Gold continues to soar!

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000
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Re: Gold continues to soar!

Post by 000 »

Gold beating out stocks and bonds at close again.
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Re: Gold continues to soar!

Post by rockstar »

000 wrote: Tue Aug 18, 2020 3:39 pm Gold beating out stocks and bonds at close again.
Bought another $5k this morning. I still have a ways to go to get to 5%.
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Re: Gold continues to soar!

Post by valve »

Destiple wrote: Tue Aug 18, 2020 11:58 am Has anyone tried DCA into gold ETF over 5 yrs or longer?
No, but I've been DCAing into physical since 2014 or so. It was before I was even interested in investing, I started more out of paranoia after reading a book on the Fed lol. I think a lot of gold/silver stackers start like me. But, I buy some amount once or twice a year regardless of the price. Depending on the gold:silver ratio is generally which metal I buy more of (i.e. this year I bought more silver than gold because silver is depressed).

To brush your question a bit, one thing to watch out for with gold and silver ETFs is that you have third-party risk. I would feel much better with Sprott's ETFs, PHYS and PSLV, that are allocated, than JP Morgans SLV and GLD that aren't. If you google around you'll find quite a bit on that.
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Re: Gold continues to soar!

Post by Destiple »

valve wrote: Tue Aug 18, 2020 7:43 pm
Destiple wrote: Tue Aug 18, 2020 11:58 am Has anyone tried DCA into gold ETF over 5 yrs or longer?
No, but I've been DCAing into physical since 2014 or so. It was before I was even interested in investing, I started more out of paranoia after reading a book on the Fed lol. I think a lot of gold/silver stackers start like me. But, I buy some amount once or twice a year regardless of the price. Depending on the gold:silver ratio is generally which metal I buy more of (i.e. this year I bought more silver than gold because silver is depressed).

To brush your question a bit, one thing to watch out for with gold and silver ETFs is that you have third-party risk. I would feel much better with Sprott's ETFs, PHYS and PSLV, that are allocated, than JP Morgans SLV and GLD that aren't. If you google around you'll find quite a bit on that.
I would get into physical gold [actually I'm a history buff so always fascinated with coins ] but I feel like we have to pay extra to keep them safe so it seems
your thoughts ?
valve
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Re: Gold continues to soar!

Post by valve »

Destiple wrote: Tue Aug 18, 2020 10:35 pm I would get into physical gold [actually I'm a history buff so always fascinated with coins ] but I feel like we have to pay extra to keep them safe so it seems
your thoughts ?
Yes, there are costs in storage, hassle, transportation. It's a long-tail hedge that has costs of ownership, but I like the idea of having some real money (not fiat currency) and accept that as the cost. Also, under normal circumstances you pay around spot price for bullion, right now there are high premiums (I've seen up to 20% for silver now, normally you pay around spot price) because there is a literal rush to buy this stuff. This will likely push more people to paper if they are just starting now.

Taking ownership of bullion or coins requires insuring them after you reach your home owners threshold, often as simple as increasing your policy for that specifically. Essentially the biggest risk to bullion investors is theft by someone most likely closest to them or from a typical home burglary, so the bare minimum of people should know you own physical. You can't talk about it except on the Internet. You'll need a safe set in concrete or you can hide gold/silver in your walls. Distributing where you store it can lower that risk as well, as long as you have a good way for your trustee to find it if you died. The nice thing about gold is that a lot of value is stored in a very small area, especially now.

I tend to just buy bullion and rounds, and never got into the numismatic (collector) stuff in any volume, although I did buy a 5oz silver 2020 coin minted with a bat on it this year for a laugh. Not sure if that's really collectible, but, in ten years from now it'll probably give me a chuckle and at the time it wasn't much above the round prices per ounce so not much of a premium for it.

With physical there are also tax disadvantages, because the IRS taxes capital gains on it as collectables at 28%. In response you can get bullion trusts that are taxed at normal 15% single filer, but you don't hold the actual metal. So, I think the best route is a bit of everything if you like gold/silver. Some that you actually have JUST IN CASE things get terrible, some in a bullion trust that is reasonably safe under most circumstances, and then your riskiest being an allocated ETF. I would not trust an un-allocated ETF where the metals are owned 500 times over, but, those would be fine for just a hedge against inflation. I just feel if we had the problems people buy gold for, that sort of third-party risk is probably not a good idea.
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Re: Gold continues to soar!

Post by Robot Monster »

Gold to Gain on Massive Currency Debasement, SkyBridge Says
Prices may climb to $2,200 as central banks fight the pandemic
https://www.bloomberg.com/news/articles ... ridge-says

#prediction

In five years, let's see how this played out. <<--A big hello to the people of 2025! Have autonomous vehicles arrived in force?-->>
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Re: Gold continues to soar!

