geisaver

 

If the pound does collapse could foreign money flee UK property?

Isn't this news more fuel for London property prices? People have a choice between keeping money in dodgy EU banks that might start stealing it or dump it in London property whose value is always protected the the UK government at any cost. If more money did flow into London property that would sterling positive. TPTB might have just managed to persuade lots of Europeans to buy houses in Spain, France, etc

Iv been seeing more and more "Gold news story's" In the mainstream news,

 

 

==============================================================================================

 

Should I swap my £10k cash Isa for investing in gold bullion?

 

Read more: http://www.dailymail.co.uk/money/experts/article-2187826/I-cash-Isa-10k--I-invest-gold-bullion.html#ixzz24Lt73TCz

Front page of the FT is Republicans considering a return to the gold standard

I can't stick it in a savings account as inflation will destroy it.

That depends what you are going to spend the money on. If it's a house only house price inflation can harm it. Any other inflation is your friend because it means other people have less money to save your house fund.

I think there is nothing that will prop up the property/asset market in the UK much longer, beyond the Olympic games. A delayed delusion perhaps, but we are pricing falls of above 20 percent after August 2012 and who knows.

Who is "we"?

Another big drop?

 

Gold down $17 so far.

 

Where's that fizzling rocket?

That drop seemed to coincide with the US jobs report. The figures were better than expected and previous figures were revised higher.

Am I right in thinking gold dropped because it meant less chance of an imminent QE3?

Any chance all the comments about the bickering could be moved to the original gold thread and keep this one for what it says on the tin?

Gold and currency news....

I must just be old fashioned.

I don't want the world to crash and burn but I would like moral hazard to not be so openly encouraged.

In the current system it feels like crime pays.

John Doe, I've read what you've written over the last few pages (and few years), and all you seem to offer is misdirection, misrepresentation and confirmation bias - a superficial parroting dogmatist. You're not the only one who's been around a while, but if you can't or won't take the time to understand why this situation is different to the 70s then I see no point in engaging with you further - and I'd recommend that no-one else here attempt it either. A lost cause in every regard.

 

I think you're a panglossian fool of the most dangerous type. Look away if you must - but don't encourage others to do so.

I've always thought he was Hamish McTavish.

As to the Conlibs reducing the deficit. Prior to being elected "printing money was the last act of a desperate government when all other policies have failed" and "the deficit will be reduced to zero in the parliament". Once they got into power they printed money which has pushed deficit reduction to zero further into the distance. Now it's 7 years instead of 5 because each time they print it is so they can spend more. They keep going back on planned cuts. Even if they didn't print again that means we have at least another 7 years of adding to the debt. They never discuss reducing the debt - it's a large elephant in the room they pretend doesn't exist. Eventually they are going to be unable to keep printing as debt to GDP rises or we go even more banana than what we are now. People taking on debt now because rates are at a 300 year low are completely stuffed. The banks are sitting pretty all the ponzi deposit lending schemes have removed lending risk from them, they will be able to take the house price falls when they squeeze the indebted.

You're still utterly failing to grasp the concept. The increase in debt sustains the growth, not the other way around. If my growth is 1% but I'm I have to borrow 8-10% each year to fund that, is it sustainable? The growth is illusionary. People are not getting richer, they are getting poorer by any normal measure. Why? Because the economy is now aligned in a way that is value destroying.

Perfectly illustrated by the OBR's own forecasts of how little net worth increases in relation to a much larger increase in debt (before interest is even applied)

http://budgetresponsibility.independent.gov.uk/wordpress/docs/household%20debt%20paper%20formatted.doc1.pdf

I've said it before and no doubt I'll say it again before this is over. ALL possible outcomes from this situation result in rapid and dramatic rate rises.

 

It still amazes me that so few understand how fragile, artificial and temporary the current rate environment is. It could last a few more years, but in terms of a 25 year+ mortgage commitment that's the blink of an eye.

 

Taking on hefty debt at the moment is pure folly.

I agree with that. The banks to do well out of it?

Since 2007 lending criteria has tightened and larger deposits were required. Now councils and the government are going to provide 20% deposits on various ponzi schemes because the banks won't lend 95% - they know what's coming. When rates rise people are going to struggle but when they sell, the loss to the banks is going to be minimal, while they rake in more mortgage interest. They have shifted the lending risk to bank of mum/dad, councils and the government. I can see more housing activity this year with all these ponzi schemes. The banks will lend on 95% mortgage schemes because they have such limited downside to them at no loss for 5 years and then only if prices drop 25%+. But these schemes all depend on the B of E printing to suppress our interest rates forever while our debt to GDP is rising. Surely it cannot last? We don't have savers in Japan to fall back on?

As FOA once said all mines will be nationalised. Its inevitable.

