Where Is Gold Going In This Market

[letitbe]

Commodities in deflation discussion -

http://theautomatice...dities-and.html

While not explicitly addressed here IMO gold as a form of money will be a useful store of capital in a deflation. Any debt-based asset or business will not be.

in a real deflation cash is king.

very true but only if deflation lasts for a long time Personally ill nail my colours mostly to what I consider for long long term a non brainer (i mean 10-20years +) thats property although Japans experience argues it can be wrong Ups and downs for 40 years ive never seen rental income go down much for any medium term period and mostly keeps up or does better than inflation even if nominal value drops 30-40% or more. Gold and Silver are useless longer term since they give no income nut at moment until bubble really busts im happy to keep 20% or so in PM and keep as little currency as I can get away with. The only other non brainer in today world is to be as diversified as you can over different countries. We have 1/3rd in UK and USA 1/3rd here and 1/3rd in Singapore and Hong Kong and I recommend anyone else to spread it around if they want to maximise chance of preserving their wealth

[letitbe]

metals makes sense for me which is why I invested in spotmex ...especially after Gainesville, Tulving, Monarch and APMEX don't want my business

What was the problem with the merchants you mentioned?

Did they not want to ship to Thailand?

Spotmex has some crazy high premiums

Also they sound like a bizzaro Ebay with less protection.

For instance.....From their FAQ

How does SPOTMEX handle disputes?

While SPOTMEX does its best to handle disputes amicably, if a dispute cannot be resolved, SPOTMEX reserves the right to release the contact details of the disputing parties to each other for resolution outside of SPOTMEX.

theirs VAt GSP on any silver brought into Thailand at 7% and I cant find any supplier worldwide who is not charging at least 4% normally 708% above london fix. Please explain what you mean by spotmex I buy here at around 3% above london or new york spot price but its pellets and not easily tradable elsewhere in world. All dealers ive searched wordwide as I say charge 4-8% above spot and best will pay 98% of spot to buy back. Most countries have VAT or GSP on Silver bullion and in UK 20% USA Canada and I believe Hong Kong dont but that means flying to those places and getting a safe deposit box. You cant really trust bullian dealers who say they will store for you anymore than guarantees given by PHag ETf and rest which claim its all backed by PM in vaults in London Zurich or New York

[Naam]

We all know where its going.

We do?

of course we do. if it's not going sideways it will either go up or down.

[Naam]

The only other non brainer in today world is to be as diversified as you can over different countries. We have 1/3rd in UK and USA 1/3rd here and 1/3rd in Singapore and Hong Kong and I recommend anyone else to spread it around if they want to maximise chance of preserving their wealth

who or what is "it"?

[gregb]

We all know where its going.

We do?

Of course we do. We just don't know when, and how many of us here will still be alive when it happens.

[gregb]

Commodities in deflation discussion -

http://theautomaticearth.blogspot.com/2011/10/october-3-2011-commodities-and.html

While not explicitly addressed here IMO gold as a form of money will be a useful store of capital in a deflation. Any debt-based asset or business will not be.

in a real deflation cash is king.

Define "real deflation"? We have seen price deflation vs. gold for the last 10 years. I see no reason this trend won't continue, despite brief corrections. Does that mean gold is "real cash"?

The global industrial economy has to shrink dramatically before the value of industrial output is ever going to rise against currencies that aren't being debased, and gold is the chief among these. We already have deflation. Fiat "cash" is simply being devalued faster than prices can fall.

[Naam]

We have seen price deflation vs. gold for the last 10 years. I see no reason this trend won't continue, despite brief corrections. Does that mean gold is "real cash"?

10 years = yawwnnnn... what about 30 years? what about comparing gold vs. investment that generated yield over a long periods of time when gold generated zilch? it's not rocket science doing these comparisons. but of course no goldbug is interested in them.

in one of today's posted links some clown noted that the dollar lost 98% since the year 1900 whereas the purchase power of gold increased 75 times. food for the brain-amputated! did the invested dollars not generate a heap of dollars over that period of 111 years?

[midas]

We have seen price deflation vs. gold for the last 10 years. I see no reason this trend won't continue, despite brief corrections. Does that mean gold is "real cash"?

10 years = yawwnnnn... what about 30 years? what about comparing gold vs. investment that generated yield over a long periods of time when gold generated zilch? it's not rocket science doing these comparisons. but of course no goldbug is interested in them.

in one of today's posted links some clown noted that the dollar lost 98% since the year 1900 whereas the purchase power of gold increased 75 times. food for the brain-amputated! did the invested dollars not generate a heap of dollars over that period of 111 years?

