Gold & Silver the only real money !

[Outback]

I think this article worth reading as it gives a perspective of why fiat monies are so dangerous to hold at this time .
https://www.silverdoctors.com/gold/...-is-simple-but-the-math-isnt-the-only-reason/

Those of you who bother to read this may benefit

 

[reefer]

Amazing insight into wealth management utilising the good old tried and true method of the Gold Standard..as well as good insight into how much the average Joe is robbed blind year after year...how do we fix that?..and how is a bloke supposed to accumulate enough gold to benefit from owning it in the first place...so many questions! great read though mate!

 

[Outback]

Amazing insight into wealth management utilising the good old tried and true method of the Gold Standard..as well as good insight into how much the average Joe is robbed blind year after year...how do we fix that?..and how is a bloke supposed to accumulate enough gold to benefit from owning it in the first place...so many questions! great read though mate!

Pleased you see whats happening , I must have been one of the dumbos earlier on like most ' Not Now ! :Y:

 

[user 4386]

Although we mostly agree that gold is a good hedge against serious economic disasters, I find that this article is selective and uses selective data, circular reasoning, and incorrect data (partly by its selective use of specific time periods). It is important to be aware of the time frames involved and that decreases in things like the gold and silver price occur steadily over periods of more than 20 years, as well as increases, and that the present steady climb (as well as the preceding decline) in gold price fits in to the only less than 50 years since we stopped fixing the gold price (i.e. more than 40% 0f that time it was decreasing steadily in price). Silver is worse. Because we had the gold price fixed, it adjusted rapidly upwards to a "real" value immediately after it was floated in 1971, then went into steady decline for more than 20 years (and its present period of increase has been shorter than that).

It also misses the point that there is simply not enough gold to use it as a standard any more - economies have grown too much.

 

[user 4386]

Likewise what it says about inflation is incorrect - it was not under more control prior to going off the gold standard - it was all over the place and often extreme (the only periods of prolonged low inflation or deflation were in the 1890s, 1930s and (lesser) 1950s depressions and credit squeeze. We have been able to keep it low and positive since going off the gold standard, which is desirable economically (to have no inflation also means you have no economic growth).

 

[user 4386]

The last issue is wages versus inflation. Obviously both increase with time, and it would only be an issue if wages did not keep up with inflation. This article is saying that inflation has exceeded wages through time - not so (easy to believe in this instant in time because it is true in Australia for the moment, but it is not even true in the USA over the same period). Here is the graph for USA inflation-adjusted earnings.

In 1965 dollars it has hardly changed up to the present, except that for the last approx. 30 years it has been steadily but slightly rising. To say that inflation had always been ahead would seem absurd when we have obviously had an increasing standard of living since the mid-1960s. Wages have gone up 700% since 1965 in annual (not 1965) dollar terms - my latest car cost new only 300% of what I paid in the late 1960s for a similar car (without power steering, ABS, air bags etc.) Also, income is not just wages it is also benefits, which have also changed over that period (a major part of the population effectively pays no tax at all nowadays, once benefits are also factored in). And standard of living is different again to wages and benefits - Medicare did not exist until the Hawke-Keating era, there were no student loans (hex) and 5% of the population went onto Tertiary studies versus 30% now.

 

[user 4386]

Outback, it is the article I am disagreeing with, far more than your statement (with which I agree in large part - these are dangerous times).

 

[Outback]

Thanks goldierocks for your synopsis , we will all get to see what happens regarding that original article this week

Just checked the exchange rate of our dollar ' it's 73.03 cents value of the US dollar & going down .
Time to get some protection Hey !

 

[Gem in I]

diversify an income then, some gold/silver,fiats,shares and maybe occasionally crypto and of course living expenses.

I would like to see an overall percentage chart of how much of everything should be contributed given the history of the data as a balance rather than a vs or I told you so.

For average Joe we feel can't invest money, inflations too high not enough wages but I think a big factor is there is more ways to spend on debt these days than there ever was (Netflix,internet,mobilephones ) just the tip of the iceberg all hidden under the guise of living expenses.

what percentage of an income should average Joe have or should have put aside first to prepare for the coming doom and gloom and then what percentage can be disbursed by the article and charts as a sound idea would probably be more relevant to Joe.

(Not saying I didn't enjoy the article or the charts) :Y:

 

[user 4386]

Probably a while back if one wanted to really make a killing on gold.

I don't see our falling dollar as part of the problem - our government would like it to go to about 65 cents so as to optimise our exports. I have been in two countries where the currency devalued by about 95% over a few years, but their economies are still going (if weakly). There are many factors at play....it is a decline in demand for our dollar (eg due to slower - but still high - growth in China, that is probably temporary), a strengthening US economy (not bad in itself), and our low interest rates. For example, if our interest rates our low, international money goes elsewhere where it can earn more, and the demand for our dollar (and its price) drops. If there is a decrease in demand for our exports other countries need less $A to purchase our exports with, so again demand for our dollar drops and its price drops.