I was wondering about that when I did this thread.

http://www.greenenergyinvestors.com/index.php?showtopic=16022

I thought streamers might be a better bet because of it. However if governments start limiting the number of years foreigners can hold 100% of a mine if that applies to streamers the model doesn't look as good. If it's applied retrospectively it's a lot worse. Of course this is only Indonesia but is it the start of a trend?

I see the silver and gold streamers are slightly down today so far even though the metals and DOW are slightly up.

I know posting some news about gold/mining etc might get in the way of the bickering on here but that Indonesia article I posted is quite interesting - to me anyway being a less argumentative control freak of an antagonistic type person!

If other countries started doing that what would be the position of streamers with long term contracts?

Government making foreigners sell mine holdings

Indonesia will force foreign firms to sell down stakes in mines by the 10th year of production, with domestic ownership to be at least 51 percent, in a move likely to hurt existing miners and scare off potential investors.

 

The new rule is the latest government move to extract greater domestic profit from the vast mineral wealth in the world's top exporter of thermal coal and tin.

 

The requirement, stated in a regulation on the mining ministry's website, comes as the government is renegotiating contracts with the leading foreign metals miners in the country, Freeport McMoRan Copper & Gold Inc (FCX.N) and Newmont Corp (NEM.N).

 

Southeast Asia's largest economy contains some of the world's richest mineral deposits, such as the Freeport-run Grasberg, the world's largest gold mine, and its fast-growing mining sector accounts for about 11 percent of GDP.

 

It was not clear if the regulation, effective from February 21, will apply only to new investors or also to existing mining investors.

 

more http://uk.finance.yahoo.com/news/indonesia-limit-foreign-ownership-mines-090137499.html

My own view on this is there is a "flight to safety" in London; people are of the opinion that London will be more resiliant because of population density, so therefore they are less fearful of prices falling in the capital, and it becomes a self-fulfilling prophecy. Exactly what we are seeing in the bond market between different countries. People will lend to the US & UK at negative real rates, but demand 6% or 7% to the PIIGS, when all these countries are technically as insolvent as one another.

What we are seeing in the bond market is not a flight to UK safety. We are seeing the B of E print money to buy our own debt to suppress the yield. The PIIGS yield has now dropped because the LTROs have meant they can do the same via their banks. Their other problem was they had more debt maturing earlier.

There is room in this world, and on this website for different points of view, but I do not like seeing people trying to practice mind control, and expecting others to behave like sheep. For myself, my own views tend to be controversial (buying gold in 2001 near $250), and so I will not attract much of a following at those times. By the time others start to follow, I will have begun to move on elsewhere.

That's a bit of a funny thing to say for a trader rather than a buy and holder. I know you talk about a core position but if you had ultimate faith in your beating buy and hold, wouldn't you have been in and out of gold many times since 2001 and used the whole pot? Even if it was in stages. Isn't the $250 largely irrelevant to a trader? Surely the most important figure is the profit margin on the last trade?

"By the time others start to follow" - seems a JS goldbuggy type statement when it's up 600% from the $250.

Tax free:

EXEMPTING GOLD, PRECIOUS METALS FROM GST

 

Singapore will exempt investment-grade gold and other precious metals from goods and services tax (GST) to facilitate the development of gold trading. The change is aimed at meeting strong demand for investment-grade gold in Asia.

 

http://uk.finance.yahoo.com/news/highlights-singapores-2012-13-budget-102050314.html

Is that like their VAT? What about CGT?

This might be worth reading to anyone who has mining shares,

 

Link.....http://goldnews.bullionvault.com/gold_mining_020920126

 

New Tax Could Threaten Gold Mining in Tanzania - 9 February 2012

 

Mining shares not doing well today. Tax double whammy?

This mining tax causing concern and corporation tax loopholes being closed?

WASHINGTON (Reuters) - Treasury Secretary Tim Geithner on Tuesday said the Obama Administration's plan to revamp the corporate tax system will cut "dozens and dozens" of tax breaks enjoyed by business, while keeping a limited number that focus on keeping jobs in the United States.

 

Geithner spoke at the Senate Finance Committee a day after Obama proposed a $3.8 trillion budget plan, including aggressive cuts to corporate tax benefits and steeper taxes on the wealthy

There is this one: http://www.hypoport.de/hpx-hedonic.html

 

Higher wages next?

German wages should be raised by more than 2 percent this year, Labour Minister Ursula von der Leyen said in an unusual appeal to employers on Sunday that was quickly criticised by leaders of her own ruling coalition.

 

Von der Leyen, sometimes mentioned as a candidate to succeed Chancellor Angela Merkel, told Bild am Sonntag newspaper that workers in Germany deserved a pay raise above the inflation rate, currently 2.1 percent, after years of settling for less.

