Showing posts with label Gold. Show all posts
Showing posts with label Gold. Show all posts

2.23.2018

Bitcoin, Gold, Cash, or Equities


Let's start with a hypothetical $ 10,000 (that I don't have). But upcoming the hypothetical investor is about ready to receive $ 10,000: perhaps from a bonus, an inheritance, a tax refund or pennies from heaven. What would I do?

Bitcoin? 

This expresses my view perfectly: Bitcoin and the Incredible Power of Fiction
"When the history is written, cryptocurrencies will likely be described as one of the most brilliant scams in history." ... "We all laugh at primitive tribes which used large stones (or pigs) as currency. Well, laugh as you will, but a stone or a healthy pig is something. Cryptocurrencies are nothing except the marketing power of inventors, financiers and others who love the idea of buying a black box (which is obviously empty) for the price of a Kia and dreaming that it will turn into a Mercedes. There have been times recently when this dream has materialized within hours. This is not just a bubble. It is not just a fraud. It is perhaps the outer limit, the ultimate expression, of the ability of humans to seize upon ether and hope to ride it to the stars."
As an aside, I have .0039 in Bitcoin. I "invested" a dollar 3 years ago.

You'll need a bit (no pun) more than $ 10,000 for 1 Bitcoin today





 Gold? 

 A metals broker I have used: Apmex
Negatives:
  1. Must be stored (safety deposit box)
  2. No dividend
  3. While there is a market, there's no ready market: to sell you have to box, insure and ship
  4. Some view Gold the same as Bitcoin: "“(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” ... "Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money, and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that." Warren Buffett
Positives:
  1. If the sky ever falls ... (remember ... if the world "ends" the Internet will be down!)
  2. Beauty
  3. Makes a nice gift to grandkids when they turn 18 (my plan!)
  4. You can buy an ETF 
  5. To counter Warren Buffett:

At today's rate, $ 10,000 will buy you this:


Cash? 

Have an solid emergency fund: How to Build an Emergency Fund When You're Counting Every Penny - There are ways to save money even when money is tight
You’ve heard it time and again: It’s important to set aside three to six months’ expenses for an emergency fund. Easier said than done, right? If you have a lot of debt, live on a fixed income or have unpredictable expenses, putting aside that much money can seem nearly impossible. The good news is you don’t have to do it all at once - even a little money in savings can go a long way.
Comment: $ 1,000 isn't enough! If you have none, use that $ 10,000 for your emergency fund!

Image source


Equities?
I'm going with Warren's view expressed above. I have an emergency fund. I've got my couple of coins. I would go with a solid dividend stock like sleepy General Mills (in the news today because they are acquiring Blue Buffalo). 100 shares of GIS (which pays a 3.6% dividend) for about $ 5,400 and 100 shares of Coca-Cola for about $ 4,400 (pays a 3.6% dividend as well) 


Comment: If interested in Bitcoin, Coinbase is a good place to buy. But it's funny money








Contrarian view: Bitcoin is a better gold





On ICO's


I don't either!





Posted by Jim Peet at 2/23/2018 10:36:00 AM 0 comments

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9.27.2017

How much gold is there in the world?



How much gold is there in the world?

Excerpt:

Warren Buffett, one of the world's richest investors, says the total amount of gold in the world - the gold above ground, that is - could fit into a cube with sides of just 20m (67ft).xxx But is that all there is? And if so, how do we know?xxx A figure that is widely used by investors comes from Thomson Reuters GFMS, which produces an annual gold survey. Their latest figure for all the gold in the world is 171,300 tonnes - which is almost exactly the same as the amount in our super-villain's imaginary cube.xxx A cube made of 171,300 tonnes would be about 20.7m (68ft) on each side. Or to put it another way, it would reach to 9.8m above ground level if exactly covering Wimbledon Centre Court.xxx But not everyone agrees with the GFMS figures.xxx Estimates range from 155,244 tonnes, marginally less than the GFMS figure, to about 16 times that amount - 2.5 million tonnes.xxx That bigger figure would make a cube of sides 50m (166ft) long, or a column of gold towering 143m above Wimbledon centre court.