Post by willthrill81 »

valve wrote: Wed Aug 19, 2020 5:12 am With physical there are also tax disadvantages, because the IRS taxes capital gains on it as collectables at 28%.
That's a common misconception. The maximum long-term capital gains tax rate on gold is 28%. If your marginal tax rate is lower, you pay that rate instead.
Physical holdings in gold or silver are subject to a capital gains tax equal to your marginal tax rate, up to a maximum of 28%. That means individuals in the 33%, 35%, and 39.6% tax brackets only have to pay 28% on their physical precious metals sales. Short-term gains on precious metals are taxed at ordinary income rates.
https://www.investopedia.com/articles/p ... tments.asp
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Re: Gold continues to soar!

Post by deltaneutral83 »

Sold a Krugerrand for $1900 last week which included a 5% "back end load" so I guess Spot was $2,000 at the time or just above it.
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Re: Gold continues to soar!

Post by Forester »

deltaneutral83 wrote: Fri Aug 21, 2020 10:42 am Sold a Krugerrand for $1900 last week
Traitor!
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unclescrooge
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Re: Gold continues to soar!

Post by unclescrooge »

deltaneutral83 wrote: Fri Aug 21, 2020 10:42 am Sold a Krugerrand for $1900 last week which included a 5% "back end load" so I guess Spot was $2,000 at the time or just above it.
how did you sell it?

did the buyer take your SSN to issue you a 1098?
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Re: Gold continues to soar!

Post by deltaneutral83 »

unclescrooge wrote: Fri Aug 21, 2020 1:46 pm
deltaneutral83 wrote: Fri Aug 21, 2020 10:42 am Sold a Krugerrand for $1900 last week which included a 5% "back end load" so I guess Spot was $2,000 at the time or just above it.
how did you sell it?

did the buyer take your SSN to issue you a 1098?
Local Dealer. No paperwork, probably break even after commissions anyhow!
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Re: Gold continues to soar!

Post by LadyGeek »

Requested by Kevin K, I moved his discussion into a new thread. See: A timely and equanimous article on gold

The article covers a much broader range of topics than this thread, which is focused on price.
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Re: Gold continues to soar!

Post by columbia »

Just wait until the price of gold drops....like a rock. :P

The New ‘Gold Rush in Space’
https://www.wsj.com/articles/the-new-go ... 1596826062
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Re: Gold continues to soar!

Post by 000 »

columbia wrote: Sat Aug 22, 2020 12:44 pm Just wait until the price of gold drops....like a rock. :P

The New ‘Gold Rush in Space’
https://www.wsj.com/articles/the-new-go ... 1596826062
Couldn't read past the opening fluff as there is a paywall. Are they claiming Gold mining of celestial bodies will occur?
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Re: Gold continues to soar!

Post by willthrill81 »

000 wrote: Sat Aug 22, 2020 4:09 pm
columbia wrote: Sat Aug 22, 2020 12:44 pm Just wait until the price of gold drops....like a rock. :P

The New ‘Gold Rush in Space’
https://www.wsj.com/articles/the-new-go ... 1596826062
Couldn't read past the opening fluff as there is a paywall. Are they claiming Gold mining of celestial bodies will occur?
Certainly something like that will become viable and even necessary at some point in the distant future, but that's not going to happen any time soon. For one, flooding the market with gold would destroy its value, thereby negating the value of the enterprise.

I'm still waiting for my hoverboard. It's already at least five years delayed.

Image

Don't even get me started on Mr. Fusion.

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“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Gold continues to soar!

Post by 000 »

willthrill81 wrote: Sat Aug 22, 2020 4:23 pm Certainly [mining of celestial bodies] will become viable and even necessary at some point in the distant future, but that's not going to happen any time soon. For one, flooding the market with gold would destroy its value, thereby negating the value of the enterprise.
Exactly. By the time space is being mined, I assume we'll have entered a new Golden Age which will be too different from the present to permit any serious preparation for whatever changes are coming.
willthrill81 wrote: Sat Aug 22, 2020 4:23 pm I'm still waiting for my hoverboard. It's already at least five years delayed.

Image

Don't even get me started on Mr. Fusion.

Image
:mrgreen:
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Re: Gold continues to soar!

Post by columbia »

willthrill81 wrote: Sat Aug 22, 2020 4:23 pm
000 wrote: Sat Aug 22, 2020 4:09 pm
columbia wrote: Sat Aug 22, 2020 12:44 pm Just wait until the price of gold drops....like a rock. :P

The New ‘Gold Rush in Space’
https://www.wsj.com/articles/the-new-go ... 1596826062
Couldn't read past the opening fluff as there is a paywall. Are they claiming Gold mining of celestial bodies will occur?
Certainly something like that will become viable and even necessary at some point in the distant future, but that's not going to happen any time soon. For one, flooding the market with gold would destroy its value, thereby negating the value of the enterprise.

