Also, I want to point out the AUD correlation with gold, and the dampening effect that it has on gold price fluctuations. I mention this since I noticed there are many stackers here from Australia and if you're buying gold in Australian dollars, this will have a significant impact on your gold buying/selling. First of all, correlation is defined here: http://www.investopedia.com/terms/c/correlation.asp "Correlation is computed into what is known as the correlation coefficient, which ranges between -1 and +1. Perfect positive correlation (a correlation co-efficient of +1) implies that as one security moves, either up or down, the other security will move in lockstep, in the same direction. Alternatively, perfect negative correlation means that if one security moves in either direction the security that is perfectly negatively correlated will move in the opposite direction. If the correlation is 0, the movements of the securities are said to have no correlation; they are completely random." Unfortunately, for Aussies, the AUD has been positively correlated with the price of gold. This in turn reduces gains and losses in gold price when we buy and sell gold in AUD. A chart of the correlation of AUD with gold can be seen here: Source: http://www.signalfinancialgroup.com/correlation/CorrelationAD.php As you can see from the above, there have only been brief times where the AUD's correlation with gold is weak. Most of the time it's significant enough to make a difference though. Allow me to illustrate below: This is a graph of gold in USD over the last 5 years: This is a graph of gold in AUD over the last 5 years: As you can see, the price of gold in AUD did not fluctuate as much as the price of gold in USD. This means we cannot profit as much when we sell gold after its price rises. Similarly though, we do not make as much loss if we sold gold after its price falls. I can understand if Americans want to stack gold their fundamentals are much more riskier than Australia. Here's a table of debt to GDP levels of all countries from Wikipedia, unfortunately this is data for 2012 and a bit outdated, but it highlights the difference between Australia and the United States: http://en.wikipedia.org/wiki/List_of_countries_by_public_debt Look under "Public debt as a % of GDP" and "Net government debt as a % of GDP" for both Australia and United States. Also, Australia holds an AAA soverign credit rating compared to the US. The above is just pure facts and data that is relevant to your decision as an Australian (if you are one) to invest in gold. Nothing more, nothing less. If you want to buy gold, nothing's stopping you, ultimately it is your money after all.
Gotta love newbs who come here and learn us. You should PM valuecreator cave_dweller, you'd get on great. :lol: With apologies to vc.
Well I guess you are right Barry cave_guard I'll be selling all my gold tomorrow Where do you recommend I put the money ? Doesn't sound like you are interested in diversification so which asset class have you bet the farm on at the moment ?
Gotta love these guys who don't contribute anything meaningful to a discussion, and resort to Ad hominem attacks instead.
True in terms of public debt but what about the level of private debt and the fact the banks are hugely exposed to the property market ? Or does a correction in property prices not factor in you visions of future possibilities ?
Well I'm looking for something to protect me in the event of world currency wars. What do you recommend ? Term deposits ?
Inflammatory post and totally irrelevant to the conversation. There are 5 major asset classes - stocks, bonds, real estate, currencies and commodities. Those are the alternatives out there. Do your own homework and invest in what you think will give you the highest returns in the near term and be prepared to switch to other assets when necessary. As I said, do your own homework. I was referring to the probability of a currency default as high in the US, especially with all the money printing going on in the US, compared to Australia. Hence relatively more compelling reasons for Americans to want to hold onto gold. Most banks are exposed to the property market, whether you are in the US or Australia. In normal times this isn't a big issue, citizens still put their money into banks every day. There are cyclical assets that perform well during a boom and defensive assets that perform well during a recession. It is up to your own responsibility to recognize the changes in cycles and adjust your investments accordingly. There is no perfect asset that you can invest in that will give you guaranteed stable returns for the rest of your life.
You got that right. When you meet people for the first time in real life (ie face-face), do you piss them off straight away or do you take a week to do it?
This is why I/we buy and hold gold and silver. http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic OC
You don't have lengthy posts with lots of numbers and charts on other assets classes, only to point out how terrible gold is ? Gold and silver are commodities. Finally a sensible statement ! Yes, every asset has benefits as well as risks. Diversification among multiple asset classes help average out the ups and downs. Your article paints anyone owning gold as a whacko gold bug expecting the world to end. Not all of them are.
No, I never said to ignore private debt. At the moment the RBA still has room to move interest rates, so I'll be keeping an eye on that. If things take a turn for the worst, your strategies should change accordingly. Public debt is what causes more panic in the global market though if things hit the fan though.
Of course gold and silver are commodities. Perfectly aware of that. I thought this was a discussion about gold? If this thread's main focus was a discussion about stocks or real estate then I'd probably post more about them. Yes, there are investors with a level head out there but still hold gold. You might be one and if this is the case, congratulations. However, a lot of members I see on this board don't give off such a good impression and you've got to question their motives...
To lay out some not-so-positive facts about gold so that people who visit these forums that are new to gold can make a more informed decision. There are many many more articles and discussion being posted on this boards that present the bullish case for gold than there are that present a bearish case for gold.
I disagree. Show me 10 bullish metals threads and I can can show you 50 made by permashitstirrers who all sound incrdibly similar.
ok back to the chart at the top of page 2. I will assume that the chart converts pounds to dollars pre 1966. Big problem here.......the first four years we were on the gold standard yet I see a 10% drop in value. Doth my eyes deceive me?........could it be that the currency knight in shining armour is but a dream?............or is it a shitty chart? Comments please.
