A question for you gents please.
If you had say 19k in a short term deposit at 5.5% and you thought that you would do better in gold for 4 to max 12 months, what form of investment would you go with?
I.E. :
Perth Mint Certificate Program (PMCP)
Perth Mint Depository Program (PMDP)
or on the ASX - Perth Mint Gold Quoted Product (PMG) PMGOLD.
If none of above, any hints?
Kind Regards.
If you think that gold is in a bubble here you clearly have no idea what a bubble is. A bubble is not just a rising price
You know I have had people telling me we are in a gold bubble since we cracked $300 !:
If you think that gold is in a bubble here you clearly have no idea what a bubble is. A bubble is not just a rising price
It's true that a bubble is not just a rising price. It's when everyone gets into an irrational frenzy and price of something far beyond its actual value. Does gold fit this? Perfectly. In any bubble there are people saying "Don't be silly, this is not a bubble!" and of course, attitudes like yours are essential for a bubble to exist.
Look at TysonBoss' chart. Keeping in mind that gold is still just gold, the same old element it ever was, and pretty much all we do with gold is store it in warehouses and sometimes wear it as trinkets (and sometimes actually use a tiny little amount in electronics etc, where its actual value is a tiny percentage of what you have to pay for it)... does that sound like a bubble? You can't eat it, you can't burn it, you can't build roads or buildings or cars out of it (without being stupid)... and you're telling me I'm silly for calling it a bubble? The more a bubble inflates the bigger the inevitable pop. It's so inflated now it's hard to imagine it inflating too much more. It can't go up by several more times now. Just wait until decent numbers of people try to sell it to buy things which actually are useful... it's going to be spectacular(ly ugly).
The thing that scares me about physical gold atm, is the simple truth that in order for all of the retail investors to realise there profits, they HAVE TO SELL. Once you see that trend falter, or start to sway a little backwards, the rush to the exit will be monumental, as everyone rushes to realise profits/avoid the exit rush.
Personally, at the moment I feel i'd rather make a coin on the inevitable bust then speculate on the gold price increasing ever more.
Im going through the process of looking at the best ASX gold producers to use long put options against.
It's so inflated now it's hard to imagine it inflating too much more. It can't go up by several more times now. Just wait until decent numbers of people try to sell it to buy things which actually are useful... it's going to be spectacular(ly ugly).
So very true, It's not like owning a business or a piece of real estate or even a piece of farm land where actual value is generated year in year out and income is thrown off which feeds you,
Gold must be sold to realise it's value, When ( not if ) it pops it will be a rush to the door like no one has seen.
At the moment round the world people exiting the real wealth of this world ie. real esate, farmland, mining assets and business and entering the "safe haven" of gold. Once the storm clouds pass, which they always do, people will want income producing assets again and leave gold in droves.
I own farmland, realestate, mining assets and businesses and yes, the quoted market value is a little less now, But there is no way I am swaping them for a shiny metal, especially at current prices.
[Shakes head in amazement]
What needs to be done is some basic research on why gold has any perceived 'value' at all, then maybe revisit the bubble hypothesis?
Yes, it's true that the price of gold is relatively high, that is, if you are measuring it's price point against other things that you deem to have 'value' ie your other 'assets'. What you haven't accounted for is that gold is now well & truly a currency, perhaps the only real currency left in the world. So if you need to start exchanging your paper money, which is being debased daily, for something that only needs to hold it's value - it doesn't need to pay an income - then you are still way ahead of the pack, who are still holding bits' of paper or plastic IOU's from central banks who just happen to keep printing/creating more of the stuff ie fiat is not as scarce as gold.
Which is the reason why gold is rising - on a relative basis it is not being created as fast as fiat?? Or, gold is not being debased (mined) as fast as fiat is created, or more to the point, as fast as the value of your existing money is being destroyed....
So you will have to factor in the continued debasement of the fiat money in your pocket until nobody is willing to exchange it for anything of 'value', at which point the system has failed.
That's not to say that there won't be dramatic sell-offs, maybe soon if they (the market regulators) go marginless, but untill 'they' fix all the problems with global debt etc it a matter of 'buy the ** dips'!
It's true that a bubble is not just a rising price. It's when everyone gets into an irrational frenzy and price of something far beyond its actual value. Does gold fit this? Perfectly. In any bubble there are people saying "Don't be silly, this is not a bubble!" and of course, attitudes like yours are essential for a bubble to exist.
Thanks very much explod and Mr Z.
Your caution re not holding the physical gold is noted.
I do wonder if the cost for transportation at the beginning and end, holding cost etc will make the exercise worthwhile as I am more driven by short-ish term gain rather than doubting NAB's security with my term deposit cash.
I remember missing the opportunity I saw when Commbank shares were $27 and I couldn't take advantage of it and it seems like this is one of those times as far as gold goes.
regards.
[Shakes head in amazement]
What needs to be done is some basic research on why gold has any perceived 'value' at all, then maybe revisit the bubble hypothesis?
Like this bit -
"Once the storm clouds pass, which they always do, people will want income producing assets again and leave gold in droves."
What if they don't? Who is going to make the storm clounds pass? Ben Bernake?? Bernanke just indicated that interest rates will be negative for the next 2 years because his QE's have failed, and they are fast approaching a double dip recession, only all their ammo has been spent!
The US has just passed the point where debt to GDP ratio indicates that they will struggle/fail to pay their debts without continuing to draw down their national savings ie plunder their retirement savings accounts. Not to mention some $200TRILLION in future liabilities! All compounded by polititians who only worry about the next election & unwilling to take the drastic measures needed to fix the problems, if they are fixable at all?
That's not to say that there won't be dramatic sell-offs, maybe soon if they (the market regulators) go marginless, but untill 'they' fix all the problems with global debt etc it a matter of 'buy the ** dips'!
You aint seen nothing yet............
As for Buffett - nothing more than a cheer leader for the Fed's loose money debasement policies, who will be left holding a portfolio of dramatically worthless shares in companies reliant on the credit addicted US consumer, who is bankrupt......
Comparing gold to CBA @ $60 is presupposing this is the top for some years to come, that is very unlikely.
But please go ahead and explain why it is different this time.
Could you please offer your thoughts what prospect you see for gold price to be somehow/partially integrated into an international settlement currency, and how might that work in practice?
All bull markets end badly,
Gold is no different, it is being driven higher by fear and greed combined, eventually fear will subside and the greedy with realize the gains are reversing and they will bail.
Your comparing today's gold price to missing out on Cba shares. But gold is at an all time high. So it's actually like missing out on buying cba for $60.00.
Look at the xao chart over the last 40 years and compare it to the gold chart.
You'll see 2007 was not a good time to buy Cba shares and 2011 is probably not a good time to buy gold.
All bull markets end badly,
As a complete stranger to gold investment, I really only need to decide on the best form of gold related investment with the least security risk and least costs for a period of up to say 12 months.
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