I'm still waiting for my hoverboard. It's already at least five years delayed.

Image

Don't even get me started on Mr. Fusion.

Image

Oh I agree: why would someone - in the abstract - produce more of a product, if that would reduce the value of the existing stock of said product? Naturally, that says quite a bit about the inherent value about said product.
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Re: Gold continues to soar!

Post by willthrill81 »

columbia wrote: Sat Aug 22, 2020 4:49 pm
willthrill81 wrote: Sat Aug 22, 2020 4:23 pm
000 wrote: Sat Aug 22, 2020 4:09 pm
columbia wrote: Sat Aug 22, 2020 12:44 pm Just wait until the price of gold drops....like a rock. :P

The New ‘Gold Rush in Space’
https://www.wsj.com/articles/the-new-go ... 1596826062
Couldn't read past the opening fluff as there is a paywall. Are they claiming Gold mining of celestial bodies will occur?
Certainly something like that will become viable and even necessary at some point in the distant future, but that's not going to happen any time soon. For one, flooding the market with gold would destroy its value, thereby negating the value of the enterprise.

I'm still waiting for my hoverboard. It's already at least five years delayed.

Image

Don't even get me started on Mr. Fusion.

Image

Oh I agree: why would someone - in the abstract - produce more of a product, if that would reduce the value of the existing stock of said product? Naturally, that says quite a bit about the inherent value about said product.
Like everything else in the financial realms, gold has value because people say it does.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Gold continues to soar!

Post by 000 »

columbia wrote: Sat Aug 22, 2020 4:49 pm Oh I agree: why would someone - in the abstract - produce more of a product, if that would reduce the value of the existing stock of said product? Naturally, that says quite a bit about the inherent value about said product.
Does Oil have inherent value?
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Re: Gold continues to soar!

Post by columbia »

000 wrote: Sat Aug 22, 2020 5:14 pm
columbia wrote: Sat Aug 22, 2020 4:49 pm Oh I agree: why would someone - in the abstract - produce more of a product, if that would reduce the value of the existing stock of said product? Naturally, that says quite a bit about the inherent value about said product.
Does Oil have inherent value?
Once refined, it can help propel my car.
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Re: Gold continues to soar!

Post by Robot Monster »

The below extract from the article, "JPMorgan Says FX, Oil Among Few Assets Cheap on Long-Term Basis"
https://www.bloomberg.com/news/articles ... term-basis

Developed-market debt and gold are expensive by long-term measures while oil and agriculture are relative bargains, according to JPMorgan Chase & Co...“The fairly valued ones are DM [developed-market] and EM [emerging market] credit plus Asian equities,” he wrote in a note last week. “The expensive ones are most other equities plus DM bonds and gold.”
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Re: Gold continues to soar!

Post by Robot Monster »

World’s Biggest Gold ETF Halts Record Run as Haven Demand Ebbs
SPDR Gold Shares posted three straight weeks of outflows
The fund had seen eight consecutive months of inflows

The world’s largest gold exchange-traded fund is seeing withdrawals after a ferocious run...the rally has shown signs of losing momentum as economies reopen, eroding demand for haven assets...
However, on a bullish note,
'Demand is going to stay, whether it’s because rates stay lower for even longer or eventually people think inflation is coming back,' Dwek said.
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Re: Gold continues to soar!

Post by Random Musings »

I believe the dollar has been a weaker currency recently and gold tends to rise when that happens.

If the trend stays that way, I expect gold to continue to climb.

RM
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Re: Gold continues to soar!

Post by Fortune Seeker »

Interesting thing: if you adjust gold price by US M1 money stock it's at nearly same level last 5 years, but I'm not sure if you can use M1 numbers like that, it's not direct inflation number after all.

https://imgur.com/a/CKqQ3iW
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Re: Gold continues to soar!

Post by willthrill81 »

Fortune Seeker wrote: Wed Sep 16, 2020 5:36 am Interesting thing: if you adjust gold price by US M1 money stock it's at nearly same level last 5 years, but I'm not sure if you can use M1 numbers like that, it's not direct inflation number after all.

https://imgur.com/a/CKqQ3iW
Poster market timer has already shown that gold has been very strongly correlated with 10 year TIPS yields.
market timer wrote: Sat Jul 04, 2020 10:36 pm Below is the price of gold vs. 10-year real yields (inverted by multiplying by -1). Clearly, gold shares strong similarities with long term inflation adjusted securities. It is helpful to think of gold as buying a long term inflation adjusted security. Most of the day-to-day price variance will be determined by changes in real yields, not short run inflation. This is not a new finding--many famous economists have written about this in the past. Here is Tyler Cowen summarizing a Paul Krugman post in 2011 and a paper from Larry Summers in 1988: https://marginalrevolution.com/marginal ... radox.html. If one understands that gold behaves like a long term inflation adjusted bond, one would expect the low correlation in the Fed blog post. It's such a major oversight that the analysis feels like something written by an anti-gold marketing department. It reflects poorly on the Fed.

