THE PROOF THAT GOLD PAYS INTEREST

Discussion in 'Gold' started by Yippe-Ki-Ya, Dec 29, 2011.

  1. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    mate - if you cannot/dont understand that the so-called "interest" which the bank pays you is an integral part of the capital, then you are in serious trouble and could use all the basic financial literacy training you can get...

    anybody who thinks that he/she is really getting "interest", and can therefore draw down that interest without using up any of the "capital" is a couple of cans short mate :lol:
     
  2. malachii

    malachii Well-Known Member

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    As opposed to someone who thinks an increase in gold price is proof that gold pays interest. So the period from 1980 until 2002 gold was charging you interest I assume going on that theory.

    The same as the R/E spruikers - PM spruikers have selective memories and know how to shuffle numbers to "prove" a point. CAVEAT EMPTOR!!!

    malachii
     
  3. fishball

    fishball New Member Silver Stacker

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    Gold's paid me heaps since $1900/oz...wait no. What?
     
  4. renovator

    renovator Well-Known Member

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    So by your logic if i get paid interest on $1000 of 6% thats $60 my balance is now $1060.....i cant withdraw $1060 i can only withdraw $940? .F@#K me no wonder your still paying a mortgage & squeeling like a stuck pig . Anyone that can accurately judge inflation is a genius & should be running the country .Some things are cheaper & some things are more expensive in different areas & prices have come down on imported goods with our stong dollar so i'l take my 6% interest & spend it all day thanks..Even if it hasnt kept up with inflation its still more than i had before .
     
  5. jparrie

    jparrie Member

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    Speechless.
     
  6. Chilli

    Chilli Member Silver Stacker

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    + 1000
     
  7. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    ummm .... no

    if you get $60 interest on $1000 and your new balance is $1060 then you would have (if you're lucky) only just kept up with inflation.
    (in the real world you would be down because
    1. the real rate of infaltion is > 6%
    2. half of your so-called "interest" is stolen by the government.
    )

    So not sure where you've plucked the $940 from, but the point i was making is that if you withdraw the so-called intetest on that money then you have indeed used part of your capital ...

    for those simpleminded individuals above i'll try to break it down to the simplest terms for ya:

    1. $1000 now HAS MORE buying power than $1000 in a year's time.
    2. In order to attempt to retain the buying power of your $1000 you would have to (at the very minimum) keep reinvesting ALL interest earned to even have a prayer of retaining the buying power of your original capital.

    If you draw the "interest" then you will be losing buying power continuously - which means you will continuously have your capital wittled away.

    SAVVVIE??!!?? :lol:
     
  8. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    lol - never seen such a collection of dumbos on one thread before...

    :lol:

    PS: Hiho - you're excluded. ;)
     
  9. fishball

    fishball New Member Silver Stacker

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    Other way around mate, rofl.

    Epic fail.
     
  10. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    lol - yeh yeh ... you know what i meant.

    Christ - I come back here after a couple of weeks and suddenly everybody's had a lobotomy over the holiday period ... :lol:
     
  11. malachii

    malachii Well-Known Member

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    And 1 oz of gold still bought more in 1980 than it did in 2002 therefore also not retaining it's buying power. And in fact if you had taken the equivalent of 1 oz of gold in cash and put it in a bank account in 1980 it would have been worth a sh!tload more than the 1 oz of gold in 2002 as well as having half a chance of keeping up with inflation even after tax - unlike your 1 oz of gold.

    So again - if your argument is that gold "pays" interest when it increases - does it also "charge" interest when it flatlines/decreases or do we just ignore that part?

    malachii
     
  12. renovator

    renovator Well-Known Member

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    yippee we all know what you were trying to say its just your elequent way of saying it left a little to be desired .Like i said before if you can accurately depict inflation your a genius so your figures are just plucked out of thin air. So im sticking with my little bit of interest its better than what your silver done this year ..... isnt it ? so its not that bad at least it goes somewhere near keeping an even keel . Its a guaranteed return & theres not many guaranteed returns available is there

    Gambling all your money isnt a smart thing to do thats why so many wealthy people reccomend you diversify your wealth . Putting part of it into something thats guaranteed is a wise thing to do if you ask me .
     
  13. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    The true level of inflation is determined by the increase in the money supply - M3 ... which (and i'm guessing here) is aound 10 to 15% per annum.

    I wont deny that silver ended up having a sh1t year in 2011, but i think silver was still up around 11% for the year - which is still way better than you could get from any bank.

    I never have - and probably never will - regard holding real money (gold and silver) as gambling... call me stupid if you like! :lol:
     
  14. renovator

    renovator Well-Known Member

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    Ok if you insist . Yippee your stupid !!!! :lol:

    The inflation arguement is really dependant on the individual & their spending habits A smart shopper can buy under the quoted figures easily .Sure there is some things that cant be avoided like fuel power etc but somebody willing to do their research will keep well under inflation shopping around .fuelling up on the cheap days of the week buying in bulk . I find too many people are trying to make a moral stand by boycotting some of the larger stores to their own detriment . Personally i couldnt care less where i shop if i can save money . Saving money is a lifestyle choice that i made many years ago . I cant save the world but i can save money :p:
     
  15. fishball

    fishball New Member Silver Stacker

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    +1 renovator.

    Official CPI figures quote a basket of goods, usually that basket contains crap I would never buy regardless of price.

    Inflation isn't simple to measure as one static "X" value :)
     
  16. Silverthorn

    Silverthorn Well-Known Member

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    Problem is an increase in one thing may well lead to an increase in another. You may buy your petrol on a cheap day but rising petrol prices increases most other things eventually.
     
  17. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    that's correct - 1980 was the peak of the previous PMs cycle, and 2002 was near the beginning of the next PMs bull run - which we are currently in the midst of ...
    Which is why I believe in cyclic investing.

    Gold does pretty much "flatline" most of the time - when measured in terms of goods and services, ie. it maintains its value throughout history.
    Fiat currency by contrast constantly loses value at about the same rate that the money supply grows - this is called inflation.
    any notion that banks are paying "interest" on top of your original capital is one fit for a fool.

    by contrast, depositors are ALWAYS "charged interest" by banks for the simple reason that our moronic monetary system always has a negative interest rate - thanks to the Keynsian simpletons pulling the levers
     
  18. renovator

    renovator Well-Known Member

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    Yeah its way to narrow to be of any use & doesnt take into effect the variables of peoples habits usage of things like power & fuel etc.If anything it has made people be more frugal in their usage of said things & spending habits. (if they are smart) or they will just keep consuming then whinge about it . You have to change with the times or get left behind .
     
  19. hiho

    hiho Active Member Silver Stacker

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    CPI is a manipulated load of crap that the ABS puts together to please the government of the day
     
  20. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    You're partially right mate - CPI is indeed a basket of goods... containing some "crap" which does not reflect the mix of goods and services which regular people have to pay for on a month to month basis.

    Certainly, from my perspective - and i think its quite representative - the level of inflation which i encounter on a year to year basis is around the 10 to 15% percent mark - way way more than the croc o shit the gubmint refers to as CPI ...

    Many of the expenses are related to things i have absolutely no control over - things which are controlled either directly or indirectly by our bloated government - like power prices and an assortment of other government "charges"... many of which go up around 15 each year!
     

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