Heading into one of the largest asset bubbles of recent centuries

Precisely Gunga Din!

 

I remember it well. Uncle got in at around 5 on a tip and sold at around 80 from memory. Then had the nerve to be grumpy when it went mad!

Hope it doesn't run in the family lol

 

"around 5 on a tip and sold at around 80 from memory"

Reminds me of the "Peoples Bank".

ONYA Paul!



OC

 

A student from my school, bought Poseidon at $0.04 and sold at $0.06 and thought he did well.

Then the boom hit a few months later...... He was not a happy chappy!

 

John Bogle disagrees.

 

I never got that. What's the point of having a zero-yield store of value? Why not just keep cash?

Moreover, gold (as any other thing) varies in value. I guess it was nice to tell that little lie until 2011 ("oh, it's just a store of value... that is accidentally rising sharply") but now how many of them still claim to use it as such?

Regarding the investor's confidence, how do you know it is very high at the moment? I'm not sure about that. Stocks have been rising because of QE and gold has been falling because of ETF price manipulation and eventually speculation withdrawal. This is what I find most likely to be the truth although I can't be sure. Hence I'm curious to know your perspective.

 

You could be right. The QE impact on asset prices is one of the key points in the original post and, as mentioned below it influences investor confidence: "a willingness on the part of monetary authorities to maintain liquidity has been positive for risk appetite"

Providing a precise, objective measure of investor confidence is tricky. Here's State Street's attempt at a confidence index:

Here's the historical data up to June 2014: http://statestreetglobalmarkets.com/research/pdf/historicaldata.pdf

The press release on the June 2014 update states:

Copied from: http://www.statestreetglobalmarkets.com/research/investorconfidenceindex/index.html

 

Nothing wrong with stacking some cash, but it will never appreciate against itself, whereas PMs can appreciate. That's why we stack, as a hedge against inflation, store of value, economic insurance, savings.

 

That data is very interesting, thanks for sharing! The average appears to be below 100 since the crisis of 2008 and only this year we have been having consistently positive results. However, as already mentioned by me and you, QE is doing the trick (I have no idea of how it would be if there wasn't any of it).

Moreover, that kind of data can only capture the investor that deals with securities and index funds. Normal citizens that put their money on a savings account are out of the analysis (and I assure you people have been starting to lose confidence on banks but they are too ignorant to take any action yet). I also believe PM stackers have been emerging but the ETF fraud disguises that phenomenon. For example, looking at how low the price of silver is compared to the 2011's peak, one may wonder about where all that silver (available for sale and that made the price to drop) is.

Therefore, I think that your initial statement ("Overall, investor confidence is very high at the moment which diverts money out of gold and into stocks, real estate, etc.") is a big challenge for you to stand for and I would like to know your reasons and arguments to come to such conclusion.

 

Then cash is a hedge against deflation. And when PMs are down, one can say cash is appreciating against itself.

I still don't understand why security investors (who don't necessarily believe on the currency collapse) use gold as a zero-yield store of value.

 

Because at the very end of the trail gold is universally accepted, fungible and worth a loaf of bread if there's not just one left - and often then as well.

Also because we like to think we're outriders with a true point of view.

Which we are.

 

That is a different point already. We're talking about the investor that uses gold as a financial instrument to cushion his/her portfolio.

 

SS,

I keep enough cash to go on one last BIG shopping trip to Woolies, and pay any due bills immediately.

OC

 

Agree. My rule of thumb, as I live in an apartment, is 2 months cash, 2 months food & water, an always full tank of petrol, some silver, and a happy disposition.

 

SS,

I have stopped worrying too much about water, apart from a full bath and laundry trough.

I cannot imagine any major city not having enough power generation to run the pumps, total chaos would follow if the water does not flow. The ADF would have enough I am sure.

If I was forced to have silver in ONE only form it would be ASEs - LOTS!

As for food, I am a total pessimist, and acting accordingly.

JMO

OC

 

The Bubble will imploded when this Ukraine, Russian War starts and there is a run for the exit and the bank runs may begin.

 

People do not usually pick a fight with a bloke that is certain to knock his head off.

Or where the fight will go 15 rounds and end up with both as a bloody mess.

I will go right out on a limb and say that there will be NO major war in Ukraine, NO World War 3, NO US /China War, NO NATO move east.

JMO



OC

 

Ha HAhAHHAHAHHAHHAHAHHAHA. NO

 

They had some BIG ones in Pucka years ago.

And i will bet that RAEME still has some.


OC

 

....and the miners!