Mr Hiro in Tokyo was telling me he would have been very pleased to put all this money on the shiny metal in 1990

instead of the stock market

[letitbe]

The only other non brainer in today world is to be as diversified as you can over different countries. We have 1/3rd in UK and USA 1/3rd here and 1/3rd in Singapore and Hong Kong and I recommend anyone else to spread it around if they want to maximise chance of preserving their wealth

who or what is "it"?

ok their money if they have any sorry I often assume a statement is obvious but im often amazed that its not

[letitbe]

We have seen price deflation vs. gold for the last 10 years. I see no reason this trend won't continue, despite brief corrections. Does that mean gold is "real cash"?

10 years = yawwnnnn... what about 30 years? what about comparing gold vs. investment that generated yield over a long periods of time when gold generated zilch? it's not rocket science doing these comparisons. but of course no goldbug is interested in them.

in one of today's posted links some clown noted that the dollar lost 98% since the year 1900 whereas the purchase power of gold increased 75 times. food for the brain-amputated! did the invested dollars not generate a heap of dollars over that period of 111 years?

Yawwnnnnn do you have to point out obvious your comment adds nothing much like your comments about others postings you can take any period and prove anything but its not a worth while comment. The ops observation is perfectly valid and as valid as property increases against currency for last 30+ years ok Naam your very clever at quick rebutes but often contribute nothing but tripe to any discussion

[Naam]

We have seen price deflation vs. gold for the last 10 years. I see no reason this trend won't continue, despite brief corrections. Does that mean gold is "real cash"?

10 years = yawwnnnn... what about 30 years? what about comparing gold vs. investment that generated yield over a long periods of time when gold generated zilch? it's not rocket science doing these comparisons. but of course no goldbug is interested in them.

in one of today's posted links some clown noted that the dollar lost 98% since the year 1900 whereas the purchase power of gold increased 75 times. food for the brain-amputated! did the invested dollars not generate a heap of dollars over that period of 111 years?

Yawwnnnnn do you have to point out obvious your comment adds nothing much like your comments about others postings you can take any period and prove anything but its not a worth while comment. The ops observation is perfectly valid and as valid as property increases against currency for last 30+ years ok Naam your very clever at quick rebutes but often contribute nothing but tripe to any discussion

what did you contribute? the wisdom that property increased against currency for the last 30+ years? another lame claim assuming that currency was kept under a mattress for 30 years. give me a break please and add something of substance (as i did).

any open or subtle wishi-washi claims that owning "fiat currency" instead of "property" never paid are nothing but ridiculous.

[Naam]

We have seen price deflation vs. gold for the last 10 years. I see no reason this trend won't continue, despite brief corrections. Does that mean gold is "real cash"?

10 years = yawwnnnn... what about 30 years? what about comparing gold vs. investment that generated yield over a long periods of time when gold generated zilch? it's not rocket science doing these comparisons. but of course no goldbug is interested in them.

in one of today's posted links some clown noted that the dollar lost 98% since the year 1900 whereas the purchase power of gold increased 75 times. food for the brain-amputated! did the invested dollars not generate a heap of dollars over that period of 111 years?

Mr Hiro in Tokyo was telling me he would have been very pleased to put all this money on the shiny metal in 1990

instead of the stock market

Mr Naam in Banglamung tells you if he had put all his savings and earnings since 1976 on the shiny metal he'd be one of the unfortunates who rave and rant about the Thai banks' racist behaviour to charge 150 Baht when withdrawing from an ATM a little cash with his foreign card.

[Naam]

here's what some @n@ls of Deutsche Bank think:

Precious Metals

Gold has been the best performer within the precious metals

complex since the end of June while palladium has been the

worst, Figure 3. We believe the factors that have driven gold

higher, namely negative real interest rates, skittish equity

markets and central bank diversification will continue to drive

gold prices higher. However, one important source of gold

demand, purchases of physically backed gold ETFs, has

slowed considerably over the past few years. However, we

view the likelihood of a liquidation in these holdings as a low

probability event given the appeal for tail event protection.

