basjke Posted October 20, 2008 Share Posted October 20, 2008 GOLD is the currency of last resort. it is the ultimate safe haven. In the Weimar situation Germany 1923 gold was the only way people could preserve their wealth. If you want to hold currencies then swiss franc, chinese Yuan or maybe Singapore dollars(not sure about the SGD). Once the current deleveraging ends gold will soar and cash will be trash.good luck to you. BTW check out the Iceland situation. If the govt. or people held gold they wouldn't be in their current predicament. Dream on Captain.... people seem to forget what happened since 1923... In 1923 the world population was less then 2 Billion. 85 years later we have 6,7 Billion people (estimated Oct 2008) walking around the same good old globe. Next to that the amount of gold, available, will never be enough to satisfy the demand if it would replace currencies. Dream on about Utopia. LaoPo Am I missing something?There will never be enough gold available to satisfy the demand.That will make it always more valuable isn't it. Link to comment Share on other sites More sharing options...
LaoPo Posted October 20, 2008 Share Posted October 20, 2008 GOLD is the currency of last resort. it is the ultimate safe haven. In the Weimar situation Germany 1923 gold was the only way people could preserve their wealth. If you want to hold currencies then swiss franc, chinese Yuan or maybe Singapore dollars(not sure about the SGD). Once the current deleveraging ends gold will soar and cash will be trash.good luck to you. BTW check out the Iceland situation. If the govt. or people held gold they wouldn't be in their current predicament. Dream on Captain.... people seem to forget what happened since 1923... In 1923 the world population was less then 2 Billion. 85 years later we have 6,7 Billion people (estimated Oct 2008) walking around the same good old globe. Next to that the amount of gold, available, will never be enough to satisfy the demand if it would replace currencies. Dream on about Utopia. LaoPo Am I missing something?There will never be enough gold available to satisfy the demand.That will make it always more valuable isn't it. Yes, you missed something; the last part of that sentence: "....gold, available....will never be enough to satisfy the demand if it would replace currencies." LaoPo Link to comment Share on other sites More sharing options...
bartender100 Posted October 21, 2008 Share Posted October 21, 2008 On the gold debate this has always amused me about our unelected Great leader . "Gordon Brown has been accused of costing Britain more than £2 billion over his decision to sell off more than half of the country's gold reserves at historically low prices. The Sunday Times alleges that the chancellor ignored advice from the Bank of England in a series of bullion auctions between 1999 and 2002. According to bank insiders, the 400 tons of gold were sold during a slump in the market, with prices sinking to their lowest in 20 years." Britain has kept 310.8 tonnes of gold, worth $5.6 billion, a relatively small holding compared with most Western European countries. Gold reserves make up 11.6 per cent of the UK’s total foreign reserves. When the dust settles there will be a big "squeeze", as they used to call it in the 60's, on the populous Link to comment Share on other sites More sharing options...
Pakboong Posted October 21, 2008 Share Posted October 21, 2008 GOLD is the currency of last resort. it is the ultimate safe haven. In the Weimar situation Germany 1923 gold was the only way people could preserve their wealth. If you want to hold currencies then swiss franc, chinese Yuan or maybe Singapore dollars(not sure about the SGD). Once the current deleveraging ends gold will soar and cash will be trash.good luck to you. BTW check out the Iceland situation. If the govt. or people held gold they wouldn't be in their current predicament. Dream on Captain.... people seem to forget what happened since 1923... In 1923 the world population was less then 2 Billion. 85 years later we have 6,7 Billion people (estimated Oct 2008) walking around the same good old globe. Next to that the amount of gold, available, will never be enough to satisfy the demand if it would replace currencies. Dream on about Utopia. LaoPo There is less than $5 trillion worth of gold above ground in the world. Link to comment Share on other sites More sharing options...
Pakboong Posted October 21, 2008 Share Posted October 21, 2008 Silver is more interesting than gold. It cost about $14 per ounce to mine it and it is, unlike gold, regularly consumed. The price of silver today is less than $10. Go figure. Link to comment Share on other sites More sharing options...
Naam Posted October 21, 2008 Share Posted October 21, 2008 Silver is more interesting than gold. It cost about $14 per ounce to mine it and it is, unlike gold, regularly consumed. The price of silver today is less than $10. Go figure. says who? Link to comment Share on other sites More sharing options...
Pakboong Posted October 21, 2008 Share Posted October 21, 2008 Silver is more interesting than gold. It cost about $14 per ounce to mine it and it is, unlike gold, regularly consumed. The price of silver today is less than $10. Go figure. says who? David Morgan, www.silver-investor.com Link to comment Share on other sites More sharing options...
