Gold: A picture says a thousand words

[Organ Morgan.]

Ignore that. My maths isnt working. But the post above is still right.

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%.

[TruBlue]

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.

[CardiffIrish2]

[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?? 😃

[Wales-Bales]

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?

[Mrs Steve R]

Are you on commission for cash4gold?? 

They collected all the gold up ages ago

[David Vincent]

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.

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.

[Barry Dragon]

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.

[Organ Morgan.]

Any sensible person spreads the risk. A bit here and a bit there. Of course, it doesn't apply to a person who lives from one week or month's pay to the next as they have f all to spread.

[Organ Morgan.]

Inflation up to 1% today and likely to be going up each quarter if the £ stays as low as it is (seeing as we have to import certain goods in order to make things - unless we can find the same products within UK - there isnt much we can do)

But I digress - if you £10,000 and you want that investment to grow at least a few % above inflation - where would you stick yours ?

Stocks n Shares, Bonds, Gold, ForEx, Bricks and Mortar - or somewhere else ?

We're all waiting with baited breath for dear old Eric to answer that enigma. But he's gone AWOL.

[Organ Morgan.]

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.

[Eric Cartman]

We're all waiting with baited breath for dear old Eric to answer that enigma. But he's gone AWOL.

Do whatever Organ says because he clearly has this shit sorted and is definitely not just the town drunk.

[David Vincent]

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.

[Organ Morgan.]

I used to be a metal detectorist as it happens, many moons ago. Unearthed lots of interesting and some valuable stuff in farmers' fields in Cowbridge. Romans loved to drop and bury coins, though my first good find was a 1696 William III shilling that was an inch below the surface in a field that had been scoured for years prior.