As we outlined in the Commodity volatility section of this

report, risk reversals between gold and silver are significantly

misaligned. In our view this reflects the more violent selling

pressure on silver relative to gold, largely in response to the

downturn in global growth expectations. Moreover

performance of the gold and silver RR in the 1M tenor relative

to the 3M tenor is suggesting that the gold price correction is

more likely to be temporary than that of silver.

Like silver, the PGM complex has significantly underperformed

other parts of the precious metals complex. In the

current environment of downgrades to global growth

expectation we expect this trend to continue.

[letitbe]

We have seen price deflation vs. gold for the last 10 years. I see no reason this trend won't continue, despite brief corrections. Does that mean gold is "real cash"?

10 years = yawwnnnn... what about 30 years? what about comparing gold vs. investment that generated yield over a long periods of time when gold generated zilch? it's not rocket science doing these comparisons. but of course no goldbug is interested in them.

in one of today's posted links some clown noted that the dollar lost 98% since the year 1900 whereas the purchase power of gold increased 75 times. food for the brain-amputated! did the invested dollars not generate a heap of dollars over that period of 111 years?

Yawwnnnnn do you have to point out obvious your comment adds nothing much like your comments about others postings you can take any period and prove anything but its not a worth while comment. The ops observation is perfectly valid and as valid as property increases against currency for last 30+ years ok Naam your very clever at quick rebutes but often contribute nothing but tripe to any discussion

what did you contribute? the wisdom that property increased against currency for the last 30+ years? another lame claim assuming that currency was kept under a mattress for 30 years. give me a break please and add something of substance (as i did).

any open or subtle wishi-washi claims that owning "fiat currency" instead of "property" never paid are nothing but ridiculous.

you are clever at putting words into peoples mouths Where did I say fiat currency against property never paid. Over my 40 years of investing mostly in property their have been times like in USA for last 3-4 years where property values have gone down substantially against currency but over a long period in most parts of world property property has on average way out performed any currency value particularly if you take into account the income generated. Weve come to one of those periods where for a short while IMO some people preserve more by buying bonds. In USA property is now IMO vastly undervalued compared with most declining currencies. Thats not ot say that clever people like you cant do better but for average joe Property now in USA offers a great opportunity to get steady income stream and over next 10-20years preserve the value of their wealth. In the UK the correction in overvalued property has yet to come but it will. Back in 70's you could buy a decent house in UK for around 1.25 x average salary and today it takes around 10-12 times average salary to buy same place. The only place I know which cash did better than property over say 20 years is Japan apart from places in midst of war and other disasters. Please try and not put meanings into peoples words which are not there

[midas]

for last 3-4 years where property values have gone down substantially against currency but over a long period in most parts of world property property has on average way out performed any currency value particularly if you take into account the income generated. Weve come to one of those periods where for a short while IMO some people preserve more by buying bonds. In USA property is now IMO vastly undervalued compared with most declining currencies. Thats not ot say that clever people like you cant do better but for average joe Property now in USA offers a great opportunity to get steady income stream and over next 10-20years preserve the value of their wealth. In the UK the correction in overvalued property has yet to come but it will. Back in 70's you could buy a decent house in UK for around 1.25 x average salary and today it takes around 10-12 times average salary to buy same place. The only place I know which cash did better than property over say 20 years is Japan apart from places in midst of war and other disasters. Please try and not put meanings into peoples words which are not there

with all due respect how do you know that American real estate values will perform any better or any differently to how Japan's property prices have stagnated over the past 21 years? there are no economic indicators to suggest there could be an improvement to real estate values in USA for a very long time and even Robert Shiller said in June a " a further 10 percent to 25 percent slump in real home prices "wouldn't surprise me at all,"

Unemployment prospects nothing short of bleak even though they will try to keep fudging the figures. To claim last night there was an increase 100,000 new jobs when 45,000 of them were people returning from a strike ( and even worse that people in the media even fell for it left me gobsmacked ) takes the definition of extend and pretend to a whole new level

http://www.cnbc.com/id/43339262/US_Home_Prices_Could_Still_Fall_a_Lot_More_Shiller

Edited October 8, 2011 by midas

[Naam]

you are clever at putting words into peoples mouths Where did I say fiat currency against property never paid.

correct, you didn't say that. but you jumped into a discussion about GOLD with the irrelevant statement

The ops observation is perfectly valid and as valid as property increases against currency for last 30+ years ok Naam your very clever at quick rebutes but often contribute nothing but tripe to any discussion

both the statement about gold (taken from a web link not from a poster) as well as your statement concerning "property" are incorrect.

