The Gold enigma.

[The Old Bull]

Aren't gold certificates what paper money used to be? If you want to invest in gold then you need to be able to hold it in your hand.

[bradiston]

21 hours ago, blazes said:

I'm surprised that no one on this thread has mentioned the most obvious reason (among many) why gold has climbed so much in the last two years.

It relates to the American imposition of sanctions on Russia at the beginning of the Ukraine business.

When countries around the world with strong economies saw that the US was likely to suddenly freeze the assets of any country the US disapproved of, they began to organize against the same thing happening to them as happened to Russia.  So, the BRICS countries (Brazil, Russia, India, China, & S. Africa) began the process of setting up a payments' system in opposition to the dollar system that has prevailed since the end of WW2.
(The Brics countries have been joined, last year, officially by Egypt, Ethiopia, Iran and the UAE.)

 

Russia of course got around American sanctions by trading oil for Indian rupees or for Chinese yuan etc. That was the beginning.  It is already leading to a slight weakening of the dollar.

Much more dangerous for world peace & stability is an idea originating in Washington that (in order for Congress to finance the carnage in Ukraine) the US should SEIZE (that is, steal) $300 billion in US Treasuries that belong to Russia.  If that idea comes to fruition and the theft is committed, it will herald ...well, who knows what ...but the consequences could be extremely serious.

 

Nothing written here is secret or conspiratorial.  It's all easily available in numerous sources in financial and political journalism.

The debate is more to do with using the $300 billion to rebuild Ukraine. And quite rightly.

[blazes]

12 minutes ago, bradiston said:

The debate is more to do with using the $300 billion to rebuild Ukraine. And quite rightly.

 

It is not going to end peacefully if the US sets the precedent that it is OK to steal another country's property.  (As opposed, of course, to stealing it in warfare, of which history has millions of examples.)

 

There are billions of dollarsworth of infrastructure which American businesses have had to abandon in Russia in the last two years.  Stealing from the Russians will in effect forfeit all that infrastructure.  Maybe you're ok with that....but you do see the ramifications, right?

[bradiston]

4 hours ago, blazes said:

 

It is not going to end peacefully if the US sets the precedent that it is OK to steal another country's property.  (As opposed, of course, to stealing it in warfare, of which history has millions of examples.)

 

There are billions of dollarsworth of infrastructure which American businesses have had to abandon in Russia in the last two years.  Stealing from the Russians will in effect forfeit all that infrastructure.  Maybe you're ok with that....but you do see the ramifications, right?

Stealing from the Russians? Only Putin and his gang do that. It's not just the US that has come up with the idea of making Russia pay for their wilful destruction of Ukrainian infrastructure, and the poisoning of millions of hectares of agricultural land. The EU is also in support of this, and I'm sure Japan and all the other Western allies are in full agreement. Western investments in Russia were seized by the Kremlin and have probably been written off a long time ago. Now, we have $300 billion of their overseas holdings. That's like a down payment. The rest can come later.

 

 

[bradiston]

4 hours ago, bradiston said:

Stealing from the Russians? Only Putin and his gang do that. It's not just the US that has come up with the idea of making Russia pay for their wilful destruction of Ukrainian infrastructure, and the poisoning of millions of hectares of agricultural land. The EU is also in support of this, and I'm sure Japan and all the other Western allies are in full agreement. Western investments in Russia were seized by the Kremlin and have probably been written off a long time ago. Now, we have $300 billion of their overseas holdings. That's like a down payment. The rest can come later.

 

 

The best whoever it was commented on my post, can come up with is a sad emoji. How pathetic is that? Can't argue or won't argue? Illiterate maybe? Latest Kremlin briefing not arrived yet?

[swissie]

On 4/4/2024 at 4:00 AM, Mike Lister said:

I don't see that USD has weakened at all, in fact, the opposite seems true.

 

https://www.marketwatch.com/investing/index/dxy

Currency exchange rates do matter. I don't observe "currency baskets" much. But I do constantly watch 2 "hard currencies". The US$ versus the Swiss Franc.
Since the beginning of the year, the "hard currency" (Swiss Franc) has collapsed against the US$. US$ from 0.83 to 0.90. Signaling that the US$ universe is perfectly intact and above any doubt. Granted, the swiss national bank has eased interest rates by 1/4%, ahead of anyone else, but the collapse of the Swiss Franc started before that.

Conclusion: Official statements issued by central banks is one thing, but what they actually do in "the markets" is another thing. For private investors, it's another "enigma". More and more "enigmas" seem to emerge globally.

