Open question - Financial

[Dan00001]

So a good time to buy precious metals, e.g. gold silver etc?

It's always a good time to stack precious metals, I wouldn't try to time it for that reason.


I've personally started buying funds that track Gold & Silver this week. I will keep pumping money into them really slowly. There may be more downside but eventually they will move back up. But it's higher risk than the indices.

 

[Dan00001]

I also buy and sell leveraged funds that track the indices, though I'm almost completely out of those and waiting for the market to turn downwards before I start buying again. Hoping I'm not too wrong on that, I don't like to see the market continue higher when I've sold out.

 

[slowworm]

So a good time to buy precious metals, e.g. gold silver etc?

Some views suggest not right away because some will sell gold and silver to close out positions if the stock market collapses. Longer term it's hard to not see it rising.

 

[demented dale]

So a good time to buy precious metals, e.g. gold silver etc?

Its always a good time to buy physical metals if you want to protect your wealth. There is a saying that goes "If you dont hold it, then you dont own it" The stock market is pure fantasy and just a glorified bookies. You can play the game short term but it will collapse and I believe very soon. Any money I get now I buy tools and things I will need. Even gold and silver might turn out to be useless although it is at a low compared to earlier in the year so probably a good time to get a bit. if you have a few quid to spend. DD xxxx

 

[HorseGuy]

Yes, I follow bond yields to see where interest rates are going. And they are only going one way imo. Up.

I think the natural market forces acting on bonds are going to continue to push them upwards. However central banks may soon be forced to take action (aka yield curve control) to prevent them from continuing to rise much further.

As far as I can see if the bond yields continue to rise then central banks will have only three options available to them:

Option 1
Do nothing and let the bond yields continue to rise in a rapid and uncontrolled manner. This would result in governments being forced to default on their unpayable debts, a crash of stock markets and a major recession or depression.

Option 2
Revert to massive quantitative easing creating a huge amount of new currency which would be required on an enormous scale and use it to buy all of the bonds themselves to stop the yields from rising any further. However such a massive level of new currency creation would probably result in runaway hyperinflation and a collapse of fiat currencies as a result. Governments wouldn't technically be defaulting on their debts though as they would then be able to pay them back using devalued or worthless fiat currency.

Option 3 (in my opinion the most likely choice they will try to take)
They could attempt to straddle a line somewhere between option 1 and 2 by doing a lower level of quantitative easing and using the newly created currency to buy some of the bonds to slow the rate of the yield rise in a more controlled manner but not enough to totally stop the yields from rising altogether. This would likely result in rapid inflation (but not necessarily a total runaway hyperinflation), also an eventual crash of stock markets and a recession/depression. Possibly governments might also eventually default on their unpayable debts too. However with option 3 it's more likely these things might be dragged out and unfold at a slower pace (maybe even taking several years?) than would be required for options 1 or 2.

EDIT - Just to add that although I expect central banks will probably attempt to try option 3 first, if bond yields were still to continue climbing uncontrollably they may find themselves forced to moving into option 2 and hyper-inflating the currency

 

[HorseGuy]

So a good time to buy precious metals, e.g. gold silver etc?

After a long break this year I started buying again at the start of August and have been steadily making monthly purchases since. I don't know if it is going to go up or down in the near term but I'm sure it will go back up eventually. I intend to continue making small steady purchases every month until it moves up then I will stop, sit back and enjoy the ride.

Not financial advice. Just what I'm personally doing.

 

[Sooty22]

So a good time to buy precious metals, e.g. gold silver etc?

Probably yes, but be careful with timing as folk tens to ditch gold when the oil market is very volatile, either to trade oil or to cover losses they incurred. However, long term, I think it can only head one way.

 

[C_Claycomb]

Please remember, there is a rule for no politics.
Two posts removed following report.
Commenting on foreign politicians doing things, theories as to why, ramifications of those actions beyond the original thread topic and disparaging the supporters of aforementioned foreign politicians for being swayed by the actions.
Thanks.

 

[demented dale]

After a long break this year I started buying again at the start of August and have been steadily making monthly purchases since. I don't know if it is going to go up or down in the near term but I'm sure it will go back up eventually. I intend to continue making small steady purchases every month until it moves up then I will stop, sit back and enjoy the ride.

Not financial advice. Just what I'm personally doing.