firstly. any asset is "property" but not necessarily immobile property. your high and mighty posting did not indicate that you referred to immobile property. secondly, the claim "property increased vs. currency" is (i repeat) an unsubstantiated wishi-washi statement because it does neither specify what kind of property, neither its location nor the currency against which it allegedly increased.

no actual need to refer to another "property" statement of yours which lacks specific content and can therefore be stretched like a rubber band

for last 3-4 years where property values have gone down substantially against currency but over a long period in most parts of world property property has on average way out performed any currency value particularly if you take into account the income generated.

as it is 'reverse' self-explanatory plus the naïve assumption "currency" was kept idle without generating any income.

NEXT!

[Naam]

how do you know that American real estate values will perform any better or any differently to how Japan's property prices have stagnated over the past 21 years? there are no economic indicators to suggest there could be an improvement to real estate values in USA for a very long time...

there's light at the end of the tunnel Midas! the estimated price of my former home in Florida which fell 62% (sixty-two percent) since i sold it 6 years ago has gone up tremendously by ~2.6% in Q4, beating UST and Bund yields hands down

source: www.zillow.com

[midas]

how do you know that American real estate values will perform any better or any differently to how Japan's property prices have stagnated over the past 21 years? there are no economic indicators to suggest there could be an improvement to real estate values in USA for a very long time...

there's light at the end of the tunnel Midas! the estimated price of my former home in Florida which fell 62% (sixty-two percent) since i sold it 6 years ago has gone up tremendously by ~2.6% in Q4, beating UST and Bund yields hands down

source: www.zillow.com

Mr Hiro in Tokyo said that was a very astute move by you

Edited October 8, 2011 by midas

[Naam]

how do you know that American real estate values will perform any better or any differently to how Japan's property prices have stagnated over the past 21 years? there are no economic indicators to suggest there could be an improvement to real estate values in USA for a very long time...

there's light at the end of the tunnel Midas! the estimated price of my former home in Florida which fell 62% (sixty-two percent) since i sold it 6 years ago has gone up tremendously by ~2.6% in Q4, beating UST and Bund yields hands down

source: www.zillow.com

Mr Hiro in Tokyo said that was a very astute move by you

Hiro-San became a wise man after 1989. a year ago he recommended to hold at least 20% of all cash in JP¥ but i did not listen and insisted that ~5% is more than enough

[letitbe]

for last 3-4 years where property values have gone down substantially against currency but over a long period in most parts of world property property has on average way out performed any currency value particularly if you take into account the income generated. Weve come to one of those periods where for a short while IMO some people preserve more by buying bonds. In USA property is now IMO vastly undervalued compared with most declining currencies. Thats not ot say that clever people like you cant do better but for average joe Property now in USA offers a great opportunity to get steady income stream and over next 10-20years preserve the value of their wealth. In the UK the correction in overvalued property has yet to come but it will. Back in 70's you could buy a decent house in UK for around 1.25 x average salary and today it takes around 10-12 times average salary to buy same place. The only place I know which cash did better than property over say 20 years is Japan apart from places in midst of war and other disasters. Please try and not put meanings into peoples words which are not there

with all due respect how do you know that American real estate values will perform any better or any differently to how Japan's property prices have stagnated over the past 21 years? there are no economic indicators to suggest there could be an improvement to real estate values in USA for a very long time and even Robert Shiller said in June a " a further 10 percent to 25 percent slump in real home prices "wouldn't surprise me at all,"

Unemployment prospects nothing short of bleak even though they will try to keep fudging the figures. To claim last night there was an increase 100,000 new jobs when 45,000 of them were people returning from a strike ( and even worse that people in the media even fell for it left me gobsmacked ) takes the definition of extend and pretend to a whole new level

http://www.cnbc.com/...ot_More_Shiller

very true no one can say really but I go by rental yield and always have done. Rental yields in USA were very low and everyone was banking on prices always going up. Now you can get perfectly good homes in USA and get yields of around 7% after expenses fees and rest. In UK yields are still stupidly low. I dont know about Japan but I suspect the ridiculous high property prices before gave yields close to 1% or less and that now you probably get a reasonable 5-7%. Rents never go down by much and usually over time increase with inflation so its a fairly good bet even if prices drop another 25% or more and I would also not be surprised if that happened and much more in UK but then say you had 500,000 us$ to invest. You have few options currency paying 2% in something almost guaranteed to depreciate, stocks which can have little prospect of dividends being maintained but is probably a good bet over 10-20 years GOld and SIlver where you have no income and they fell between 1974-2000 in real terms by over 50% or decent reasonably priced property ( as in lots of USA today) risk another 25% fall but have a very good chance of decent income until they recover. Myself im 60-70% in property ( reduced from 100% 4 years ago) 30% or so in stocks and around 10% gold and silver. Im changing mix as quickly as I can to 50% property 20-30% stocks and 20-30% PM as IMO the best strategy. I really dont care if our property drops 50% and lived through large falls in Uk during early 70's and worse fall in early 90's (around 50% for investment

