allyjcambo

I am in a similar situation regarding my parents savings, they have a reasonable cash stash........fooken idiots have it all with various banks though (they have lost a fortune on shares also) A lifetimes savings will be all but wasted. The cause:

 

pure ignorance

 

I warned them continously every month for the last 1-2 years, the warnings varied in urgency obviously.

Me too, GOM.

My father in particular will not listen. He’s just retired and has decent cash savings. Like your folks he has spread these around various banks which of course completely misses the point of what I keep trying to tell him: forget about the £50,000 guarantee, you’ll get all your money back but it will (has already) lost a huge part of its purchasing power. That said, as HPC Sucks says, it’s his money and he’s free to do what he wants. I have said to him that if he’s not interested in gold or other sterling hedges then he can at least spend it while it is still worth something. He’s of a thrifty Scottish background and so is reluctant to spend but when I suggested that he would be supporting his community by using local business that seemed to appeal to him.

Times like these really bring home how disastrous Labour has been for our economy. Irrespective of whether or not inflation takes hold it is guys like my Dad who have worked hard and saved all their life who stand to lose the most. Either we have rampant inflation and/or the GBP continues its descent. Either way, the money sitting in the bank is losing value by the day. If I recommended to him a share whose prospects were a fall in capital value together with a falling (soon to be zero) dividend (i.e. interest rate) he’d tell me to get lost. And yet he continues with the pound.

Clearly I need to try harder!

Gold still seems like an exotic speculative investment to him when to most here on GEI it is the opposite.

So was that surge on news about Citigroup? I must say that was quite exciting. Puts me into a notional profit. Not that I'm selling of course.

Just checked my BV account, it was already doing well in GBP this week but it’s taken a serious turn for the better within the last 20 mins.

Hmmmm. OK, so the site was down for a bit, but my gold is still physically present in the vault. There is not the equivalent of a run on the bank with allocated gold.

 

I do like the idea of physically holding some gold (esp. for late-night "my precious" moments) but if I need to sell (which I will do when I find a house I want to live in) then BV is a lot more liquid than holding physical at home. I guess the physical at home argument will really come into play if it all goes completely pear-shaped, in which case I might have to go to plan B (escape to Switzerland).

 

The BV site is definitely slow this afternoon. I'm hoping its because it is swamped with buy orders...

Agreed. The liquidity issue is why I’m in BV rather than physical in my hands. I understand where people are coming from in terms of having your gold on you but if, as you say, it goes pear shaped I don’t think physical gold in your possession will be any more use (probably less in fact) than having cartons of ciggies and booze to trade.

Yep, roll away all the charts. Close the site down. Sell up all that useless metal you have lying about. Party's over.

If, like me, you’ve only been in PMs for the last 12 months or so it’s not been much of a party. Although to be fair, it’s been no write off either.

P.S. the smily faces are meant to be "(B)s" !

 

P.P.S smily faces do not want to go away. F&ckers.

They're supposed to be "b"

This is an extract from an email I just sent a mate who was asking me what I thought about what's going on. It borrows on many of the ideas (a) posted here and ( spouted by the likes of Rogers, Turk, Bonner and the rest. So nothing original, but it reflects my take on events. Very happy to be contradicted though if people disagree...

 

"History (e.g. 1930's depression, 1989 Nikkei collapse) tells you that all these band aids [a Roger's term] which Paulson, Brown et al continue to apply will ultimately make things worse not better. At the moment the vast sums of new money are being hoarded by the banks hence why we're seeing deflation on a mass scale. But history also tells you that at some point this money will show up in the economy and at that point expect (a) massive inflation particularly in cost of living items (where leverage is far less prevalent) and ( interest rates (esp. the US 30 year bond) to sky-rocket. Gold is trading (and I think will continue to trade) in the $750-$950 range for the foreseable future. In some ways it has done well (i.e. a whole lot better than other commodities and other asset classes) because it is viewed as money and so is less vulnerable to recessionary fears relating to the real economy. On the other hand, it has disappointed somewhat too because it's movements have not convincingly reflected its reputation as a safe haven 'no counter-party risk' asset class. I will continue though to buy gold on the dips, not so much because I'm bullish on it but more because I'm bearish on almost everything else. "

P.S. the smily faces are meant to be "(B)s" !