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Re: Gold continues to soar!

Post by alluringreality »

willthrill81 wrote: Wed Sep 16, 2020 12:04 pm
Poster market timer has already shown that gold has been very strongly correlated with 10 year TIPS yields.
market timer wrote: Sat Jul 04, 2020 10:36 pm Below is the price of gold vs. 10-year real yields (inverted by multiplying by -1). Clearly, gold shares strong similarities with long term inflation adjusted securities. It is helpful to think of gold as buying a long term inflation adjusted security.
The 1980s and 1990s had positive inflation in the United States, while gold lost value in real and nominal terms. It's a bit debatable to potentially suggest to a reader that buying gold and buying an inflation adjusted security might have performed similarly over those two decades.

Here is a quote from Paul Krugman regarding gold and inflation:
gold price isn't driven by inflation, but by real interest rates -- the return on alternative assets
https://twitter.com/paulkrugman/status/ ... 39200?s=20
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Re: Gold continues to soar!

Post by permport »

Ray Dalio putting it elegantly on American vs Chinese thinking in his latest paper. It also provides insight into why American investors don't like gold but the Chinese do.

Very relevant and powerful.
For example, to Americans 300 years is a very long time. For the Chinese it is very recent. While having a revolution or a war that will overturn our systems is unimaginable to an American, it is inevitable to a Chinese person (because the Chinese have seen that they have always happened and the Chinese have studied the patterns of why they have happened). While most Americans focus on particular events, especially those that are now happening, most Chinese, especially their leaders, see evolutions over time and put what is happening in the context of them. While Americans fight for what they want in the present, most Chinese strategize how to get what they want in the future. As a result of these different perspectives the Chinese are typically more thoughtful and strategic than Americans, who are more impulsive and tactical. I also found Chinese leaders to be much more philosophical (literally readers of philosophy) than Americans leaders. If you read their writings and their speeches, you will find this to be true. Philosophies of how reality works and how to deal with it well are woven into their thinking, which is expressed in their writings.

https://www.principles.com/the-changing ... /#chapter5
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Re: Gold continues to soar!

Post by Pu239 »

The Chinese have taken a shine to gold only recently so they hardly have a long philosophical attachment to it. US experience with gold as a currency or investment is considerably longer than that of China which we derived from the Europeans by tradition. That tradition goes back more than two millennia. Until the 20th century, circulating Chinese coins were made mainly of copper and silver. While the US and many other developed nations were on a gold standard, the Chinese were on a silver standard. I don't see any special insights related to gold in Dalio's words. If the Chinese are so smart about gold, why isn't it reflected in the history of their currency? From Wikipeda:

https://en.wikipedia.org/wiki/History_o ... e_currency
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Re: Gold continues to soar!

Post by unclescrooge »

Pu239 wrote: Wed Sep 16, 2020 10:55 pm The Chinese have taken a shine to gold only recently so they hardly have a long philosophical attachment to it. US experience with gold as a currency or investment is considerably longer than that of China which we derived from the Europeans by tradition. That tradition goes back more than two millennia. Until the 20th century, circulating Chinese coins were made mainly of copper and silver. While the US and many other developed nations were on a gold standard, the Chinese were on a silver standard. I don't see any special insights related to gold in Dalio's words. If the Chinese are so smart about gold, why isn't it reflected in the history of their currency? From Wikipeda:

https://en.wikipedia.org/wiki/History_o ... e_currency
Because it isn't reflected in their currency is precisely why it holds value in their culture.

The US dollar has been a pretty stable store of value compared to other currencies, which is why gold gets no respect in US society.
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Re: Gold continues to soar!

Post by Fortune Seeker »

Were you even allowed to have gold as "investment" or "store of value" in China up until relatively recently? I know in USSR you were only allowed to own pitiful amount of gold jewelry and perhaps some old gold coins, but selling those was an absolute pain. A citizen was supposed to keep his money in Soviet Ruble savings account, not some capitalist nonsense. Illegally, "store of value" of choice was US dollar cash.

Someone who's Chinese and been living in China before will probably provide a better insight into that.
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Re: Gold continues to soar!