type property) but our income from rents keeps going up in line with inflation over 5+ years but not always over shorter periods and have no real fears this time round.

[letitbe]

you are clever at putting words into peoples mouths Where did I say fiat currency against property never paid.

correct, you didn't say that. but you jumped into a discussion about GOLD with the irrelevant statement

The ops observation is perfectly valid and as valid as property increases against currency for last 30+ years ok Naam your very clever at quick rebutes but often contribute nothing but tripe to any discussion

both the statement about gold (taken from a web link not from a poster) as well as your statement concerning "property" are incorrect.

firstly. any asset is "property" but not necessarily immobile property. your high and mighty posting did not indicate that you referred to immobile property. secondly, the claim "property increased vs. currency" is (i repeat) an unsubstantiated wishi-washi statement because it does neither specify what kind of property, neither its location nor the currency against which it allegedly increased.

no actual need to refer to another "property" statement of yours which lacks specific content and can therefore be stretched like a rubber band

for last 3-4 years where property values have gone down substantially against currency but over a long period in most parts of world property property has on average way out performed any currency value particularly if you take into account the income generated.

as it is 'reverse' self-explanatory plus the naïve assumption "currency" was kept idle without generating any income.

NEXT!

and so I think most people will understand what im getting at but I cant compete with your highly developed and intelligent brain I just know over 40 years ive done ok and cant be arsed with semantics over exact wording which ill leave to better people like you

[midas]

very true no one can say really but I go by rental yield and always have done. Rental yields in USA were very low and everyone was banking on prices always going up. Now you can get perfectly good homes in USA and get yields of around 7% after expenses fees and rest. In UK yields are still stupidly low. I dont know about Japan but I suspect the ridiculous high property prices before gave yields close to 1% or less and that now you probably get a reasonable 5-7%. Rents never go down by much and usually over time increase with inflation so its a fairly good bet even if prices drop another 25% or more and I would also not be surprised if that happened and much more in UK but then say you had 500,000 us$ to invest. You have few options currency paying 2% in something almost guaranteed to depreciate, stocks which can have little prospect of dividends being maintained but is probably a good bet over 10-20 years GOld and SIlver where you have no income and they fell between 1974-2000 in real terms by over 50% or decent reasonably priced property ( as in lots of USA today) risk another 25% fall but have a very good chance of decent income until they recover. Myself im 60-70% in property ( reduced from 100% 4 years ago) 30% or so in stocks and around 10% gold and silver. Im changing mix as quickly as I can to 50% property 20-30% stocks and 20-30% PM as IMO the best strategy. I really dont care if our property drops 50% and lived through large falls in Uk during early 70's and worse fall in early 90's (around 50% for investment

type property) but our income from rents keeps going up in line with inflation over 5+ years but not always over shorter periods and have no real fears this time round.

but how can rents keep going up significantly if real wages are falling dramatically?

[serenitynow]

very true no one can say really but I go by rental yield and always have done. Rental yields in USA were very low and everyone was banking on prices always going up. Now you can get perfectly good homes in USA and get yields of around 7% after expenses fees and rest. In UK yields are still stupidly low. I dont know about Japan but I suspect the ridiculous high property prices before gave yields close to 1% or less and that now you probably get a reasonable 5-7%. Rents never go down by much and usually over time increase with inflation so its a fairly good bet even if prices drop another 25% or more and I would also not be surprised if that happened and much more in UK but then say you had 500,000 us$ to invest. You have few options currency paying 2% in something almost guaranteed to depreciate, stocks which can have little prospect of dividends being maintained but is probably a good bet over 10-20 years GOld and SIlver where you have no income and they fell between 1974-2000 in real terms by over 50% or decent reasonably priced property ( as in lots of USA today) risk another 25% fall but have a very good chance of decent income until they recover. Myself im 60-70% in property ( reduced from 100% 4 years ago) 30% or so in stocks and around 10% gold and silver. Im changing mix as quickly as I can to 50% property 20-30% stocks and 20-30% PM as IMO the best strategy. I really dont care if our property drops 50% and lived through large falls in Uk during early 70's and worse fall in early 90's (around 50% for investment

type property) but our income from rents keeps going up in line with inflation over 5+ years but not always over shorter periods and have no real fears this time round.

but how can rents keep going up significantly if real wages are falling dramatically?

