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 Replies: 18 / Views: 2,777 |
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Rest in Peace
United States
9104 Posts |
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Bedrock of the Community
United States
10284 Posts |
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Valued Member
United States
197 Posts |
Good article. The annual yield on CD's and money market accounts is a joke. I can't imagine handing a stack of cash over to a bank and earning less than 1% while inflation is running at maybe 3%. Today's interest rates favor those who borrow money cheap and use it to buy an asset that appreciates in value at a rate faster than the rate of inflation.
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Pillar of the Community
United States
808 Posts |
Quote:
The annual yield on CD's and money market accounts is a joke. I can't imagine handing a stack of cash over to a bank and earning less than 1% while inflation is running at maybe 3%. Awful returns. Special circumstances aside, the only reason I see to hold cash in one of these accounts is if you want a very temporary place to hold your "dry powder" in anticipation of a buying opportunity. |
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Pillar of the Community
United States
1126 Posts |
Nice article, Thank You for sharing it. Silver could also be put into that category. Quite awhile back I began putting all money that would go into savings into various forms of Silver, 90% coin and .999 Bars and Rounds. With savings returns hovering around the 1% mark. The money I have put into "The Silver Trust Bank" what I call my little stack of Silver. The return on that is up 12% for the Year to Date. From January 1 to now. And that is even after the recent smack down in Silver while Bernanke's speech was taking place. It is even more convenient for me to turn that Silver back into paper money if needed. Coin shop's in the area have longer hours than the Banks.  Quote from Article recently read Quote:
A paper dollar from 1960 is worth exactly the same as a paper dollar in 2010, but four quarters from 1960 are worth more than $23. See Signature Line  Edited by stewart
03/19/2012 09:37 am
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Pillar of the Community
United States
4008 Posts |
WOW, TNG! Now, THAT is a basement! Decent article and I agree with the basic premise but I would reject the idea that the US has become "a nation of savers". Many people have been forced to quit spending but that is not necessarily the same thing as saving. I also agree that John Williams of http://www.shadowstats.com is a very competent economist who is not interested in reporting the sugar-coated inflation or employment numbers that the Fed, the Government, and others report. I find both his comments and his calculations to be spot on. |
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Pillar of the Community
United States
2734 Posts |
Edited by DNA
03/19/2012 9:25 pm
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Bedrock of the Community
Australia
21788 Posts |
At this time in a world that can be shocked by GFC's, gold may well be safer than a cash account for a store of wealth. There ARE risks, hovever due to the price volatility of gold, and the security risk of physical posession of the stuff. It does not have inflation problems, overall it at least keeps it's real value.
Gold is common enough. About 2,500 tonnes of it are dug up and refined every year, and a smaller proportion of is is consumed in technical industrial applications than silver.
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Valued Member
United States
284 Posts |
We started pulling our assets and putting them I to PMs a few years ago. My wife still insist on keeping money in a savings account for immediate access but other than that I mainly invest in PMs.
In a world where a big portion of people play the lotto as their retirement investment I feel that PMs are a safe bet.
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Pillar of the Community
United States
808 Posts |
Quote:
Gold is common enough. About 2,500 tonnes of it are dug up and refined every year, and a smaller proportion of is is consumed in technical industrial applications than silver. In a healthy, stable, and functional market economy free of central bank manipulation, gold wouldn't and shouldn't be the investment it is today. Needless to say, we're nowhere near "healthy, stable, functional, or free of manipulation." As long as the "new normal" economy is our reality, investors and industry will continue to buy up as much gold and silver as can be produced. Edited by coinwatch
03/20/2012 12:45 am
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Pillar of the Community
United States
5858 Posts |
I'm all for converting some of my cash into gold and/or silver, but I'm still not convinced it is necessarily better than a savings account across the board. First of all, despite the fact that PMs have been rising steadily the last few years, they have been stagnating a bit lately and there is no guarantee they will continue to go up 12% per year (or that they won't start to go back down at some point). It's hard to watch $10,000 worth of gold suddenly be worth only $8,000 due to a price drop, even if I know that it will probably go back up. The same $10,000 in the bank, however, will still be worth $10,000 no matter what (and yes, I understand that inflation causes the "real" value to go down, but the same is true for PMs if the values aren't actually going up). Second, there's the small matter of actually getting your money back out of PMs. Obviously, it won't matter too much if prices soar dramatically, but a modest rise of 4-5% can be totally eaten up by things like dealers paying less than spot, ebay fees, etc. In other words, if I bought PM for $10,000 and it is now "worth" $12,000 (an increase of 20%), I might only actually get $9,000 for it if I try to sell it. Which is to say that PMs, as nice as they are, aren't exactly "liquid" assets. Obviously, if PMS go up 4-5% every year for 10 years, it will likely more than make up for any fees or dealer premiums if I sell after 10 years, but if you need any of your assets in the short term it could be tricky. As I said, I'm happy to buy a chunk of PMs and hope that someday my investment in them will provide a strong return. But I can't ignore the possibility that we are currently in a bubble (just like the housing market during the last decade) that will eventually burst. Making 1% interest in a savings account (or CDs) isn't particularly attractive, but it beats actually losing money... |
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Bedrock of the Community
Australia
21788 Posts |
Some tough questions that may require some research:
Can someone give me an answer as to:
1)Which country has the most privately held gold?
2)Which country has the most privately held gold per head?
3)Which country is currently saving the most privately held gold per year?
I guess the same things could be asked about silver.
The site
'Trade Economics' may give some clues only to an answer.
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Valued Member
United States
284 Posts |
Barryg, that is a fair assessment. We gotta remember that PMs are more of a hedge against inflation and a safe haven than an investment.
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Pillar of the Community
United States
4008 Posts |
Quote:
The sad thing about all those gold bricks in those pictures is that they were once legal-tender circulation-issue gold coins. And very well may be once again. Don't forget that gold has been around for a VERY long time. Some of those coins that you lament could well have been made from the gold in a medieval king's crown or an ancient Egyptian Pharaoh's scepter. What goes around does indeed come around.  Barry... I agree with much of what you say and find myself in somewhat the same boat. That does not prevent anyone from having both a checking and / or a savings account AND some PMs, though. Both have their advantages and their disadvantages. As for selling PMs, ebay is probably the last place I would look for that. Their fees are just too high, IMO. A good local coin shop is often a much better option, especially if we have a good relationship with them from frequent buying. Not that this is necessary but in most business deals it certainly helps. Quote:
Some tough questions that may require some research: Lol, Sel... what part of "private" am I not understanding here? If something is private, it is very likely that others do not know about it and therefore cannot put it on any list for comparisons. It's not like PMs are registered property, like land or vehicles. |
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Bedrock of the Community
Australia
21788 Posts |
Ed_B: The only information that I can find that relates to an answer is thst
India consumes about 600 tonnes of gold per year for jewelry. I found that info in a magazine article.
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Pillar of the Community
United States
808 Posts |
@sel_69l - Regarding your questions, it's going to be difficult finding meaningful market data on global bullion consumption. However, gold jewelry consumption data is readily available for global markets. Keep in mind that jewelry has been THE gold investment vehicle of choice for many cultures across the centuries. To get you started, try google searches for charts and market reports produced by the WGC, GFMS and others. I bet you find some interesting and revealing results that get you closer to what you want to know.
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Replies: 18 / Views: 2,777 |
Posted 03/18/2012 8:18 pm