This is an extract from an email I just sent a mate who was asking me what I thought about what's going on. It borrows on many of the ideas (a) posted here and ( spouted by the likes of Rogers, Turk, Bonner and the rest. So nothing original, but it reflects my take on events. Very happy to be contradicted though if people disagree...

"History (e.g. 1930's depression, 1989 Nikkei collapse) tells you that all these band aids [a Roger's term] which Paulson, Brown et al continue to apply will ultimately make things worse not better. At the moment the vast sums of new money are being hoarded by the banks hence why we're seeing deflation on a mass scale. But history also tells you that at some point this money will show up in the economy and at that point expect (a) massive inflation particularly in cost of living items (where leverage is far less prevalent) and ( interest rates (esp. the US 30 year bond) to sky-rocket. Gold is trading (and I think will continue to trade) in the $750-$950 range for the foreseable future. In some ways it has done well (i.e. a whole lot better than other commodities and other asset classes) because it is viewed as money and so is less vulnerable to recessionary fears relating to the real economy. On the other hand, it has disappointed somewhat too because it's movements have not convincingly reflected its reputation as a safe haven 'no counter-party risk' asset class. I will continue though to buy gold on the dips, not so much because I'm bullish on it but more because I'm bearish on almost everything else. "

As wrongmove has pointed out, there is *always* a need to keep a sense of perspective on precious metals, and you'd have to be extremely brave -- or called Goldfinger :-) -- to dive fully into gold at any price, let alone recent prices. However even if you did, as long as you do it with your own money and not money ear-marked for the new family home, or your imminent retirement, or borrowed from a credit card, then you have -- as the quote goes -- nothing to fear but fear itself.

 

Can *anyone* honestly think that the pound or the dollar are going to retain their current value once the dust has died down? Will the Alt-A loans in the USA, or credit card debt in the UK, or the huge job losses to come in retail & restaurants etc do anything other than require more spending and borrowing to stave off social collapse?

 

This whole PM situation is not necessarily about making money, it's about NOT LOSING SO MUCH money in the face of the financial chaos. Or at least trying not to. If you're totally in any asset -- cash, property, shares, PMs -- you're asking for a thrashing with a slight chance of getting very rich indeed if you're right. Most of us though will just hope to spread our risks around and hope that something helps balance out the bad bets.

 

I'm pleased I bought PM recently even though I've lost a lot of money based mainly on the difference between buying and selling prices (and of course the VAT on silver). I think of it in the same way that I'd try to think about a house if I'd just bought it. Ok, so I overpaid. But as long as I can afford it, I have somewhere of my own to keep the rain off my head. I can similarly afford the risk that I'll never need the precious metal umbrella, but I feel so much better for having that umbrella in the first place.

 

We continue to live through historic times. The danger is that we forget that. The huge swings in markets become commonplace, and we get used to governments pulling financial rabbits out of bottomless magical hats. But sooner or later someone's going to try cutting a debt in half with the blunt saw of inflation, and there's going to be screaming from the box and blood all over the carpet.

 

Andrew McP

Great post and totally agree with you.

I'm no uber gold bull myself but in terms of the next 5 years I would rather hold 30-40% of my wealth in gold bullion rather than GBP.

As Marc Faber said recently: gold is one of the few places where people still have profits.

As Jim Rogers said recently: we are in a massive liquidation process where everything is getting sold off.

I’m relaxed re this sell off and have just bought some more.

As I explained to my sister last night, if I had the choice of burying either £10,000 in cash or £10,000 of gold in the back garden and then had to wait 5 years before digging whichever one up, the choice would be a no brainer (gold obviously!).

A recent interview with Paul van Eeden.

http://watch.bnn.ca/trading-day/october-20...2008/#clip99518

He maintains his fair valuation of gold at $760 and does not believe the Fed's actions are necessarily inflationary.