Pakboong Posted October 21, 2008 Share Posted October 21, 2008 http://www.silverbearcafe.com/private/9.08/demand.html Naam this is not the specific article from which I pulled the information regarding silver, It has been a while and I will keep digging but much of the info is in the link above. Link to comment Share on other sites More sharing options...
ray23 Posted October 21, 2008 Share Posted October 21, 2008 You know the sad part in researching the history tells me this will end it also tells me there will be another and a another. Lao is correct information moves faster and to places that wouldn't have been dreamed of as a little as 30 years ago. To have the information available to us today yuo would have had to been a part of the system. that has it's good points and bad. Good it's easy to stay informed, bad you may have the information but not the knowledge to process it correctly. Link to comment Share on other sites More sharing options...
pkrv Posted October 21, 2008 Author Share Posted October 21, 2008 I am no economist but am a reasonably bright individual - I looked up Bretton Woods. http://en.wikipedia.org/wiki/Bretton_Woods_system I think I now understand why the USD is doing well. Basically it is the currency countries must pay all debts in, I think this is true? I certainly understand it is the currency you must buy oil in. But isn't there an awfull lot of USD about? In an aging society it is not possible for us all to remain in debt. I think I now understand why Naam talks about his wifes farm on this thread. It is entirely correct. Unfortunately my SIPP pension will not allow me to buy such things - bugger! (technical term). Link to comment Share on other sites More sharing options...
Naam Posted October 21, 2008 Share Posted October 21, 2008 Silver is more interesting than gold. It cost about $14 per ounce to mine it and it is, unlike gold, regularly consumed. The price of silver today is less than $10. Go figure. says who? David Morgan, www.silver-investor.com Pakboong, my strong doubts are based on my pragmatic view at silver mining shares. this is what i found in Kitco: "in its latest annual survey of the silver market for the Silver Institute, independent analysts GFMS Ltd report that the weighted average production costs in 2006 at primary silver mines dropped to $2.74/ounce, down a hefty 51 cents or 16% from the average of $3.25/ounce in 2005" Link to comment Share on other sites More sharing options...
Naam Posted October 21, 2008 Share Posted October 21, 2008 (edited) I am no economist but am a reasonably bright individual - I looked up Bretton Woods. http://en.wikipedia.org/wiki/Bretton_Woods_system I think I now understand why the USD is doing well. Basically it is the currency countries must pay all debts in, I think this is true? I certainly understand it is the currency you must buy oil in. But isn't there an awfull lot of USD about? In an aging society it is not possible for us all to remain in debt. I think I now understand why Naam talks about his wifes farm on this thread. It is entirely correct. Unfortunately my SIPP pension will not allow me to buy such things - bugger! (technical term). edited to avoid any mistunderstanding. of course "it is the currency countries must pay all debts" is incorrect as the Bretton Woods system was abandoned more than 30 years ago. Edited October 21, 2008 by Naam Link to comment Share on other sites More sharing options...
pkrv Posted October 21, 2008 Author Share Posted October 21, 2008 Hi all,I would like to thank you all for contributing to this very informative thread. One thing I do not understand. ING is saying they do not have any financial problems. So why do they need a 10 Billion Euro capital injection? I just do not get it. Can someone please explain it in simple words? Ok I am going to take a stab at replying to your question. After reading one of the replies and following the link I think I now have a small grasp of this 'fractional reserve lending' ojemflick type thing. BTW I went back and re-read every post based on my new understanding of how things work. How odd that this is not a basic part of our educational system. http://video.google.com/videoplay?docid=-9050474362583451279 The goverment did not actually inject 10 Billion to ING they attempted to inject somewhere between 100 and 300 Billion, which of course does not exist. It was done essentially to promote lending because this is where the extra 90 to 290 billion comes from. But we are an aging population and we do not necessarily wish to borrow. Either this has not been grasped or certain people are addicted. A collision course has been set. That iceberg did just leap out of the water and attack us. OK Naam and cocopops I challenge you to flame me in my analysis. Link to comment Share on other sites More sharing options...