 

[demented dale]

I reckon the best thing to invest in is a working knowledge of bush craft and prepping and some really good kit and tools. I would have that any day over gold, silver bonds and money. I am suprised that this finnancial mess has stayed afloat as long as it has. DD xx

 

[slaine_23]

I too wondered about this.
A ton of diesel is about 1200 litres, a barrel about 160 litres.
2 160 000 000 litres
The US uses approx 3.75 million barrels per day, - 600 000 000 litres.
If the calcs are correct (would prefer using a spreadsheet to check) it’s a mere few days supply?
It’s a drop in ocean.

It might affect sentiment but not supply.
Either way it’s gives a cash boost to Russia.

 

[TeeDee]

There is a very old book - Richest man in Babylon - in it he suggests buying a single gold coin every month of a working lifetime.

So effectively a pound costing average / pension investment.

I'm not sure how the maths would work out Vs relative cost invested to total amount and return but I'm pretty confident over the super long term it would be a solid positive investment.

Boring - for sure.

 

[MartinK9]

There is a very old book - Richest man in Babylon - in it he suggests buying a single gold coin every month of a working lifetime.

So effectively a pound costing average / pension investment.

I'm not sure how the maths would work out Vs relative cost invested to total amount and return but I'm pretty confident over the super long term it would be a solid positive investment.

Boring - for sure.

£3262 for a Britannia atm, £762 for a Sovereign. How long ago was it written? lol

 

[TeeDee]

£3262 for a Britannia atm, £762 for a Sovereign. How long ago was it written? lol

Yep , admittedly one would need to look at how much of a monthly average wage it would be BUT there are smaller denominations than the two you quoted available - I believe it's possible to purchase 1/4 sovereigns.

I think the take away point was not to treat it as when to purchase into a specific market ( property - shares - precious metal ) but to drip-drip--drip feed into the most attractive ( to the investor ) every month over the long term - classic pound cost averaging .

As opposed to thinking one maybe able to guage or judge the best time to enter a market.

 

[Dan00001]

I reckon the best thing to invest in is a working knowledge of bush craft and prepping and some really good kit and tools. I would have that any day over gold, silver bonds and money. I am suprised that this finnancial mess has stayed afloat as long as it has. DD xx

I suppose this comes down to how bad you see things getting. Complete societal collapse, bushcraft skills, and the ability to catch food, might come in very handy indeed.

Where it would be good to hold precious metals and/or foreign investments would be If we saw a hyperinflationary event in the UK. Say the pound lost 90% of it's purchasing power and Gold/Silver's international price remained constant, they could become 10x more valuable in GBP. The same applies to foreign investments/currencies.

 

[Dan00001]

Yep , admittedly one would need to look at how much of a monthly average wage it would be BUT there are smaller denominations than the two you quoted available - I believe it's possible to purchase 1/4 sovereigns.

I think the take away point was not to treat it as when to purchase into a specific market ( property - shares - precious metal ) but to drip-drip--drip feed into the most attractive ( to the investor ) every month over the long term - classic pound cost averaging .

As opposed to thinking one maybe able to guage or judge the best time to enter a market.

Yeah, the point isn't about the amount of Gold to buy but regular investments, whether it's 1g every 6 months or a sovereign once a week. Both are a good investment, the only difference being how much and how often one can afford to buy. Although even 1g is quite a lot now. It wasn't that long ago I was paying under £70 for a 1g Gold bar. now it's like £140

 

[demented dale]

I suppose this comes down to how bad you see things getting. Complete societal collapse, bushcraft skills, and the ability to catch food, might come in very handy indeed.

Where it would be good to hold precious metals and/or foreign investments would be If we saw a hyperinflationary event in the UK. Say the pound lost 90% of it's purchasing power and Gold/Silver's international price remained constant, they could become 10x more valuable in GBP. The same applies to foreign investments/currencies.

I suppose this comes down to how bad you see things getting. Complete societal collapse, bushcraft skills, and the ability to catch food, might come in very handy indeed.

Where it would be good to hold precious metals and/or foreign investments would be If we saw a hyperinflationary event in the UK. Say the pound lost 90% of it's purchasing power and Gold/Silver's international price remained constant, they could become 10x more valuable in GBP. The same applies to foreign investments/currencies.