Post by market timer »

alluringreality wrote: Wed Sep 16, 2020 3:49 pm
willthrill81 wrote: Wed Sep 16, 2020 12:04 pm
Poster market timer has already shown that gold has been very strongly correlated with 10 year TIPS yields.
market timer wrote: Sat Jul 04, 2020 10:36 pm Below is the price of gold vs. 10-year real yields (inverted by multiplying by -1). Clearly, gold shares strong similarities with long term inflation adjusted securities. It is helpful to think of gold as buying a long term inflation adjusted security.
The 1980s and 1990s had positive inflation in the United States, while gold lost value in real and nominal terms. It's a bit debatable to potentially suggest to a reader that buying gold and buying an inflation adjusted security might have performed similarly over those two decades.

Here is a quote from Paul Krugman regarding gold and inflation:
gold price isn't driven by inflation, but by real interest rates -- the return on alternative assets
https://twitter.com/paulkrugman/status/ ... 39200?s=20
The volatility of returns for long term TIPS is essentially all driven by changes in real yields. I'm saying the same thing as Krugman.
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Re: Gold continues to soar!

Post by alluringreality »

market timer wrote: Thu Sep 17, 2020 7:42 am The volatility of returns for long term TIPS is essentially all driven by changes in real yields. I'm saying the same thing as Krugman.
Personally I'm not convinced that Paul Krugman would necessarily agree to "think of gold as buying a long term inflation adjusted security" or "gold behaves like a long term inflation adjusted bond". Last month he was again ranting about people misunderstanding gold in relation to inflation.

"Aaauuuuggghhh!" No, gold prices aren't rising because investors expect inflation. They don't. Gold is high because bond yields are so low
https://twitter.com/paulkrugman/status/ ... 10273?s=20
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Re: Gold continues to soar!

Post by cheezit »

alluringreality wrote: Thu Sep 17, 2020 8:32 am
market timer wrote: Thu Sep 17, 2020 7:42 am The volatility of returns for long term TIPS is essentially all driven by changes in real yields. I'm saying the same thing as Krugman.
Personally I'm not convinced that Paul Krugman would necessarily agree to "think of gold as buying a long term inflation adjusted security" or "gold behaves like a long term inflation adjusted bond". Last month he was again ranting about people misunderstanding gold in relation to inflation.

"Aaauuuuggghhh!" No, gold prices aren't rising because investors expect inflation. They don't. Gold is high because bond yields are so low
https://twitter.com/paulkrugman/status/ ... 10273?s=20
I'm confused as to why Krugman thinks this. You can look at a twenty period where rates were going down more or less continuously, and gold wasn't rising. I don't think you can make an argument here that effectively taking the derivative of both sides with respect to time isn't valid. What am I missing?

e: I should note I'm not trying to make a point about the performance of gold here, but rather just the fit of the model Krugman was implying in that tweet.
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Re: Gold continues to soar!

Post by Robot Monster »

cheezit wrote: Thu Sep 17, 2020 9:04 am
alluringreality wrote: Thu Sep 17, 2020 8:32 am
market timer wrote: Thu Sep 17, 2020 7:42 am The volatility of returns for long term TIPS is essentially all driven by changes in real yields. I'm saying the same thing as Krugman.
Personally I'm not convinced that Paul Krugman would necessarily agree to "think of gold as buying a long term inflation adjusted security" or "gold behaves like a long term inflation adjusted bond". Last month he was again ranting about people misunderstanding gold in relation to inflation.

"Aaauuuuggghhh!" No, gold prices aren't rising because investors expect inflation. They don't. Gold is high because bond yields are so low
https://twitter.com/paulkrugman/status/ ... 10273?s=20
I'm confused as to why Krugman thinks this. You can look at a twenty period where rates were going down more or less continuously, and gold wasn't rising. I don't think you can make an argument here that effectively taking the derivative of both sides with respect to time isn't valid. What am I missing?

e: I should note I'm not trying to make a point about the performance of gold here, but rather just the fit of the model Krugman was implying in that tweet.
I think you're looking at interest rates, not real interest rates.

Here is a quote from Paul Krugman regarding gold and inflation:
gold price isn't driven by inflation, but by real interest rates -- the return on alternative assets
https://twitter.com/paulkrugman/status/ ... 39200?s=20
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Re: Gold continues to soar!

Post by Pu239 »

unclescrooge wrote: Wed Sep 16, 2020 11:15 pm
Because it isn't reflected in their currency is precisely why it holds value in their culture.

The US dollar has been a pretty stable store of value compared to other currencies, which is why gold gets no respect in US society.
China is barely mentioned in Peter Berstein's "The Power of Gold - A History of an Obsession" and certainly not in a way that shows they've held a long term attachment to it. Like some, they are newbie goldbugs. The Chinese are human like the rest of of us and subject to the same weaknesses and foibles. Investing in markets is relatively new to the Chinese public. They will make all the mistakes we repeatedly make but do so en masse.
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Re: Gold continues to soar!