Naam Posted October 21, 2008 Share Posted October 21, 2008 The goverment did not actually inject 10 Billion to ING they attempted to inject somewhere between 100 and 300 Billion, which of course does not exist.OK Naam and cocopops I challenge you to flame me in my analysis. no challenge, therefore no flaming fact: the Dutch Government will inject € 10bb (real money) into ING. the deal is against preferred shares paying 8.50% p.a. and two seats on the supervisory board. Link to comment Share on other sites More sharing options...
pkrv Posted October 21, 2008 Author Share Posted October 21, 2008 I am no economist but am a reasonably bright individual - I looked up Bretton Woods. http://en.wikipedia.org/wiki/Bretton_Woods_system I think I now understand why the USD is doing well. Basically it is the currency countries must pay all debts in, I think this is true? I certainly understand it is the currency you must buy oil in. But isn't there an awfull lot of USD about? In an aging society it is not possible for us all to remain in debt. I think I now understand why Naam talks about his wifes farm on this thread. It is entirely correct. Unfortunately my SIPP pension will not allow me to buy such things - bugger! (technical term). edited to avoid any mistunderstanding. of course "it is the currency countries must pay all debts" is incorrect as the Bretton Woods system was abandoned more than 30 years ago. Thanks sorry we posted almost at the same time - except for the 'fractional reserve lending' ojemflick type thing? Some posters have stated that the US Debt is less than European Debt does this have a bearing? Link to comment Share on other sites More sharing options...
pkrv Posted October 21, 2008 Author Share Posted October 21, 2008 The goverment did not actually inject 10 Billion to ING they attempted to inject somewhere between 100 and 300 Billion, which of course does not exist.OK Naam and cocopops I challenge you to flame me in my analysis. no challenge, therefore no flaming fact: the Dutch Government will inject € 10bb (real money) into ING. the deal is against preferred shares paying 8.50% p.a. and two seats on the supervisory board. And the real money bit was the clever part right! Link to comment Share on other sites More sharing options...
Naam Posted October 21, 2008 Share Posted October 21, 2008 The goverment did not actually inject 10 Billion to ING they attempted to inject somewhere between 100 and 300 Billion, which of course does not exist.OK Naam and cocopops I challenge you to flame me in my analysis. no challenge, therefore no flaming fact: the Dutch Government will inject € 10bb (real money) into ING. the deal is against preferred shares paying 8.50% p.a. and two seats on the supervisory board. And the real money bit was the clever part right! yes, i think so. the government pays an average of 3.50% on its 1-10 year maturities and gets 8.50% from ING and the 5% difference is the beef Link to comment Share on other sites More sharing options...
Naam Posted October 21, 2008 Share Posted October 21, 2008 I am no economist but am a reasonably bright individual - I looked up Bretton Woods. http://en.wikipedia.org/wiki/Bretton_Woods_system I think I now understand why the USD is doing well. Basically it is the currency countries must pay all debts in, I think this is true? I certainly understand it is the currency you must buy oil in. But isn't there an awfull lot of USD about? In an aging society it is not possible for us all to remain in debt. I think I now understand why Naam talks about his wifes farm on this thread. It is entirely correct. Unfortunately my SIPP pension will not allow me to buy such things - bugger! (technical term). edited to avoid any mistunderstanding. of course "it is the currency countries must pay all debts" is incorrect as the Bretton Woods system was abandoned more than 30 years ago. Thanks sorry we posted almost at the same time - except for the 'fractional reserve lending' ojemflick type thing? Some posters have stated that the US Debt is less than European Debt does this have a bearing? is some posters claim that they should define what exactly they mean by "U.S. debt" and "European debt" Link to comment Share on other sites More sharing options...
Pakboong Posted October 21, 2008 Share Posted October 21, 2008 (edited) Silver is more interesting than gold. It cost about $14 per ounce to mine it and it is, unlike gold, regularly consumed. The price of silver today is less than $10. Go figure. says who? David Morgan, www.silver-investor.com Pakboong, my strong doubts are based on my pragmatic view at silver mining shares. this is what i found in Kitco: "in its latest annual survey of the silver market for the Silver Institute, independent analysts GFMS Ltd report that the weighted average production costs in 2006 at primary silver mines dropped to $2.74/ounce, down a hefty 51 cents or 16% from the average of $3.25/ounce in 2005" You may well be correct. My view is based upon Morgan's logic that 75% of silver is mined as a bi-product of mining of other metals which are more cost effective to mine. Primary silver mining, according to Morgan is too expensive with the current dollar value of silver. I don't know and Morgan didn't specify, whether or not the $14 per ounce was based upon a new primary mine start up or existing mining operations. I could not find the article. It is several months old. Edited October 21, 2008 by Pakboong Link to comment Share on other sites More sharing options...