Comment: We were having a discussion yesterday from I Kings 10 which has the word "gold" 13 times

Posted by Jim Peet at 9/27/2017 11:22:00 AM 1 comments

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5.21.2013

The Great Gold Rotation - "300 tons"



Gold ETFs Are Liquidating By the Ton

Excerpt:

An ounce of gold, often represented by a single American Eagle coin, is a fairly easy thing to visualize. Even a 400 ounce gold bar, like the ones held at Fort Knox, is a fairly fathomable concept. But when you try to get your head around just how much of the metal an ETF like the SPRD Gold Shares (GLD) owns, it can get a little daunting. And the same is true when you try to track how much they've had to sell as the price of gold slips to a 2-1/2 year low.

"300 tons," says Tom Lydon, the editor of ETF Trends, in the attached video, calling the disposal of over 600,000 pounds of gold so far this year "amazing" and "incredible."

This, of course, as the largest metal-tracking fund has gone from briefly being the biggest ETF, to being a top-5 player after being cut in half to approximately $46 billion in value today, holding just over 1,000 tons of gold in its vaults.

While gold is clearly out of favor forcing the hand of holders to sell into weakness, Lydon says it won't always be that way. "Central banks maybe aren't as concerned," he lists as one reason why gold is down. "I think the average investor, with stocks and bonds doing so well, I think they say, 'hey, I don't need to hedge, so that gold position I had, I'm going to put that into stocks for now.'"
Comment: If (when?) inflation kicks in ... Gold will be safe harbor. Image above is of a 400 oz gold bar. 300 tons would be the equivalent of 24,000 400 oz gold bars.

Posted by Jim Peet at 5/21/2013 11:47:00 AM 3 comments

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11.19.2012

GLD: The Gold ETF



Under the Hood: How GLD Works
Excerpt:


The SPDR Gold Trust (NYSEARCA:GLD) is by far the largest and most popular commodity ETF in the world. The physically-backed gold fund has more than $74 billion in total assets and sees more than eight million shares trade on a daily basis. Not only is it the most popular commodity ETF, but it is also the second largest ETF in the world, and even briefly held the first place slot in 2011. But for all of the recognition and press this fund gets, few actually know how the fund holds its physical gold, which may be some of the reasons that controversy has emerged surrounding this product.
Comment: GLD on Yahoo Finance. Pays no dividend. (I don't have any but find the concept intriguing. Article explains how it all works. Below charts illustrate how GLD tracks the price of gold.




Posted by Jim Peet at 11/19/2012 04:43:00 PM 0 comments

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4.09.2011

Investing in Precious Metals

Gold and silver fever grips investors

Excerpt:

...on Friday silver pushed above $40 a troy ounce for the first time since 1980 and gold pushed to a new all-time high in nominal terms at $1,474.19.

Comment: Last week I did my Investing in Oil piece. Today investing in precious metals.

  • Should you? The problem with investing in precious metals is that you don't want to buy high! And gold and silver have been high and have dropped. Investors don't really know it they will go higher. I would not put all of one's eggs in one basket with metals. But it wouldn't hurt to have some metals
  • Investing options
    • Buy the real thing. One option that I have used is American Precious Metals Exchange. One can buy 20 American Silver Eagles for about $ 800 or one Gold Buffalo Coin for about $ 1475. Keep in mind that coins need to be stored (safety deposit box or personal safe. And they do not pay dividends. There is a cost to purchase (shipping) and for selling (shipping or a trip to a coin shop). Some years ago I bought 20 silver coins on Ebay and the guy stiffed me. I finally got my money back but it wasn't easy. They guy shipped me 1 coin and so had proof of shipping something. It was just 19 lite. I wouldn't recommend the Ebay option
    • Investing in a Precious Metal ETF: Two options are IAU and GLD

Recommendation: I really don't have one but probably if I were to invest in bullion it would be a small percentage of my total portfolio (less than 5%) and either through an ETF or coinage.