Post by cheezit »

Robot Monster wrote: Thu Sep 17, 2020 10:23 am
cheezit wrote: Thu Sep 17, 2020 9:04 am
alluringreality wrote: Thu Sep 17, 2020 8:32 am
market timer wrote: Thu Sep 17, 2020 7:42 am The volatility of returns for long term TIPS is essentially all driven by changes in real yields. I'm saying the same thing as Krugman.
Personally I'm not convinced that Paul Krugman would necessarily agree to "think of gold as buying a long term inflation adjusted security" or "gold behaves like a long term inflation adjusted bond". Last month he was again ranting about people misunderstanding gold in relation to inflation.

"Aaauuuuggghhh!" No, gold prices aren't rising because investors expect inflation. They don't. Gold is high because bond yields are so low
https://twitter.com/paulkrugman/status/ ... 10273?s=20
I'm confused as to why Krugman thinks this. You can look at a twenty period where rates were going down more or less continuously, and gold wasn't rising. I don't think you can make an argument here that effectively taking the derivative of both sides with respect to time isn't valid. What am I missing?

e: I should note I'm not trying to make a point about the performance of gold here, but rather just the fit of the model Krugman was implying in that tweet.
I think you're looking at interest rates, not real interest rates.

Here is a quote from Paul Krugman regarding gold and inflation:
gold price isn't driven by inflation, but by real interest rates -- the return on alternative assets
https://twitter.com/paulkrugman/status/ ... 39200?s=20
Ah, that makes sense. Looking at the graph of TIPS yields vs time (constant maturity data from the Fed), the pattern becomes more clear.

I can't find a good chart of real yields of nominal treasurys vs time anywhere and I'm too lazy to construct one myself, but I figure the TIPS data is a good enough stand-in.
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Re: Gold continues to soar!

Post by Robot Monster »

Gold soaring over a sea of red at the moment. +0.86% :beer
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Re: Gold continues to soar!

Post by 000 »

Robot Monster wrote: Fri Sep 18, 2020 12:27 pm Gold soaring over a sea of red at the moment. +0.86% :beer
Yawn. I want to see some +2% and up days again.
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Re: Gold continues to soar!

Post by tmcc »

Gold was good but if you went to cash and bought in march, you're way ahead of gold.
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Re: Gold continues to soar!

Post by 000 »

tmcc wrote: Fri Sep 18, 2020 5:47 pm Gold was good but if you went to cash and bought in march, you're way ahead of gold.
Can I borrow your time machine?

Thanks.
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Re: Gold continues to soar!

Post by jabberwockOG »

Perhaps gold makes sense versus just holding cash in times where inflation is anticipated. I am more comfortable holding equity positions in the S&P 500 and the Nasdaq Indexes as an inflation hedge. Gold has value because some people think it is valuable and that feels somewhat capricious to me. I am more comfortable owning large revenue generating, and hopefully profit making companies.
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Re: Gold continues to soar!

Post by tmcc »

000 wrote: Fri Sep 18, 2020 5:48 pm
tmcc wrote: Fri Sep 18, 2020 5:47 pm Gold was good but if you went to cash and bought in march, you're way ahead of gold.
Can I borrow your time machine?

Thanks.
Sure. Whats in it for me?
tiburblium
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Re: Gold continues to soar!

Post by tiburblium »

jabberwockOG wrote: Fri Sep 18, 2020 6:03 pm Perhaps gold makes sense versus just holding cash in times where inflation is anticipated. I am more comfortable holding equity positions in the S&P 500 and the Nasdaq Indexes as an inflation hedge. Gold has value because some people think it is valuable and that feels somewhat capricious to me. I am more comfortable owning large revenue generating, and hopefully profit making companies.
I get your point, but many lesser companies in the Nasdaq are priced based on hope. Many companies are talked about using a “price to sales” ratio now, which makes me laugh whenever I hear it
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Re: Gold continues to soar!

Post by jabberwockOG »

tiburblium wrote: Fri Sep 18, 2020 8:18 pm
jabberwockOG wrote: Fri Sep 18, 2020 6:03 pm Perhaps gold makes sense versus just holding cash in times where inflation is anticipated. I am more comfortable holding equity positions in the S&P 500 and the Nasdaq Indexes as an inflation hedge. Gold has value because some people think it is valuable and that feels somewhat capricious to me. I am more comfortable owning large revenue generating, and hopefully profit making companies.
I get your point, but many lesser companies in the Nasdaq are priced based on hope. Many companies are talked about using a “price to sales” ratio now, which makes me laugh whenever I hear it

