Gold: A picture says a thousand words

[Packerman]

From 1999 to today.

Gold Price.jpg

so its down 8% in 5 years, great investment

[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.

[David Vincent]

Organ, I've got a couple of questions for you about gold. Where do you hide yours and what is your address?

[Eric Cartman]

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'

[Organ Morgan.]

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?

[Eric Cartman]

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?

What good will gold do me in the apocalypse?

[Organ Morgan.]

Apocalypse, what apocalypse?

I suppose you have nothing to share, then?

I must say your forte appears to be submitting posts that are of no interest whatsoever. Are you Croesy's protege?

[Barry Dragon]

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?

Care to explain how gold just stays there. It fluctuates just as money does, it goes up and down in value AND it fluctuates at the same value to the value for USD. Your "picture" of words shows it fluctuates. Or are you simply saying its an inert metal?

Should we also invest our money in grain? That has gone up. Though its chemically active. An argentine holding an assets valued on the global market and it would have increased. That could be coal, flour, or even sheep, not just gold. Not sure exactly what your point is?

Is it that fluctuating currency can help investments, or more simply currencies fluctuate? Currencies fluctuations can help save an economy. It does have a potential "bomb" of inflation. But the idea is the economy can recover off a weakened currency and therefore an increase global competitiveness. Like we are seeing in the UK. Our goods are so cheap that our exports will be having a boom time.

[Wales-Bales]

so its down 8% in 5 years, great investment

How much is money down due to QE during the same period?

[Barry Dragon]

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:

[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?

[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.