Posted by Jim Peet at 4/09/2011 10:41:00 AM 1 comments

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10.01.2010

Gold - $ 1316 oz

Gold Jumps to Another Record

Excerpt:

The nearby gold futures, for October delivery, ended Friday at an all-time high, settling up $8.30, or 0.6%, at $1,316.10 per troy ounce on the Comex division of the New York Mercantile Exchange.

Gold for December delivery, the most actively traded contract, also settled up $8.20, or 0.6%, at $1,317.80 a troy ounce. The settlement marked a new all-time high for the most actively traded contract, which also set an all-time intraday high of $1,322.00 per troy ounce in electronic trading overnight.

A weaker dollar helped gold prices maintain their upward trend. Dollar-denominated gold contracts benefit from a weaker dollar as it attracts buying from traders using foreign currencies. Gold is also considered an alternative currency.



The case for and against 3000$ Gold (Part 1 of 2)


The case for and against 3000$ Gold (Part 2 of 2)

Excerpt:

Historical Hedge against inflation: One of the big reasons why investors have gone to gold is because historically it’s been a good hedge against inflation. The reason is quite simple. When money starts to lose value, hard assets such as gold keep their “relative value”. What I mean is that if the value of currency goes down (inflation does that), money invested in gold will generally more or less keep its value. Since inflation is usually triggered by central banks “printing money”, you can imagine how many are worried about this problem given the way the Treasury resolved the past crisis. Many believe it could take a decade to see inflation pop up but eventually it will.

Hedge against apocalypse: Increasingly, many believe that at any point in time, the whole system could collapse. The idea of course is that our system is based on belief. Belief that currency will be worth something, that banks will be able to pay back deposits, etc, etc. After the major crisis and smaller events such as May’s flash crash, there are more doubters about the system and some believe that there is at least a possibility that it could all collapse. Will it happen? Very unlikely. But if it did and we did return to a “simpler” way of life, Gold’s value would almost certainly pick up big time.

Comment: I've not a clue where Gold is going. I sense that it is overpriced right now but I really don't know. If interested in investing suggest 1 oz coins. A good site for this is www.apmex.com. Of our own investments we are about 1.4% in Silver and Gold. (Silver is a little easier to buy as one can purchase 20 1 oz Silver coins for about $ 540.

Posted by Jim Peet at 10/01/2010 08:04:00 PM 0 comments

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11.09.2009

Gold surpasses $ 1,100

Posted by Jim Peet at 11/09/2009 04:44:00 PM 2 comments

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11.03.2009

Gold = $ 1085

Gold surges to new record high

Excerpt:

Gold surged to a new record high price of 1,085.07 dollars an ounce Tuesday, a day after an announcement of a massive sale of gold by the International Monetary Fund to India.

Prices in London hit 1,085.07 dollars per troy ounce and New York prices reached 1,084.70 dollars, breaking records set last month.

The latest surge came a day after the International Monetary Fund announced it sold 200 tonnes of gold to India's central bank over a two-week period last month for a total of 6.7 billion dollars to bolster its finances.


Comment: Gold, deficit spending, and the Dollar

Gold and other commodity prices have resumed their surge in recent months amid a move away from the dollar, which has been slumping. The move accelerated last month on a report that Gulf states may stop using the greenback for oil trading.

Gold also gets support from fears about higher inflation because the metal is widely regarded by investors as a safe store of value.

Posted by Jim Peet at 11/03/2009 01:41:00 PM 3 comments

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9.03.2009

Gold: the "box of ziti" level

Uh oh. Gold's near $1,000

Excerpt:

The price of gold is nearing $1,000 an ounce. It closed at $997.70 Thursday, up $19.20 from Wednesday. This rise might be a cause for concern.