BEENTHEREDONETHAT Posted October 21, 2008 Share Posted October 21, 2008 Coeur d' Alene minea in north Idaho is the worlds largest silver mining co. based in the US. They also have mines in Mexico, Bolivia and Alaska. It is principally a silver mining co with gold as a secondary product. Link to comment Share on other sites More sharing options...
pkrv Posted October 21, 2008 Author Share Posted October 21, 2008 (edited) The goverment did not actually inject 10 Billion to ING they attempted to inject somewhere between 100 and 300 Billion, which of course does not exist.OK Naam and cocopops I challenge you to flame me in my analysis. no challenge, therefore no flaming fact: the Dutch Government will inject € 10bb (real money) into ING. the deal is against preferred shares paying 8.50% p.a. and two seats on the supervisory board. And the real money bit was the clever part right! yes, i think so. the government pays an average of 3.50% on its 1-10 year maturities and gets 8.50% from ING and the 5% difference is the beef True: But basically the government with a mere 10 billion also conjured up an extra 90 to 290 billion. All this is short term stuff – That particular system will only work in an infinitely growing world – no wonder falling birth rates are headline news. Edited October 21, 2008 by pkrv Link to comment Share on other sites More sharing options...
LaoPo Posted October 21, 2008 Share Posted October 21, 2008 The goverment did not actually inject 10 Billion to ING they attempted to inject somewhere between 100 and 300 Billion, which of course does not exist.OK Naam and cocopops I challenge you to flame me in my analysis. no challenge, therefore no flaming fact: the Dutch Government will inject € 10bb (real money) into ING. the deal is against preferred shares paying 8.50% p.a. and two seats on the supervisory board. And the real money bit was the clever part right! yes, i think so. the government pays an average of 3.50% on its 1-10 year maturities and gets 8.50% from ING and the 5% difference is the beef It's a bit different...Finance Minister Wouter Bos has to borrow the money himself also and pays 4,5% leaving 4% which is still nice. The interest payments however only start when in a certain year a dividend is paid to the shareholders. That's not such a problem (but could become one in the future) because this year ING already paid a dividend (very strong company...still) so next year May 2009 Bos can expect his first interest payment. BUT.....the nicest slice of beef could be the deal that if ING pays back (promised to do so within 3 years) the € 10 Billion......the sum becomes € 15 Billion (with a premium of 50%) if the share price is above the € 15/share. If it's lower than € 15/share the Government can be paid in shares (between € 10 and 15/share) If the share is lower than € 10 the Government will get just the € 10 Billion back (with or without interest; without in case the situation for ING gets worse and NO dividend is paid at all). If ING falls over, the government will lose the € 10 Billion and the bill will be presented to Jan-Wooden-Shoes-who-eats-cheese-every-day LaoPo Link to comment Share on other sites More sharing options...
pkrv Posted October 22, 2008 Author Share Posted October 22, 2008 Mulling all this over and my new found knowledge of 'fractional reserve lending' (lets call it frl for short) let me see 1) Most people are quite prudent with money and in a aging socity tend to pay off debts - hence this frl thing is screwed. 2) The sub prime market is the market you don't lend to because they cannot actually repay. But by lending to it, it did temporarily pump 90 to 290 more back into the system so there was actually now money, in the system (sort of) - outcome to be determined (I think this also screws frl) 3) We are going into recession - people take out less loans in recession - hence this frl is again screwed. 4) people are now retiring and want money back out the system - again this frl thing is screwed. Yes for me cash and a roof over my head is a good bet. I think that the recession will last until we have a new, stable AND TRANSPARENT mechanism of lending money http://news.bbc.co.uk/1/hi/business/7682723.stm "It also warned that if the government's £50bn banking bail-out did not succeed, the recession could be even deeper and longer. " Link to comment Share on other sites More sharing options...
Gravelrash Posted October 24, 2008 Share Posted October 24, 2008 Ironically, if the mainstream population (say in America) were to believe their currency could be debased to near nothingness, people would be out buying those "distressed" properties immediately, and would put a floor under the housing sector, which was the source of the panic. That wouldn't quell the derivatives monster however. Good observation actually, some truth to that. But we can't let the markets crash now can we? Link to comment Share on other sites More sharing options...
Gravelrash Posted October 24, 2008 Share Posted October 24, 2008 The last time I was aware of a western country printing money and lowering interest rates was Germany between WW1 and WW2. All savings were deliberately annihilated (with huge social consequences) to effectively end German debts from WW1.Will the same happen again in terms of wiping out cash savings – my thoughts are yes it will, but what to do about it? You have a good memory, do you remember the burning of the Reichstag as well? Link to comment Share on other sites More sharing options...
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