"Safe" investment, maybe gold?
Discussion
Mr Whippy said:
but that’s why it’s a good hedge because if they drop gold often goes the other way.
BUT, gold is in hand and relatively liquid, while money in the markets isn’t.
Just look at all the ‘liquid’ bonds freezing redemptions and so on.
Re gold being a good hedge, when everything was under pressure didn't it drop around 15% over the space of a week?BUT, gold is in hand and relatively liquid, while money in the markets isn’t.
Just look at all the ‘liquid’ bonds freezing redemptions and so on.
I'm not sure why you think money in the markets isn't liquid - I've seen lots of rebalancing going on during this period with no issues
What liquid bonds are you referring to?
I wouldn't call gold liquid at the moment. Far from it. Refineries are widely shut, retail is pretty much sold out and physical settlement is proving so difficult that extraordinary measures are in place for shipping the stuff.
There are many stages to this crisis event and what gold or any other asset does largely depends on what stage we are in the process and what will now unfold. There's a rush to the dollar initially as a safe haven. Gold is being dumped along with everything else to pay for margin calls, cash crises, bankruptcies, what have you.
The question is what happens if things continue unwinding to a major deleveraging event, past recession and into a depression. What plays will central banks make to try and prevent this happening. What is the medium to long term effect of the unprecedented monetary inflation that they've already instigated. Thinking about a sensible hedge is perfectly reasonable under the circumstances. Sitting only in cash & stocks doesn't provide a hedge.
There are many stages to this crisis event and what gold or any other asset does largely depends on what stage we are in the process and what will now unfold. There's a rush to the dollar initially as a safe haven. Gold is being dumped along with everything else to pay for margin calls, cash crises, bankruptcies, what have you.
The question is what happens if things continue unwinding to a major deleveraging event, past recession and into a depression. What plays will central banks make to try and prevent this happening. What is the medium to long term effect of the unprecedented monetary inflation that they've already instigated. Thinking about a sensible hedge is perfectly reasonable under the circumstances. Sitting only in cash & stocks doesn't provide a hedge.
I've been following/researching gold & silver the last few days. As others have mentioned, it's very hard to come by (depending on where you are) and yet prices are relatively low - especially for silver hovering around $14.50 per oz. Demand is high for precious metals, which must mean the prices are being artificially fiddled with
With the risk of hyper-inflation in the future, I wouldn't play precious metals down. The last time there was hyper-inflation here was iirc 1979-1980 and silver jumped from $6.04 per oz to $49 per oz...
I've just bought 20x silver 1oz American Eagle coins as a tester from a dealer, once these arrive safely I will be in for 10oz Bars
With the risk of hyper-inflation in the future, I wouldn't play precious metals down. The last time there was hyper-inflation here was iirc 1979-1980 and silver jumped from $6.04 per oz to $49 per oz...
I've just bought 20x silver 1oz American Eagle coins as a tester from a dealer, once these arrive safely I will be in for 10oz Bars
Edited by TobyTR on Saturday 28th March 11:08
227bhp said:
egomeister said:
227bhp said:
Like bog roll and pasta, you've left it a bit late to be buying gold. You should have listened to the doom mongers a year or two ago.
Where the heck all this money is coming from I have no idea, it's not like we were exactly rolling in it before this hit and the current costs must be astronomical. They're actually paying mine and thousands more wages to stay at home, it's bonkers.
Obviously I understand why, but it still looks like financial suicide.
If current policy is financial suicide, why is it late to buy gold?Where the heck all this money is coming from I have no idea, it's not like we were exactly rolling in it before this hit and the current costs must be astronomical. They're actually paying mine and thousands more wages to stay at home, it's bonkers.
Obviously I understand why, but it still looks like financial suicide.
If you study the charts for long enough you see a pattern emerging and it drops in value at the same time every year which is the time to buy.
ATG said:
Mr Whippy said:
ATG said:
Behemoth said:
Ah, that'll be the basket of goods that the govt carefully curates 
Inflation exists in many more places than measurements of the price of bread and a gallon of petrol.