In the past two years, gold has flirted with the "box of ziti" level -- a bit of slang for $1,000 from a memorable "Sopranos" episode -- a couple of times. And that usually has coincided with a time of immense strain in the markets

Gold hit a record high of about $1,014 in March 2008, just when Bear Stearns was on the verge of collapse before being "rescued" by the Federal Reserve and JPMorgan Chase

A couple of months later, gold got close to $1000 again due to worries about inflation and a weak dollar. Gold's rise matched oil's march to a record high.

Finally, gold got close to $1000 again in late February of this year, a time when investors were fretting that big banks such as Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) might need to be nationalized.


Comment: Never heard the phrase "the "box of ziti" level" before!

Posted by Jim Peet at 9/03/2009 05:07:00 PM 0 comments

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12.20.2008

Have we started down "the Zimbabwean path"?

Is the Medicine Worse Than the Illness?

Excerpts:

... Federal Reserve's announcement last Tuesday that it intends to debase its own paper money. The year just ending has been a time of confusion as much as it has been of loss. But here, at least, was the bright beam of clarity. Specifically, the Fed pledged to print dollars in unlimited volume and to trim its funds rate, if necessary, all the way to zero. Nor would it rest on its laurels even at an interest rate low enough to drive the creditor class back to work. It would, on the contrary, "continue to consider ways of using its balance sheet to further support credit markets and economic activity."

....

One market, only, registered a protest. The Fed's declaration of inflationary intent knocked the dollar for a loop against gold and foreign currencies. In many different languages and from many time zones came the question, "Tell me, again, now that the dollar yields so little, why do we own it?"

...

If the Fed is going to create boatloads of depreciating, non-yielding dollar bills, who will absorb them? Who will finance the Obama administration's looming titanic fiscal deficits? Who will finance America's annual surplus of consumption over production (after 25 more or less continuous years, almost a national trait)? Inflation is a kind of governmentally sanctioned white-collar crime.

...

In ages past, it was so simple. A central banker had one job only, and that was to assure that the currency under his care was exchangeable into gold at the lawfully stipulated rate. It was his office to make the public indifferent between currency or gold. In a crisis, the banker's job description expanded to permit emergency lending against good collateral at a high rate of interest. But no self-respecting central banker did much more. Certainly, none arrogated to himself the job of steering the economy by fixing an interest rate. None, I believe, had an economist on the payroll. None facilitated deficit spending by buying up his government's bonds. None cared about the average level of prices, which rose in wartime and sank in peacetime. It sank in peacetime because technological progress and the opening of new regions to agricultural production made merchandise and commodities cheaper and more abundant.

...

Gold is a hard master, and a capricious one, too, insofar as growth in the world's monetary base depends on the enterprise of mining engineers. But, as we have seen lately, there is no caprice like the caprice of sleep-deprived Mandarins improvising a monetary solution to a credit crisis (or, for that matter, of fully rested Mandarins setting interest rates by the lights of their econometric models).

The times were hard in the 1870s and, for that matter, again in the 1890s, but Americans repeatedly spurned the Populist cries for a dollar you didn't have to dig out of the ground but could rather print up by the job lot. "If the Government can create money," as a hard-money propagandist put it in an 1892 broadside entitled "Cheap Money," "why should not it create all that everybody wants? Why should anybody work for a living?" And -- in a most prescient rhetorical question -- he went on to ask, "Why should we have any limit put to the volume of our currency?"

...

starting in 1971, there would be nothing behind it more than the good intentions of the U.S. government and (somewhat more substantively) the demonstrated strength of the U.S. economy. Still less could he have guessed that the world would nonetheless fall in love with that uncollateralized piece of paper or -- even more astoundingly -- that the United States would enjoy so great a reservoir of good will that it would be allowed to borrow its way to a net international investment position of minus $2.44 trillion ($17.64 trillion of foreign assets held by Americans vs. $20.08 trillion of American assets held by foreigners). "It goes up and up," Mr. Root said of the inflationary cycle, but just how high he could not have dreamt.