That can happen if there is a supply shortage. It seems unlikely but I'm not following that market just now. It IS true there are a lot of vacant homes that have yet to be liquidated and that might lend a bit of credence to the inflation adjusted theory. That theory goes out the window however if a big slug of inventory hits the market suddenly.

[letitbe]

very true no one can say really but I go by rental yield and always have done. Rental yields in USA were very low and everyone was banking on prices always going up. Now you can get perfectly good homes in USA and get yields of around 7% after expenses fees and rest. In UK yields are still stupidly low. I dont know about Japan but I suspect the ridiculous high property prices before gave yields close to 1% or less and that now you probably get a reasonable 5-7%. Rents never go down by much and usually over time increase with inflation so its a fairly good bet even if prices drop another 25% or more and I would also not be surprised if that happened and much more in UK but then say you had 500,000 us$ to invest. You have few options currency paying 2% in something almost guaranteed to depreciate, stocks which can have little prospect of dividends being maintained but is probably a good bet over 10-20 years GOld and SIlver where you have no income and they fell between 1974-2000 in real terms by over 50% or decent reasonably priced property ( as in lots of USA today) risk another 25% fall but have a very good chance of decent income until they recover. Myself im 60-70% in property ( reduced from 100% 4 years ago) 30% or so in stocks and around 10% gold and silver. Im changing mix as quickly as I can to 50% property 20-30% stocks and 20-30% PM as IMO the best strategy. I really dont care if our property drops 50% and lived through large falls in Uk during early 70's and worse fall in early 90's (around 50% for investment

type property) but our income from rents keeps going up in line with inflation over 5+ years but not always over shorter periods and have no real fears this time round.

but how can rents keep going up significantly if real wages are falling dramatically?

again true but wages over a long period keep up with inflation although you can have fairly long periods of when rents dont keep up with inflation or if theirs a huge over supply demand and supply economics always takes over I am not claiming you cant loose on property and thats why we sold a lot of our property between 2004 -2007 but for long period its as good if not better than land and pays at least some income. In times when inflation is very high or even hyper inflation those in work do get some increase in wages and need somewhere to live. They might be forced to downsize or go downmarket as many expats here have had to do which is why we here and in USA and UK keep to low to middle mass market. It has proved in our case to be a good bet over 40 years. We got almost totally out of our USA property in 2004 and now are buying a bit back since yields have returned to a decent level. Those who look at any investment for just over short term usually loos out. You do need to have some liquidity enough for say 2-4 years of spending and we use defensive stocks such as utilities and PM for that. Even if they drop say 50% we are covered in emergency for at least 4 years. I think its much better than putting any faith in government bonds or fast depreciating currency but I would admit over shorter periods those might win out but IMO never over longer term

[letitbe]

very true no one can say really but I go by rental yield and always have done. Rental yields in USA were very low and everyone was banking on prices always going up. Now you can get perfectly good homes in USA and get yields of around 7% after expenses fees and rest. In UK yields are still stupidly low. I dont know about Japan but I suspect the ridiculous high property prices before gave yields close to 1% or less and that now you probably get a reasonable 5-7%. Rents never go down by much and usually over time increase with inflation so its a fairly good bet even if prices drop another 25% or more and I would also not be surprised if that happened and much more in UK but then say you had 500,000 us$ to invest. You have few options currency paying 2% in something almost guaranteed to depreciate, stocks which can have little prospect of dividends being maintained but is probably a good bet over 10-20 years GOld and SIlver where you have no income and they fell between 1974-2000 in real terms by over 50% or decent reasonably priced property ( as in lots of USA today) risk another 25% fall but have a very good chance of decent income until they recover. Myself im 60-70% in property ( reduced from 100% 4 years ago) 30% or so in stocks and around 10% gold and silver. Im changing mix as quickly as I can to 50% property 20-30% stocks and 20-30% PM as IMO the best strategy. I really dont care if our property drops 50% and lived through large falls in Uk during early 70's and worse fall in early 90's (around 50% for investment

type property) but our income from rents keeps going up in line with inflation over 5+ years but not always over shorter periods and have no real fears this time round.

but how can rents keep going up significantly if real wages are falling dramatically?