Buy tin foil futuresInflation exists in many more places than measurements of the price of bread and a gallon of petrol.
Internet, TVs and telephones are cheaper, so win win... inflation is low
If you calculate your personal inflation level and don’t buy TVs and phones all the time, then it seems gold is a good buy.
But if you like to buy TVs and phones. Avoid the yellow metal.
My only advice on PMs is avoid silver
VAT + spread = insta 25% loss.
In the UK we do see politicians picking whichever of RPI and CPI sounds best when taking to Joe Public, but that doesn't make either RPI or CPI wrong or a distortion of reality. They're just different in the same way that a Ford Focus is not a Mondeo.
If there was a massive external shock which wipes out demand for the discretionary purchases, the true nature of the inflation of things that really count is revealed more starkly.
Behemoth said:
I wouldn't call gold liquid at the moment. Far from it. Refineries are widely shut, retail is pretty much sold out and physical settlement is proving so difficult that extraordinary measures are in place for shipping the stuff.
There are many stages to this crisis event and what gold or any other asset does largely depends on what stage we are in the process and what will now unfold. There's a rush to the dollar initially as a safe haven. Gold is being dumped along with everything else to pay for margin calls, cash crises, bankruptcies, what have you.
The question is what happens if things continue unwinding to a major deleveraging event, past recession and into a depression. What plays will central banks make to try and prevent this happening. What is the medium to long term effect of the unprecedented monetary inflation that they've already instigated. Thinking about a sensible hedge is perfectly reasonable under the circumstances. Sitting only in cash & stocks doesn't provide a hedge.
I'd say it remains pretty liquid if you want to sell the stuff There are many stages to this crisis event and what gold or any other asset does largely depends on what stage we are in the process and what will now unfold. There's a rush to the dollar initially as a safe haven. Gold is being dumped along with everything else to pay for margin calls, cash crises, bankruptcies, what have you.
The question is what happens if things continue unwinding to a major deleveraging event, past recession and into a depression. What plays will central banks make to try and prevent this happening. What is the medium to long term effect of the unprecedented monetary inflation that they've already instigated. Thinking about a sensible hedge is perfectly reasonable under the circumstances. Sitting only in cash & stocks doesn't provide a hedge.
Derek Chevalier said:
TobyTR said:
and yet prices are relatively low - especially for silver hovering around $14.50 per oz.
How do you determine whether prices are high or low when it doesn't pay an income stream such as a dividend or coupon?egomeister said:
I'd say it remains pretty liquid if you want to sell the stuff
One way "liquid" at a ridiculous spread If anyone is tin foiling against an apocalyptic and chaotic once a century event, the government will surely try and prize the shiny stuff off you as Roosevelt did in 1934 and Modi in India more recently. How do you protect against capital controls like that?
Derek Chevalier said:
Mr Whippy said:
but that’s why it’s a good hedge because if they drop gold often goes the other way.
BUT, gold is in hand and relatively liquid, while money in the markets isn’t.
Just look at all the ‘liquid’ bonds freezing redemptions and so on.
Re gold being a good hedge, when everything was under pressure didn't it drop around 15% over the space of a week?BUT, gold is in hand and relatively liquid, while money in the markets isn’t.
Just look at all the ‘liquid’ bonds freezing redemptions and so on.
I'm not sure why you think money in the markets isn't liquid - I've seen lots of rebalancing going on during this period with no issues
What liquid bonds are you referring to?
But physical can’t even be provided to those who want to redeem it... nor can retailers supply it.
Supply/demand.
What isn’t liquid?
https://wolfstreet.com/2020/03/20/ten-real-estate-...
They’re not from what I’m reading.
Mr Whippy said:
Derek Chevalier said:
Mr Whippy said:
but that’s why it’s a good hedge because if they drop gold often goes the other way.
BUT, gold is in hand and relatively liquid, while money in the markets isn’t.