An interesting viewpoint especially when compared with the likes of Schiff, Turk and Rubino who expect gold to sore.

Long term I think Van Eeden remains bullish on gold but his time horizons differ from the above. I believe he has also ceased to put new money into juniors.

He also thinks the (hard) commodities bull market is over.

I agree physical gold is better than a derivative backed ETF (a lesson I learnt recently from holding an AIG soft commodities ETF ).

But gold in your hand vs. in a vault? I don’t think there’s much of a difference and here’s why.

If for some reason gold in the vault is confiscated or you are prohibited from taking delivery, then chances are there has been an almighty breakdown in the economy and society at large (I know things are bad but we’re not there yet), meaning very likely that paper money is worth little and law and order are out the window. In these circumstances, I think you’re better off with basic necessities together with, say, cartons of cigarettes, booze and maybe even drugs which you will be able to trade. I think that’s the paradox of gold: people hold it as real money (and I agree that gold is money) but when the time comes for when it is supposed to be useful you are probably better off trading things which people really need to survive.

I have a decent chunk of cash on standby in my BV account. Should I drip feed it in with certain price targets in mind or do people think we’re passed that point and should I just load up now (n.b. my savings are in £GBP and I would rather be in gold going forward than in this currency)? Mind you and FWIW, Paul van Eeden still thinks gold’s fair price is $760.He also thinks the commodities bull is over – see the latest video (which I saw last night) posted on his website.

Thanks again to the posters here (and a particular thanks to Wrongmove and Magpie who keep the other (and wise) posters in check and challenge them on their positions). This is what marks GEI out – you have mostly very sensible debate without things being reduced to personal abuse.

I don’t post a huge amount myself but I do read almost all of the posts and value the insight highly.

OG, I would second your suggestion re a conference call. Like you I too am fairly green in all of this and stand to gain a huge amount from any audio exchange.

AJC

Agreed. I like Schiff and what he has to say but that doesn't mean he's right all the time. I know he's been ridiculed at times but he's quite an arrogant guy who constantly ramps his book and Europac. I also think he is very US orientated and massively overestimates the strength of foreign currencies and economies. The US is not the only country which has bad fundamentals and is suffering.

Fair play to him though, you don't see the likes of Mike Norman et al on Bulls and Bears these days which is a shame because I would like to see what they had to say to Schiff.

I believe BV banks with Lloyds TSB, at least that’s where I fund my BV cash account.

I’m reminded of one of CWR podcasts last year with Paul van Eeden. In the first half of the show he said to Frizzers that we shouldn’t care what happens to the gold price in the short term because in the long run it’s going much much higher. In the second half of the show Frizzers mentioned this to Dr B who was a little sceptical of this argument and queried how much pain people could take. This is a very testing time for those of us who hold gold. Still, maybe it’s not so testing since there are plenty of other things falling at even sharper levels (e.g. Lehmans!).

At the end of the day, who is selling gold at the moment and where are they putting the proceeds? And why?

Thank you Marceau. A fantastic post.

Any good ETF's in the Uranium space or are individual stocks the way forward?

 

 

Don't think there's an ETF as such, although if you're after exposure to the spot price you can buy Uranium Participation Corporation - it buys uranium directly and stores it. If you want exposure to a spread of U stocks, Geiger Counter Ltd (GCL) is worth a look. Down from its highs last year but it's started to creep north again.

A fair amount of common sense in this article. The media in particular does seem to present the falling property market as something equivalent to the end of the world but if it forces people to take more responsibility for themseleves, spend less, save more and, as the author suggests, possibly work harder then it is just possible that there may be some benign consequences to the drop.

http://www.telegraph.co.uk/money/main.jhtm...0/ccliam120.xml

First post on this site. I'm a huge fan of the Minesite podcast and would like to thank Dr Bubb and Frizzers for all their insights. I have heard you both say (or at least Frizzers say) that the gold price is in for a nasty correction later this year (maybe back to $850) before its next jump. What is the basis for this prediction (e.g. simple profit taking or something else?).