You are correct Dan. I have only ever seen metals as a way to preserve wealth against inflation and a means of holding psyhical assets. I remember reading that one ounce of gold bought you two hundred liters of wine in roman times and today you get the same. I did a compare the market this week and found that a posh roman toga stills costs as the same as an expensive fitted suit if you bought it in gold. In answer to all this. No one knows and there is no right or wrong way. A sensible approach is to hedge your bets and put any money into several different things. I do however stand by what I said in that if I had to choose just one of the available resources to me then it would be survival skills. You cannot put a price on what we learn on here, Thanks for engaging. xxxx

 

[Dan00001]

You are correct Dan. I have only ever seen metals as a way to preserve wealth against inflation and a means of holding psyhical assets. I remember reading that one ounce of gold bought you two hundred liters of wine in roman times and today you get the same. I did a compare the market this week and found that a posh roman toga stills costs as the same as an expensive fitted suit if you bought it in gold. In answer to all this. No one knows and there is no right or wrong way. A sensible approach is to hedge your bets and put any money into several different things. I do however stand by what I said in that if I had to choose just one of the available resources to me then it would be survival skills. You cannot put a price on what we learn on here, Thanks for engaging. xxxx

Yeah, if you think of it another way, Gold's value hasn't increased or decreased, it's currency monies value that has significantly decreased.


Outdoor skills are great to have, and something I need to work on.

 

[HorseGuy]

I have only ever seen metals as a way to preserve wealth against inflation and a means of holding psyhical assets. I remember reading that one ounce of gold bought you two hundred liters of wine in roman times and today you get the same. I did a compare the market this week and found that a posh roman toga stills costs as the same as an expensive fitted suit if you bought it in gold.

Yeah, if you think of it another way, Gold's value hasn't increased or decreased, it's currency monies value that has significantly decreased.

These statements are absolutely correct. The amount of gold required to purchase something like a house, an expensive fitted suit, a healthy cow or whatever else has remained more or less unchanged (within a narrow range) for several thousand years. So yes gold is a safe way to preserve wealth against inflation.

However the amount of gold required to purchase a house or whatever does not constantly stay exactly the same all the time. The value of gold does actually fluctuate up and down slightly within a fairly narrow range. As a rough guide to where this range falls it will almost always cost between about 50 to 200 oz of gold to buy an average mid-sized house. These fluctuations in gold value tend to go up and down in waves which take several decades between each peak and trough in the cycle. It’s expected that any one person will likely only ever see just one or maybe two of these complete gold cycles within their full life time. That’s how long they take.

A good example of this gold cycle is to look at relative house prices. Obviously when measured in fiat currency terms house prices steadily go up as the currency loses its value. However when measured in gold terms, house prices have actually been steadily decreasing for about the past 25 years. The number of oz of gold required to buy an average family home has dropped from roughly 200 oz at the turn of the century down to about 100 oz now (give or take a bit). This gives us a rough idea of where we currently are in the gold cycle. We are about 25 years into the uptrend part of the cycle as gold continues to steadily increases in value over time. At the top of the cycle we can reasonably expect it to take roughly about 50 oz of gold to buy an average sized house (give or take a bit). It's impossible to say exactly how much longer will be left before the end of this cycle because the last part usually ends with gold accelerating upwards towards the end before reaching its peak value. My guess is that we might have around 10 years left to go but this is a very rough guess with a low degree of certainty.

Another thing worth noting is that there are also occasionally very brief outlier moments in history when gold can temporally spike up in value well out of its normal range. It can spike up to being worth around 10 oz of gold to buy an average sized house (give or take a bit). These occurrences are rare though and only ever last for a few days or weeks at a time. These brief periods when gold becomes temporarily over-valued only ever occur at the exact moment when a fiat currency dies and goes into hyperinflation. For that brief window of time when nobody will accept the old worthless fiat currency any longer but the next currency has not yet started, this is when gold will briefly be over-valued and worth the most. Another thing to note is that silver usually outperforms gold at these times but it is much harder to time because it usually peaks first before gold does and only for a shorter period of time before rapidly dropping back down in value again. Gold is generally expected to peak shortly after silver has and when it does drop back down in value it does so with far less volatility.

My source references for all of this information about gold cycles and these repeating recognizable patterns are from Ray Dalio, Mike Maloney and Mario Innecco.