Just look at all the ‘liquid’ bonds freezing redemptions and so on.
Re gold being a good hedge, when everything was under pressure didn't it drop around 15% over the space of a week?BUT, gold is in hand and relatively liquid, while money in the markets isn’t.
Just look at all the ‘liquid’ bonds freezing redemptions and so on.
I'm not sure why you think money in the markets isn't liquid - I've seen lots of rebalancing going on during this period with no issues
What liquid bonds are you referring to?
But physical can’t even be provided to those who want to redeem it... nor can retailers supply it.
Supply/demand.
What isn’t liquid?
https://wolfstreet.com/2020/03/20/ten-real-estate-...
They’re not from what I’m reading.
https://uk.reuters.com/article/uk-britain-eu-prope...
But I've not seen anything untoward in the bond market (high yield and some MBS funds took a beating but that's a different story).
Behemoth said:
I wouldn't call gold liquid at the moment. Far from it. Refineries are widely shut, retail is pretty much sold out and physical settlement is proving so difficult that extraordinary measures are in place for shipping the stuff.
There are many stages to this crisis event and what gold or any other asset does largely depends on what stage we are in the process and what will now unfold. There's a rush to the dollar initially as a safe haven. Gold is being dumped along with everything else to pay for margin calls, cash crises, bankruptcies, what have you.
The question is what happens if things continue unwinding to a major deleveraging event, past recession and into a depression. What plays will central banks make to try and prevent this happening. What is the medium to long term effect of the unprecedented monetary inflation that they've already instigated. Thinking about a sensible hedge is perfectly reasonable under the circumstances. Sitting only in cash & stocks doesn't provide a hedge.
On the first point.There are many stages to this crisis event and what gold or any other asset does largely depends on what stage we are in the process and what will now unfold. There's a rush to the dollar initially as a safe haven. Gold is being dumped along with everything else to pay for margin calls, cash crises, bankruptcies, what have you.
The question is what happens if things continue unwinding to a major deleveraging event, past recession and into a depression. What plays will central banks make to try and prevent this happening. What is the medium to long term effect of the unprecedented monetary inflation that they've already instigated. Thinking about a sensible hedge is perfectly reasonable under the circumstances. Sitting only in cash & stocks doesn't provide a hedge.
When demand for physical is high but there is no supply because no one is selling, then the price should be higher.
But it’s not.
No one will pay a premium for physical when the paper price is lower.
But then people are weary of paper.
Physical is liquid, but no one is selling at the prices people think they should be buying at.
So physical has a value beyond paper. It’s not priced in. It’s cheap.
Its like bitcoin and a bitcoin etf.
Why you’d buy an etf when you can own the real thing digitally and more easily is beyond me.
Fair enough grain or orange juice... but an asset that takes up numbers you can store in your brain... hmmm.
egomeister said:
Derek Chevalier said:
TobyTR said:
and yet prices are relatively low - especially for silver hovering around $14.50 per oz.
How do you determine whether prices are high or low when it doesn't pay an income stream such as a dividend or coupon?https://en.wikipedia.org/wiki/Greater_fool_theory
egomeister said:
Derek Chevalier said:
TobyTR said:
and yet prices are relatively low - especially for silver hovering around $14.50 per oz.
How do you determine whether prices are high or low when it doesn't pay an income stream such as a dividend or coupon?TobyTR said:
egomeister said:
Derek Chevalier said:
TobyTR said:
and yet prices are relatively low - especially for silver hovering around $14.50 per oz.
How do you determine whether prices are high or low when it doesn't pay an income stream such as a dividend or coupon?Derek Chevalier said:
TobyTR said:
egomeister said:
Derek Chevalier said:
TobyTR said:
and yet prices are relatively low - especially for silver hovering around $14.50 per oz.
How do you determine whether prices are high or low when it doesn't pay an income stream such as a dividend or coupon?Gassing Station | Finance | Top of Page | What's New | My Stuff