PS: Swiss investors have not made any money by investing in the US stock market lately.

 Truly, currency exchange rates DO matter.

[Yellowtail]

I think a lot of analysis went out the window with online trading. 

[swissie]

50 minutes ago, Yellowtail said:

I think a lot of analysis went out the window with online trading. 

More than that. Even minor banks and financial institutions today have their "financial experts". Guiding their "financial sheep" tru todays financial djungle. Thousands of "experts" giving daily advice on the internet for their "investor sheep", making good use of the fact that humans are "herd animals". Soon, the "financial experts" will outnumber the "investor sheep".

When things turn south, the commom explanation will be (as usual) "nobody has seen it coming", while having collected fat bonuses before things went south. Easy for me to find a thousand "experts" recommending to buy Gold, versus a thousand "experts" recommending to sell Gold. Needless to say that I don't like "financial experts".

The old joke comes to mind: "Look at all the yachts of the financial experts. But where are the yachts if their customers"?

[Mike Lister]

For @swissie in particular:

 

The link below may be behind a paywall for you, in which case, there are some work arounds so PM me. 

 

Ambrose Evans Pritchard is the author, he's a superbly qualified economist but a bit of doom monger at times. Anyway, he picked up on the price of gold and asks the question, why and who? It's not normal buying by any means, he researched that. It's not a Western institution and it's NOT a Central Bank, it's somebody with deep pockets who is not price sensitive, Ambrose concludes it's China but doing so covertly. Why? WWIII, government deficits, over leveraging by governments, USD sinking into the sunset.....many possible answers. A good read.

 

 

https://www.telegraph.co.uk/business/2024/04/16/gold-price-surge-china-warchest-geopolitical-dystopia/

[swissie]

On 4/4/2024 at 1:11 AM, Srikcir said:

"Here's Why Gold Is At A Record High - Forbes"

"Gold has added 394% in value over the past 20 years, according to FactSet data, below the S&P 500's 522% return over the two-decade period, but still a remarkable feat considering gold is an inorganic material without the potential to return profits to shareholders as a stock would."  Mar 9, 2567 BE  https://www.forbes.com

Here is a problem. One can not store Gold for free, unless one stores physical Gold under the matress.

Be it futures, ETF's or other instruments, there is always a "carrying charge". Even storing Gold in a safety deposit box at the bank costs an annual fee.

Just assuming that over the last 20 years an annual "carrying charge" of a modest 3% would have applyed, with compound interest and missed interest by other investements, (missed opportunity cost) the above quoted (theoretical) 394% gain of Gold would be greatly diminished.  = Warren Buffet never liked Gold.

The price of Gold doesn't follow financial/world events tick by tick. Lenghty periods of "dormancy" can be observed. Only to readjust on quick periodical strong "outbursts" on the upside. I believe such a corrective "outburst on the upside" is currently taking place. To be followed by a lenghty period of relative "dormancy" again.

 

[swissie]

On 4/4/2024 at 12:45 PM, Skeptic7 said:

I hear ya...but been waiting since 1980. 🤣

Did sell some then. But bought a lot more for years after that, dirt cheap. Should have sold in 2011. Don't need the cash, just want to off-load it. Clearing out the clutter. 

Compared to Gold, Silver is plentyful and therefore relatively cheap. Comperatively "little money" can move the price of Silver over proportionally. Always remembering the "Hunt Brothers", cornering the market with the help of the former broker "Prudential Bache".

Unless somebody new corners the market again, I can not see the price of Silver hitting 50$ per ounce again during my livetime.

 

[swissie]

16 hours ago, Mike Lister said:

For @swissie in particular:

 

The link below may be behind a paywall for you, in which case, there are some work arounds so PM me. 

 

Ambrose Evans Pritchard is the author, he's a superbly qualified economist but a bit of doom monger at times. Anyway, he picked up on the price of gold and asks the question, why and who? It's not normal buying by any means, he researched that. It's not a Western institution and it's NOT a Central Bank, it's somebody with deep pockets who is not price sensitive, Ambrose concludes it's China but doing so covertly. Why? WWIII, government deficits, over leveraging by governments, USD sinking into the sunset.....many possible answers. A good read.

 

 

https://www.telegraph.co.uk/business/2024/04/16/gold-price-surge-china-warchest-geopolitical-dystopia/

Yes indeed, I was confronted with some obstacles, trying to access this site. Never heard about a Mr. Pritchard. But still interested.

Seems to me, China is publizising it's Gold purchases quite openly. To support it's currency after the mayham followed by their invasion of Taiwan? I don't think they accumulate their Gold to shoot at the Taiwanese with golden bullets.

