I disagree with your conclusion. By your way of thinking then - interest earned on a bank account is also not interest, because if you had to withdraw it, then the capital value or residual value of the money left (your "base capital") would have been reduced/eroded - thanks to inflation. Note- for the sake of illustration - i am assuming that bank interest would perfectly counter the effects of inflation - which of course is nowhere near true. The fact of the matter is that our understanding of the term "interest" has become warped ... it appears that the only one here who seems to savvvie the intent of this article is HiHo ...
My understanding of the term "interest" is just fine. Whoever wrote that article is the one who has things arse backwards.
On average, gold will retain its value throughout time. In stark contrast, money in the bank will decrease in value with time - even if all so-called \\\"interest\\\" is retained and reinvested... So what\\\'s the actual point of your naysayers?? Money in the bank may have \\\"interest\\\" paid, but its doesn\\\'t mean diddley!! The point is - which will have more value/buying power after (just about) any period of time?
No, I get the point of the article. The author is describing how an investor can periodically sell down a small portion of their holdings while still maintaining a high rate of return due to rising price of the metal. That's still not "interest". It's like saying "All dogs have four legs. My cat has four legs, therefore my cat is actually a dog". Look, its a perfectly decent investment strategy but this kind of twisted thinking is why people mock us for investing in precious metals. That article is on a major dealer's website and its complete rubbish. Who gives a f*** if gold doesn't pay interest when it's still managed to appreciate by ~13% p.a., compounding each year, for more than a decade? I had this discussion with a guy last week. "No, gold doesn't generate a yield in the form of a dividend or interest. You know how you bought shares instead of gold because gold doesn't produce a yield and shares do? Well, all up, your shares are down 15% and my gold is up 50%."
there is this Credit Card, rebate from bank, 5%, for every quarter spend $4k and you get $200 use it to buy gold, there is a yield there.
There really is no debate. It is not interest. Your are drawing down your capital or equity. Its excellent returns yes, but to claim it as interest is bs. If fiat money loses value over time, that is a different issue and has nothing to do with interest. You get interest by putting capital at risk. I stand by my original post.
ha ha, you certainly threw a spanner in the works there - it almost derailed the thread Anyway, my take on interest is: Something is better than nothing. Inflation will continue regardless of whether ones cash is generating interest or not, so why lose out on the interest when it woulda helped a little. Besides, the article isn't really about gold paying interest - the title is misleading. If it were proper, the original capital wouldn't be lost. i.e. The same number of ounces of gold would be on hand at the end of the term. Also, high interest savings accounts generate interest even in a bear market, while preserving the original capital. This example is looking at a favourable time frame. Edit: Sentence structure
Hey jnkmbx...what does you're user name mean? When I see your name I think stuff along the lines of JukeNbox or Junkinbix etc
It has many meanings and mysterious origins, but on SS it has something to do with junk mail which I always get in my inbox
No - it's not. Interest means diddley unless it's positive interest - i.e. is higher than the true rate of inflation.
Umm.. Banks pay interest as the lender of your money. You are taking the risk lending it to them. The bank compensates you for this risk by paying 'interest'. SILVER TO $10,000!!! Savvie?
umm ... no - by your own words - drawing down on capital is not interest... and the piddly bit of so-called "interest" which the bank pays you is an integral part of the capital. savvvie??!??? :lol:
Are you serious? The interest the bank pays you is part of the capital? I give up. This is why we need basic financial literacy in high school.