 

Wages for some 9 million workers are up for negotiation in the weeks ahead and Germany's two biggest unions are seeking 6.5 percent pay rises: the powerful IG Metall for the 3.6 million workers in the engineering sector and Verdi for 2 million public sector workers. Employers dismiss the demands as exaggerated.

http://www.reuters.com/article/2012/02/12/germany-wages-idUSL5E8DC3J420120212

 

I'll believe it when I see it:

Bank of England may put limit on mortgage ratios

 

The Bank of England could intervene and cap the maximum mortgages available to borrowers to stop another credit crisis, George Osborne said on Monday night.

 

Banks and building societies could be barred from offering loans if a buyer puts down only a small deposit.

 

Ahead of the credit crisis, buyers were offered mortgages worth more than the properties they were purchasing – or only a small amount less than the home's value.

 

When property prices fell, many were plunged into negative equity while other borrowers could not afford their mortgages.

 

Last night, Mr Osborne said the Financial Services Bill would give a new Bank of England committee powers to "alter the maximum loan-to-value ratios in mortgage lending to curb a sharp, unsustainable rise in house prices".

 

The new Financial Policy Committee (FPC) would also be able to force banks to hold more capital to stop credit bubbles growing out of control, as part of reforms the Chancellor said would "affect the bread and butter of people's daily lives".

 

Mr Osborne told MPs: "This FPC should act symmetrically... Its job is not just to try to moderate a credit boom but to try to alleviate a credit bust.

 

"The precise tools we give to the FPC are yet to be determined. I freely accept that we are largely in un-chartered territory in policy making here or indeed anywhere in the world.

 

"But surely the experiment of making no attempt to moderate the credit cycle, let the bubbles grow and burst and then clean up afterwards, has been an unmitigated disaster and I think we would be failing if we didn't look for an alternative approach."

 

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9065031/Bank-of-England-may-put-limit-on-mortgage-ratios.html

This is the way I read what Alf Field is talking about. Basically we have had the major one wave, which is split into five minor waves, 3 up and two down. We then had the major two wave which is a corrective one. We have started on major wave three and have already had the first two of the minor waves within it.

 

What comes now is minor wave three of major wave three, which should be the biggest gain of the whole bull run and definitely not a time you want to be sat on the sideline. Alf explains how this wave should be around a 500% gain which will take us to around $158.

 

It seems counter intuitive to me having the majors at the top and bottom.

It makes more sense to me if it were annotated like this, which I think is what he is saying:

In UK at least, physical gold ownership seems to me like more tax efficient.

Also, holding GLD when you live in GBP means you're depending on the USD <=> GBP exchange.

 

That's why I "hold" physical in GM and BV.

 

But, probably there are a lot of things I don't know about, so what would you do, DrBubb, if you wanted to hold gold but were living in GBP?

I think the tax issue is very important. It's no good being right about a rise in metal prices if they are going to steal it from you via tax.

I've just finished reading Currency Wars by James Rickards and although he predicts a huge rise in the Gold price if there was a return to a Gold standard, he also suggests there could be a 90% tax.

If this was applied when you sold e.g. allocated or physical, the profit is taken away or you risk selling on the black market and having it stolen.

Swapping metals at GM can negate CGT but what if it was just a blanket tax on any sale outside of CGT or even confiscation of say London Gold?

Therefore I've been wondering if another approach is to channel money into ISA's, in small amounts spread across several firms for FSCS reasons (TD thread ), to buy metal streamers. ISA's are CGT free so if the metal prices rose wouldn't the shares rise proportionally but you escape any increase in a tax on metal sales?

Obviously there are risks investing in individual firms, their mines might get nationalised if prices rocketed up, etc. but if it's a streamer with mines spread about it reduces some of the risk.

Another consideration is the currency rate if buying international shares. If you expect GBP to do poorly and are proved correct, you profit more.

Or you could go for a fund that that invests in miners.

Any thoughts?

I am the wrong guy to ask. Did you read the whole article?

Yes, which is why it seems the Major Two isn't in the right place. He talks about "starting from the $26.39 low" which I assume is the start of Major Three.

For the TA/EWT crowd.

 

http://www.jsmineset.com/2012/02/02/new-ew-silver-discovery/

I find the annotations on that chart confusing.

Does he mean that his Major One point is the end of Major One but where he has put Major Two is not the end but the start of Major Two, the end of Major Two was 49.52 and now the start of Major Three is 26.39?

If the Major Two was at the 49.52 point it would make more sense to me.

gold looks a safer bet to me..

 

I hope you enjoy your cruises callmejoe. You must have got some bargain prices after the Costa Concordia.

Make sure you ask the captain to put passengers carrying bullion in cabins on different sides of the ship. You don't want them all on one side like that one.

I'm looking at silver prices today and wondering why things are trading differently.

For example spot silver is down from yesterday, Comex is about level, a share like Silver Wheaton is down as you would expect being a streamer but Proshares Ultra Silver is up, iShares Silver Trust is up, etc.

Is there an arbitrage here somewhere? Is the spot price largely irrelevant as the Comex price moves everything? Is there usually an order to how things move?