 

[lkn]

6 hours ago, swissie said:

Seems to me, China is publizising it's Gold purchases quite openly. To support it's currency after the mayham followed by their invasion of Taiwan? I don't think they accumulate their Gold to shoot at the Taiwanese with golden bullets.

Right, China is hardly doing this covertly.

 

And even without plans to invade Taiwan (and risk getting all their USD frozen, as we saw with Russia after their invasion of Ukraine), there is increasing tension between the U.S. and China, so it’s not really that surprising, that China wants less exposure to USD, and for them, gold is probably the second best thing.

[Mike Lister]

1 hour ago, lkn said:

Right, China is hardly doing this covertly.

 

And even without plans to invade Taiwan (and risk getting all their USD frozen, as we saw with Russia after their invasion of Ukraine), there is increasing tension between the U.S. and China, so it’s not really that surprising, that China wants less exposure to USD, and for them, gold is probably the second best thing.

Exactly that, they learned the lesson from Russia. If you sit back quietly and do enough watching and learning, a small move can win the game.

[Skeptic7]

9 hours ago, swissie said:

Compared to Gold, Silver is plentyful and therefore relatively cheap. Comperatively "little money" can move the price of Silver over proportionally. Always remembering the "Hunt Brothers", cornering the market with the help of the former broker "Prudential Bache".

Unless somebody new corners the market again, I can not see the price of Silver hitting 50$ per ounce again during my livetime.

 

Agreed. Pushing $30 now and looking to dump it. Keep a couple of Carson City Silver Dollars and offload the rest.

[Yellowtail]

12 hours ago, swissie said:

Here is a problem. One can not store Gold for free, unless one stores physical Gold under the matress.

Be it futures, ETF's or other instruments, there is always a "carrying charge". Even storing Gold in a safety deposit box at the bank costs an annual fee.

Just assuming that over the last 20 years an annual "carrying charge" of a modest 3% would have applyed, with compound interest and missed interest by other investements, (missed opportunity cost) the above quoted (theoretical) 394% gain of Gold would be greatly diminished.  = Warren Buffet never liked Gold.

The price of Gold doesn't follow financial/world events tick by tick. Lenghty periods of "dormancy" can be observed. Only to readjust on quick periodical strong "outbursts" on the upside. I believe such a corrective "outburst on the upside" is currently taking place. To be followed by a lenghty period of relative "dormancy" again.

 

Perhaps not for free, but at $2,300, a million dollars' worth of gold weighs a bit over 13.5kg, and has a volume of about 700ml, so it can fit easily in a bank safe deposit box. 

 

My safe deposit box in the US was free, and I think it's around 2,500 a year for the one we have at Krunsri. 

 

So, it would cost less than 0.007% to store it in Thailand. 

 

Actually, if the box was close enough to the floor where you could drag it out, you could probably store $6M in gold in it. 

[swissie]

On 4/18/2024 at 5:19 AM, Yellowtail said:

Perhaps not for free, but at $2,300, a million dollars' worth of gold weighs a bit over 13.5kg, and has a volume of about 700ml, so it can fit easily in a bank safe deposit box. 

 

My safe deposit box in the US was free, and I think it's around 2,500 a year for the one we have at Krunsri. 

 

So, it would cost less than 0.007% to store it in Thailand. 

 

Actually, if the box was close enough to the floor where you could drag it out, you could probably store $6M in gold in it. 

What you pay for your safety deposit box at Krunsri is very reasonable. Congrats!
Of course it's all relative. If only 1 oz of Gold is stored, the carrying charge would be close to 3%.
--------------------------------
PS: In case you store 1 Mill $ worth of Gold in your safety deposit box, I would like to suck up to you. I make for a great pal, I sing and dance like Fred Astair. I tell funny jokes and sell snake oil on the side. I can mow your lawn and give professional massages to the female members of your family. We could sit together and wach the markets while sipping liberal amounts of beer. How's that?

[Yellowtail]

21 minutes ago, swissie said:

What you pay for your safety deposit box at Krunsri is very reasonable. Congrats!
Of course it's all relative. If only 1 oz of Gold is stored, the carrying charge would be close to 3%.
--------------------------------
PS: In case you store 1 Mill $ worth of Gold in your safety deposit box, I would like to suck up to you. I make for a great pal, I sing and dance like Fred Astair. I tell funny jokes and sell snake oil on the side. I can mow your lawn and give professional massages to the female members of your family. We could sit together and wach the markets while sipping liberal amounts of beer. How's that?