As for the USA it has higher interest rates so more countries are buying the dollar $US and it is going up - but its exports are becoming more expensive for other countries to buy.

These things are rather separate from the actual risks of monetary collapse, which is what the real concern is about (like the GFC, which had nothing to do with trade or currency value, but with playing with the money market).

 

[user 4386]

diversify an income then, some gold/silver,fiats,shares and maybe occasionally crypto and of course living expenses.

I would like to see an overall percentage chart of how much of everything should be contributed given the history of the data as a balance rather than a vs or I told you so.

For average Joe we feel can't invest money, inflations too high not enough wages but I think a big factor is there is more ways to spend on debt these days than there ever was (Netflix,internet,mobilephones ) just the tip of the iceberg all hidden under the guise of living expenses.

what percentage of an income should average Joe have or should have put aside first to prepare for the coming doom and gloom and then what percentage can be disbursed by the article and charts as a sound idea would probably be more relevant to Joe.

(Not saying I didn't enjoy the article or the charts) :Y:

"Inflation too high" - it is actually about as low as one would want it to go (I paid 17% interest on my house loan). Prolonged low inflation means a sick economy (high unemployment etc). As for living expenses such as you mention, in the end that is your own choice to a significant degree, but pretty minor compared with things like energy and housing. I'm not sure that one should be contemplating the doom and gloom, just hedging ones bets in different ways to survive best should it occur - and simply having some property, some cash, some gold, some shares or Super is about the best one can do. Most people are limited in how much they can put into each, but then they also have less to lose than others. Housing has really distorted it though, as most people have the house they are buying as their dominant asset (but if you are not over-extended on a loan, largely or completely buying a house gives you somewhere to live in regardless of financial turmoil).

We don't know that it WILL occur soon. We just know that such things occur periodically (eg the 1892 and 1930s depressions, which were grim - but 70% of the population were still employed). However its effect in some countries in the 1930s (eg Germany) led to massive war. This is simply a time of much higher risk than normal, especially since the leader of the wealthiest nation in the world is playing with the mechanisms we use to keep things under control. It is not even that he is completely wrong about unfairness of China to America for example - there is definitely some truth in that. However regardless of that, trying to remedy it is a high-risk strategy, and it is occurring at a time of declined growth in China and of dangers of some European countries going bankrupt. All any.one can do is try to minimise the impact on themselves (everyone is usually impacted but to varying degrees) and get on with life without spoiling one's day, week and year worrying about it.

I just dismiss silver as largely irrelevant - a bit like gambling on the pokies. Although gold is a hedge against inflation, silver is short-term speculation on the price and probably not a good long-term hedge in my opinion. It gets talked up in the press by those who buy a bit and want to talk the price up so they can sell it at a profit (you cannot do that with gold).

There is no magic bullet, things like gold are just one vaccine that can reduce the severity of the disease if you get it. On the one hand, you might lose a house, on the other rampant inflation might mean that you can pay off the remainder of your loan with what you earn in a month (this happened briefly in Germany). In the recent housing crunch in the USA, only those houses in areas of poor employment crashed in value, those in cities like San Francisco, Los Angeles etc hardly dropped and came back rapidly to higher values and cost now nearly like Sydney and Melbourne.

 

[Gem in I]

Thanks for clarifying my misinterpretation of inflation it was helpful. I read the article as a comparison of income/expenses to investment comparisons.
As I mentioned though I think a lot of average people would disagree that more household (lets call them) utilities is not a choice but a necessity nowadays (we need internet as much as electricity) and I hope future economists really factor in the rise and rate of additional bills as household expenditure not choices (usually to offshore companies or outsourced)

I don't understand the cogs of when the gfc wheels started to come off but I do know the mums and dads held an integral part of kickstarting it again (I think lol).
And an understanding for them a percentage of their income to invest, and what into, as per op post is a win/win in the long run not just fiat.

As always goldierocks I do honestly appreciate the amount of explanation/facts you contribute just sometimes goes over my head with what I do understand.(not your fault obviously).

 

[Nanjim]

Very interesting read....
Some food for thought...

 

[Swinging & digging]

I read a little while ago that in Australia in 1983 inflation was 10.5 % pa. That was the year Bob Hawke became PM.
were wages increasing by 10.5 % pa back then? I doubt it, certainly not for the working class, different story for Managers and CEOs though, the 1980s
saw incredible wage growth for the top end of town. It also seen the start of the era we are in now, with the decline in manufacturing and demise of many
jobs that low and middle class people did. Leaving school back in the 1970s / 80s the vast majority got employed quickly in jobs and were able to pay
for a reasonable standard of living. :Y:

Have heard a few facts through the media in recent weeks and the saddest ones are, 50% of 25 year old and under school leavers do not have meaningful employment.
Only 1 in 5, 25 - 35 year olds will be able to buy a house. Nobody has commented on how much super those disadvantaged people have? I know many companies don,t pay into super for low income part time employees? The vast majority of Australians 2/3 rds estimated have only $1000 or less in savings excluding their super and equity in their own homes. So if they loose their jobs they will run out of money very fast. Imagine what could occur if loan repayments were not made, defaults in mass would ensure the collapse of the financial industry. 2008 GFC was initiated by sub prime mortgage crisis, the Globe runs on a debt based system.