Knowledge of the precepts of classical central banking prepared no one to understand, much less to anticipate, the Fed's conduct in this credit crackup. The central bank is lending freely, all right, but not at the stipulated "high" interest rate. As a matter of fact, it is starting to lend at a rate below which there is no positive rate. The gold standard was objective. Modern monetary management is subjective (under Alan Greenspan, it was intuitive). The gold standard was rules-based. The 21st century Fed goes with what works -- or seems to work. What it hopes is going to work for the fellow who fell off the stepladder is more debt and more dollars. Just how much of each can be found every Thursday evening on the Fed's own Web site. Open up form H4.1 and prepare to be amazed. Since Labor Day, the Fed's assets have zoomed to $2.31 trillion from $905.7 billion. And what is the significance of this stunning rate of asset growth? Simply this: The Fed pays for its assets with freshly made dollars. It conjures them into existence on a computer; "printing" is a figure of speech.




Excerpt:

Thatcher Wouldn't Have Gone Wobbly on Detroit - Keynsianism is proof you shouldn't 'leave economics to economists.'Thatcherite principles remain as valid as ever. The freedom of the marketplace is still the only effective mechanism for eliminating poor business practices, identifying productive investment, and providing long-term growth.

...

President-elect Barack Obama has said that he expects things to get worse before they get better. If the experience of the first Thatcher administration is anything to go by, that will certainly be the case. For one thing, some "hidden unemployment," as Mrs. Thatcher called it, will be flushed out into the open. This will be the case with the expected closure of the Big Three's "job banks," which pay almost full wages and benefits to several thousand auto workers for doing nothing.


Comments: Easy money created our credit crisis and yet we continue to make it EZ'r. Buy yourselves some real money: http://www.apmex.com/

Posted by Jim Peet at 12/20/2008 10:13:00 AM 0 comments

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12.08.2007

Gold's waxing and waning allure

Gold’s Quirk: It’s Volatile, but Holders Feel Secure

Excerpt:

James K. Galbraith, an economist and public policy professor at the University of Texas, however, cautioned that investors who are considering a gold purchase now, either to hold or trade, should “be prepared to take a bath.” They should know, he said, what happened to those who waited in long lines outside shops on Jan. 21, 1980, eager to pay more than $900 apiece for coins containing an ounce of gold.


While gold is a hot commodity now, the demand by average investors is still far from what it was then. That was the top of the previous gold bull market, which had begun in January 1975, after President Gerald R. Ford signed a bill legalizing private ownership of gold coins, bars and certificates.


Gold ownership had been illegal since 1933, when, to forestall Americans from demanding that banks give them gold for their dollars, President Franklin D. Roosevelt issued an executive order prohibiting it. (In the early 1970s, President Richard M. Nixon severed the last remaining links of the so-called gold standard that had made currency redeemable for actual gold.)


The early gold buyers in 1975 included Kenneth J. Gerbino, 62, who now manages private accounts and a hedge fund of gold mining stocks and who profits when buyers push up gold’s price.


“I could see that when the federal government prints money to pay its bills, inflation always results, and buying gold was the best way to keep up with it,” recalled Mr. Gerbino, whose business is based in Beverly Hills, Calif. “I’d go to a coin shop, give a guy $1,000 and get some coins.”


Gold started climbing strongly in 1978. In January 1980, with inflation nearly 14 percent, average investors afflicted by gold fever jumped into the market. So did experienced sellers like Anthony Calcagno, who was dealing rare coins in San Francisco. Less than six months earlier, he had purchased many South African Krugerrands for around $300 apiece.



Comment: Gold (or silver) may be purchased at Apmex.com or Ebay. I personally had a bad experience buying silver coins via Ebay where the seller cleverly accepted my order for 20 Silver American Eagles and then sent me ONE and used the shipping documentation as proof that that he had completed the sale. Ebay ultimately (after 90 + days and much documentation and communication) reimbursed me for the failed purchase. My own recommendation is not to make gold or silver a major portion of one's investments.

Posted by Jim Peet at 12/08/2007 10:48:00 AM 0 comments

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