I agree equities are a risk especially near record high prices. My point is that from my perspective owning diversified shares in a wide range of companies that generate revenues and profits over time should be a reasonable alternative to gold as an inflation hedge (assuming typical demand/supply capitalist market model remains in effect). If currency suddenly becomes worthless these same businesses would still demand a price of what ever has assumed transaction value for their goods and services. Of course there are fully apocalyptic scenarios where only bullets and guns have value but honestly I won;t invest for that because I am pretty sure I don't want to be a "survivor" in that world. Gold also has risks which to be seem very arbitrary and capricious in addition to security concerns and high storage and transaction costs. Lots of rationalization on my part, but if I'm being honest I just can't buy into bits of shiny metal mostly used for personal adornment as have much real lasting value in a modern world. My guess is someday the bottom will drop out leaving more than a few holding the bag.
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Re: Gold continues to soar!

Post by 000 »

jabberwockOG wrote: Fri Sep 18, 2020 9:22 pm I agree equities are a risk especially near record high prices. My point is that from my perspective owning diversified shares in a wide range of companies that generate revenues and profits over time should be a reasonable alternative to gold as an inflation hedge (assuming typical demand/supply capitalist market model remains in effect). If currency suddenly becomes worthless these same businesses would still demand a price of what ever has assumed transaction value for their goods and services. Of course there are fully apocalyptic scenarios where only bullets and guns have value but honestly I won;t invest for that because I am pretty sure I don't want to be a "survivor" in that world. Gold also has risks which to be seem very arbitrary and capricious in addition to security concerns and high storage and transaction costs. Lots of rationalization on my part, but if I'm being honest I just can't buy into bits of shiny metal mostly used for personal adornment as have much real lasting value in a modern world. My guess is someday the bottom will drop out leaving more than a few holding the bag.
I personally do not view precious metals as a growth asset, and thus not as a replacement for stocks.

I view them as an alternative currency. The past history of Gold and Silver in this area is strong, although the case for Silver has been weakening for more than a century. So for my purposes the proper comparison is with USD, and I take my Gold allocation out of what would otherwise be in fixed income.

Many disagree with this view, yet are more than happy to hold fiat currency issued by governments that themselves hoard Gold. In particular, the acquisition and retention of Gold has been a longstanding policy objective of the US Government.

The "Gold as currency of last resort" rationale may weaken in coming decades or centuries, especially if a cryptocurrency becomes effective for transactions and widely used or at least widely respected.
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Re: Gold continues to soar!

Post by qwertyjazz »

000 wrote: Fri Sep 18, 2020 11:43 pm
jabberwockOG wrote: Fri Sep 18, 2020 9:22 pm I agree equities are a risk especially near record high prices. My point is that from my perspective owning diversified shares in a wide range of companies that generate revenues and profits over time should be a reasonable alternative to gold as an inflation hedge (assuming typical demand/supply capitalist market model remains in effect). If currency suddenly becomes worthless these same businesses would still demand a price of what ever has assumed transaction value for their goods and services. Of course there are fully apocalyptic scenarios where only bullets and guns have value but honestly I won;t invest for that because I am pretty sure I don't want to be a "survivor" in that world. Gold also has risks which to be seem very arbitrary and capricious in addition to security concerns and high storage and transaction costs. Lots of rationalization on my part, but if I'm being honest I just can't buy into bits of shiny metal mostly used for personal adornment as have much real lasting value in a modern world. My guess is someday the bottom will drop out leaving more than a few holding the bag.
I personally do not view precious metals as a growth asset, and thus not as a replacement for stocks.

I view them as an alternative currency. The past history of Gold and Silver in this area is strong, although the case for Silver has been weakening for more than a century. So for my purposes the proper comparison is with USD, and I take my Gold allocation out of what would otherwise be in fixed income.

Many disagree with this view, yet are more than happy to hold fiat currency issued by governments that themselves hoard Gold. In particular, the acquisition and retention of Gold has been a longstanding policy objective of the US Government.

The "Gold as currency of last resort" rationale may weaken in coming decades or centuries, especially if a cryptocurrency becomes effective for transactions and widely used or at least widely respected.
Then why not just alternative currencies (Euro, yen etc) I get currency risk but gold and dollar drift (either up or down) is also a risk.
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Re: Gold continues to soar!

