £39 gold as cash, in an account that pays inflation level of interest it could now be worth £25,647.96.
Pensions have not necessarily raised inline with inflation btw.
Go figure, you will see the maths and the math show that money earning interest is better than gold!
Source: http://www.thisismoney.co.uk/money/b...nged-1900.html
Last edited by Barry Dragon; 18-10-16 at 10:07.
Ignore that. My maths isnt working. But the post above is still right.
There's only a finite amount of gold. I think there's circa 180,000 tonnes above ground. Most of it is in private hands in the form of jewellery. That equals less than one ounce per person alive today. Something like 2,500 new tonnes of the stuff is mined annually.
I didn't state gold carries no risk. Why make that bit up?
The point I've been making is that gold has been a stable store of value for thousands of years, and it cannot be printed. It has never been worth nothing. But scores of paper currencies have become worthless.
[QUOTE=Organ Morgan.;4685990]There's only a finite amount of gold. I think there's circa 180,000 tonnes above ground. Most of it is in private hands in the form of jewellery. That equals less than one ounce per person alive today. Something like 2,500 new tonnes of the stuff is mined annually.
I didn't state gold carries no risk. Why make that bit up?
The point I've been making is that gold has been a stable store of value for thousands of years, and it cannot be printed. It has never been worth nothing. But scores of paper currencies have become worthless.[/QUOTE
Are you on commission for cash4gold?? 😃
Any prudent homeowner takes out an insurance policy on their property in case it burns down or suffers some other calamity. Putting 10% of one's dough into gold works the same way except the insurance can be redeemed one day: it's not dead money.
What if your house burns down that first year? You've got a £300 lump of gold to build a £200k house with. Good luck getting a builder to do that.
You was right in a way in your earlier post about interest. The reason why people become money lenders with their interest bearing accounts is not down to greed but because they're battling inflation and trying not to become poorer in real terms. That's down to cash being a terrible store of wealth, by design. Inflation doesn't just happen like changes in the weather, it's made to happen to extract wealth, and most of what's extracted is gathered by a tiny elite, the so-called 1%.
Organ you ask "What is money". I'm glad you asked that question. It is just rubbish. In fact, the best thing you can do is collect all your money and post it to me and I will throw it in the bin for you. I would also like to remind you that you still haven't told me where you have hidden your gold.
By the way, whatever the official inflation rate is I can tell you that £6 in 1971 went a lot further than £115 today. In 1971 you could buy an Xbox for thrupence.
The shiny's buried a foot deep beneath a bolder on a remote mountainside. Folding stuff is secreted at several locations, most of it is inside a drystone wall.
I agree about £115 having less spending power than £6 in 1971. Successive governments routinely manipulated CPI lower in order to cheat people on fixed incomes. I stated in a recent post that the state's our greatest enemy who will strip us more of our wealth than any burglar, mugger or former spouse ever will to hand it to their big business chums. Some of these corporations spend more on lobbyists than they pay in tax.
That's interesting. I like to spend my weekends metal detecting on remote mountainsides. I'll have a look out for recently moved boulders. Now that the gold craze is catching on I imagine that metal detectors are de rigueur for your common or garden burglar.
I've invested in a few things that most people would look at as junk. At first glance they would not be seen as valuable. I don't want to say what these things are on here because some of our posters seem a bit dodgy. You know the ones I mean.
Posting Permissions
Reply With Quote