Yeah, if you're "investing" in 1 ounce of gold, just buy a necklace. 

 

And of course, one can keep any number of other things in a safety box. I had one long before I bought any investment gold. 

 

How are you doing with your roulette investments? 

[swissie]

1 hour ago, Yellowtail said:

Yeah, if you're "investing" in 1 ounce of gold, just buy a necklace. 

 

And of course, one can keep any number of other things in a safety box. I had one long before I bought any investment gold. 

 

How are you doing with your roulette investments? 

I am so disthrought. If only you would read my posts more carefully. By doing so, you would have noticed that I used "Roulette" only within the context of "mathematics". I don't do roulette, but I do "ruthless trading" far away from any roulette table on occasion. (With playing money only).

With regard to my post above: I would be interested to know what you store in your safety deposit box next to Gold. With the right "content" of your safety box, I might still want to "suck up to you". Come on, spill your guts.

To verify: Is your handle truly "yellowtail"? If "yellowsnail", I would have to reconsider my generous offer.

[Yellowtail]

3 minutes ago, swissie said:

I am so disthrought. If only you would read my posts more carefully. By doing so, you would have noticed that I used "Roulette" only within the context of "mathematics". I don't do roulette, but I do "ruthless trading" far away from any roulette table on occasion. (With playing money only).

Yeah, you were the one that claimed (falsely) that you could get 50-50 odds playing roulette, yes? So much for mathematics. 

3 minutes ago, swissie said:

With regard to my post above: I would be interested to know what you store in your safety deposit box next to Gold. With the right "content" of your safety box, I might still want to "suck up to you". Come on, spill your guts.

Being the heaviest, gold is on the bottom.  

3 minutes ago, swissie said:

To verify: Is your handle truly "yellowtail"? If "yellowsnail", I would have to reconsider my generous offer.

Is it swissie or swishy?

[swissie]

10 minutes ago, Yellowtail said:

Yeah, you were the one that claimed (falsely) that you could get 50-50 odds playing roulette, yes? So much for mathematics. 

Being the heaviest, gold is on the bottom.  

Is it swissie or swishy?

It's "swissie", for better or for worse.

Question: Next to your valuables, have you locked your sense of humor in your safety deposit box as well?

[swissie]

On 4/17/2024 at 11:02 PM, lkn said:

Right, China is hardly doing this covertly.

 

And even without plans to invade Taiwan (and risk getting all their USD frozen, as we saw with Russia after their invasion of Ukraine), there is increasing tension between the U.S. and China, so it’s not really that surprising, that China wants less exposure to USD, and for them, gold is probably the second best thing.

All very well observed,
not to forget, that before "tensions" between the US and China arose, China parked massive amounts of their "export surplus money" in US T-Bills/US T-bonds. Financing a good part of the US budget deficits.

Absurdity total: Without the Chinese influx of "surplus money", the US defence of Taiwan would possibly have to be financed by tax increases by US citizens. No way, as no US polititian would be re- elected proposing something like that. (Another Vietnam, with a peaking inflation rate of 15 % in the middle of the 1970 ties?)

To impose sanctions agaist China? Great idea! Meaning that the Chinese will even buy less US T-Bonds, and affordable Chinese consumer goods will no more enter the shores of the US. The consumer goods that the US Industry can produce (if at all possible) will cost 30% more than the Chinese imports, further accelerating the impoverishement of the "lower-class" of Americans.

The future looks bright, unfortunately not for the US/European economical universe.

 

[Mike Lister]

Apparently, the answer to why gold price is rising and who is buying, is, the Chinese retail market, the small guys, not the big ones.

 

https://www.mining.com/web/golds-record-setting-rally-may-have-its-roots-in-chinese-frenzy/#:~:text=Stock image.,explanation may lie in China.

[Yellowtail]

11 minutes ago, Mike Lister said:

Apparently, the answer to why gold price is rising and who is buying, is, the Chinese retail market, the small guys, not the big ones.

 

https://www.mining.com/web/golds-record-setting-rally-may-have-its-roots-in-chinese-frenzy/#:~:text=Stock image.,explanation may lie in China.

So where does it stop oh wise one? 

 

[Mike Lister]

3 minutes ago, Yellowtail said:

So where does it stop oh wise one? 

 

My crystal ball is on holiday in The Maldives, I'll ask when it returns. 🙂

[Yellowtail]

12 minutes ago, Mike Lister said:

My crystal ball is on holiday in The Maldives, I'll ask when it returns. 🙂

Have it bring back a double order of  kukulhu riha for me....