There seems to be a generational divide appearing in Australia, young people feel there are limited opportunities to get ahead in life and compare what they don't have against baby boomers and other generations who had different experiences and opportunities. 8.(

I feel the Australian people of all Generations have been let down by our political leaders who went down the path of economic rationalisation and globalisation.
The majority of Western Nations are all making the same mistakes, our current financial & political system is unsustainable and will at some stage fall in a heap.

 

[Swinging & digging]

Probably a while back if one wanted to really make a killing on gold.

I don't see our falling dollar as part of the problem - our government would like it to go to about 65 cents so as to optimise our exports. I have been in two countries where the currency devalued by about 95% over a few years, but their economies are still going (if weakly). There are many factors at play....it is a decline in demand for our dollar (eg due to slower - but still high - growth in China, that is probably temporary), a strengthening US economy (not bad in itself), and our low interest rates. For example, if our interest rates our low, international money goes elsewhere where it can earn more, and the demand for our dollar (and its price) drops. If there is a decrease in demand for our exports other countries need less $A to purchase our exports with, so again demand for our dollar drops and its price drops.

As for the USA it has higher interest rates so more countries are buying the dollar $US and it is going up - but its exports are becoming more expensive for other countries to buy.

These things are rather separate from the actual risks of monetary collapse, which is what the real concern is about (like the GFC, which had nothing to do with trade or currency value, but with playing with the money market).

The problem for a Low Aussie dollar will be higher prices for imported goods.
Paid $1.58 / litre for petrol yesterday, exchange rate AUD $0.72 to USD, the average Aussie will be far worse off under a lower dollar. :N: 8.(

 

[Swinging & digging]

Probably a while back if one wanted to really make a killing on gold.

I don't see our falling dollar as part of the problem - our government would like it to go to about 65 cents so as to optimise our exports. I have been in two countries where the currency devalued by about 95% over a few years, but their economies are still going (if weakly). There are many factors at play....it is a decline in demand for our dollar (eg due to slower - but still high - growth in China, that is probably temporary), a strengthening US economy (not bad in itself), and our low interest rates. For example, if our interest rates our low, international money goes elsewhere where it can earn more, and the demand for our dollar (and its price) drops. If there is a decrease in demand for our exports other countries need less $A to purchase our exports with, so again demand for our dollar drops and its price drops.

As for the USA it has higher interest rates so more countries are buying the dollar $US and it is going up - but its exports are becoming more expensive for other countries to buy.

These things are rather separate from the actual risks of monetary collapse, which is what the real concern is about (like the GFC, which had nothing to do with trade or currency value, but with playing with the money market).

Interesting Internet News Headline today, Donald Trump is Not Happy with Higher US interest rates. :Y:
I recall before Kevin Rudd got voted in on the campaign trail going on about interest rates which were on the increase, made out he was going to help out and limit their rise, got voted in, looked into it and Said, "Nothing can be done about it, out of government control" See what i am saying about People not been looked after!

 

[Mec30]

Hey outback if you bought $6000 dollars worth of bitcoin in 2011 you would have got 6000, at the end of last year it would been worth $107,400,000 US, even after the crash today it would still be worth $38,700,000 US, I think I know what I would rather have!! What do you think about that?

 

[Swinging & digging]

Hey outback if you bought $6000 dollars worth of bitcoin in 2011 you would have got 6000, at the end of last year it would been worth $107,400,000 US, even after the crash today it would still be worth $38,700,000 US, I think I know what I would rather have!! What do you think about that?

I think if you had of done that back then you would be very happy!
But like the vast majority of us had not heard of bitcoin back then, and would you have risked $6000 on it, did you have $6000 to spare?

No doubt Crypto,s have delivered outstanding returns, but come with Significant Risk, some have described as a digital illusion of wealth.

If i had of done exactly what you are using as an example i would be cashing out now. 8)
38.7 Million US is more than enough for me.

 

[Outback]

Hey outback if you bought $6000 dollars worth of bitcoin in 2011 you would have got 6000, at the end of last year it would been worth $107,400,000 US, even after the crash today it would still be worth $38,700,000 US, I think I know what I would rather have!! What do you think about that?

If only you told me back then

 

[Mec30]

Well I didnt get on bitcoin but got on ethereum at $12 and cashed out some when it got to $2000 so crypto has been good to me