That can happen if there is a supply shortage. It seems unlikely but I'm not following that market just now. It IS true there are a lot of vacant homes that have yet to be liquidated and that might lend a bit of credence to the inflation adjusted theory. That theory goes out the window however if a big slug of inventory hits the market suddenly.

totally correct but only for short 3-10 year term I have always looked as an investor over next 20 years + anything else you might as well visit the casino IMO particularly if unlike Nam and like me you are not brilliant at investments sorry could not help that did at the resident financial genius

[Naam]

I just know over 40 years ive done ok

I have always looked as an investor over next 20 years +

it is a noble feature to plan for the heirs. they say it gives a nice feeling when en route to the crematorium or graveyard.

[midas]

again true but wages over a long period keep up with inflation although you can have fairly long periods of when rents dont keep up with inflation or if theirs a huge over supply demand and supply economics always takes over I am not claiming you cant loose on property and thats why we sold a lot of our property between 2004 -2007 but for long period its as good if not better than land and pays at least some income. In times when inflation is very high or even hyper inflation those in work do get some increase in wages and need somewhere to live. They might be forced to downsize or go downmarket as many expats here have had to do which is why we here and in USA and UK keep to low to middle mass market. It has proved in our case to be a good bet over 40 years. We got almost totally out of our USA property in 2004 and now are buying a bit back since yields have returned to a decent level. Those who look at any investment for just over short term usually loos out. You do need to have some liquidity enough for say 2-4 years of spending and we use defensive stocks such as utilities and PM for that. Even if they drop say 50% we are covered in emergency for at least 4 years. I think its much better than putting any faith in government bonds or fast depreciating currency but I would admit over shorter periods those might win out but IMO never over longer term

I have to disagree with you

What may have happened in the past may not be so relevant to what is going to happen from here on ?

Wage Drop Has Been Worst In Decades

http://www.huffingtonpost.com/2011/01/11/pay-cut_n_807241.html

[cloudhopper]

Wage Drop Has Been Worst In Decades

http://www.huffingto...t_n_807241.html

Hardly a sign of hyperinflation. Banks have little reason to lend and people have little reason to borrow as credit-driven asset values continue to fall. What extra cash does get into the economy circulates to extinguish debt or is saved rather than invested. The non-productive economic activity (including employment) grown through credit expansion will reverse, what can't be sold won't be and prices will drop until consumption = production.

[gregb]

Wage Drop Has Been Worst In Decades

http://www.huffingto...t_n_807241.html

Hardly a sign of hyperinflation. Banks have little reason to lend and people have little reason to borrow as credit-driven asset values continue to fall. What extra cash does get into the economy circulates to extinguish debt or is saved rather than invested. The non-productive economic activity (including employment) grown through credit expansion will reverse, what can't be sold won't be and prices will drop until consumption = production.

I suppose it depends entirely on what asset class you look at in order to determine whether hyperinflation is occurring or not. If you take food for example, then what is happening right now is that people are not paying their mortgages and transferring the money previously used to pay down debt for the purpose of not dying. I expect this inflationary trend to continue and accelerate. Core inflation is a meaningless number designed to obfuscate what is really happening. Food and fuel is where to look for the coming hyperinflationary spiral. Since food prices are already rising at around 11% per year, it won't take much to see them rise at the 26% per year needed to meet the technical definition of hyperinflation.

I believe all of this can happen without significant wage increases in the near term. The money to support this will come from people not paying their mortgages and other debts.

[letitbe]

I just know over 40 years ive done ok

I have always looked as an investor over next 20 years +

it is a noble feature to plan for the heirs. they say it gives a nice feeling when en route to the crematorium or graveyard.

always have done and not noble or nice feeling just care for my family Most Old money has always known how to protect their assets and a lot have managed for thousands of years Of course I also have done it since I started investing when I was 19 and now im 85 even if I was not concerned about family and heirs its done me well. I admit at my age your right since im very unlikely to last more if lucky than a few more years but then I have little use for a lot of money myself and mostly these days just enjoy some wine and the getting rare trips to Alps or parts of USA and parts of world I still like to revisit.