Post by Robot Monster »

qwertyjazz wrote: Sat Sep 19, 2020 4:08 am
000 wrote: Fri Sep 18, 2020 11:43 pm
jabberwockOG wrote: Fri Sep 18, 2020 9:22 pm I agree equities are a risk especially near record high prices. My point is that from my perspective owning diversified shares in a wide range of companies that generate revenues and profits over time should be a reasonable alternative to gold as an inflation hedge (assuming typical demand/supply capitalist market model remains in effect). If currency suddenly becomes worthless these same businesses would still demand a price of what ever has assumed transaction value for their goods and services. Of course there are fully apocalyptic scenarios where only bullets and guns have value but honestly I won;t invest for that because I am pretty sure I don't want to be a "survivor" in that world. Gold also has risks which to be seem very arbitrary and capricious in addition to security concerns and high storage and transaction costs. Lots of rationalization on my part, but if I'm being honest I just can't buy into bits of shiny metal mostly used for personal adornment as have much real lasting value in a modern world. My guess is someday the bottom will drop out leaving more than a few holding the bag.
I personally do not view precious metals as a growth asset, and thus not as a replacement for stocks.

I view them as an alternative currency. The past history of Gold and Silver in this area is strong, although the case for Silver has been weakening for more than a century. So for my purposes the proper comparison is with USD, and I take my Gold allocation out of what would otherwise be in fixed income.

Many disagree with this view, yet are more than happy to hold fiat currency issued by governments that themselves hoard Gold. In particular, the acquisition and retention of Gold has been a longstanding policy objective of the US Government.

The "Gold as currency of last resort" rationale may weaken in coming decades or centuries, especially if a cryptocurrency becomes effective for transactions and widely used or at least widely respected.
Then why not just [invest, buy?] alternative currencies (Euro, yen etc) I get currency risk but gold and dollar drift (either up or down) is also a risk.
Doing a quick search, I do see that the Swiss franc might just be such a gold alternative.

"Surging Swiss franc may have become a gold proxy, Goldman Sachs says"

"Here's why the Swiss franc has become the preferred investment for traders hiding out from geopolitical tensions"
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Re: Gold continues to soar!

Post by 000 »

qwertyjazz wrote: Sat Sep 19, 2020 4:08 am Then why not just alternative currencies (Euro, yen etc) I get currency risk but gold and dollar drift (either up or down) is also a risk.
Adding a hard currency to a portfolio already holding fiat currency offers more diversification than other fiat currencies:
  • The supply of mined metals is not controlled by any one entity; the fiat supply is a monopoly of some entity.
  • The integrity of a specimen of metal can be verified by atomic analysis; physical cash cannot be verified by mere inspection.
  • Gold has retained purchasing power over the long run; every extant fiat currency has lost most of its purchasing power since inception.
  • Gold was historically the global reserve currency and is still hoarded by central banks; USD and GBP were the only fiats to ever fill this role.
Moreover, my portfolio contains unhedged international stocks, offering some exposure to foreign fiat.

Finally, it is hard to see a situation where the USD fails but EUR and JPY do well. I don't see either becoming the global reserve currency if USD fails because it does not seem that Russia, China, and other powers non-aligned to the US would be much happier needing to use EUR or JPY than USD.
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Re: Gold continues to soar!

Post by jabberwockOG »

000 wrote: Sat Sep 19, 2020 4:52 pm
qwertyjazz wrote: Sat Sep 19, 2020 4:08 am Then why not just alternative currencies (Euro, yen etc) I get currency risk but gold and dollar drift (either up or down) is also a risk.
Adding a hard currency to a portfolio already holding fiat currency offers more diversification than other fiat currencies:
  • The supply of mined metals is not controlled by any one entity; the fiat supply is a monopoly of some entity.
  • The integrity of a specimen of metal can be verified by atomic analysis; physical cash cannot be verified by mere inspection.
  • Gold has retained purchasing power over the long run; every extant fiat currency has lost most of its purchasing power since inception.
  • Gold was historically the global reserve currency and is still hoarded by central banks; USD and GBP were the only fiats to ever fill this role.
Moreover, my portfolio contains unhedged international stocks, offering some exposure to foreign fiat.

Finally, it is hard to see a situation where the USD fails but EUR and JPY do well. I don't see either becoming the global reserve currency if USD fails because it does not seem that Russia, China, and other powers non-aligned to the US would be much happier needing to use EUR or JPY than USD.
Respectfully I think it also very hard to see any realistic situation where the USD fails to the extent that somehow a bright shiny bit of metal gold becomes the new medium for purchasing goods and services. I much prefer to have ownership shares in a large number of diversified revenue generating businesses as a currency hedge.
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Re: Gold continues to soar!

Post by NoRegret »

While I’m as bullish on precious metals as any over the medium-long term, there is still too much optimism over the short term. Btw, Friday saw the PM complex closing below its trend line support.

I trade around a core position to manage volatility and my own psychology of having a larger-than-portfolio-theory-called-for PM allocation. YMMV.

Cheers,
NR

Edit: comments on COT removed
Last edited by NoRegret on Sat Sep 19, 2020 11:18 pm, edited 1 time in total.
Market timer targeting long term cycles -- aiming for several key decisions per asset class per decade
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