Gold price over $US1600/ounce

Player said:
Don't kill the Golden Goose that lays the golden eggs regularly

.....unless, as Indifference mentions......." An asset "generates" income in a true business sense. This income buys "stuff", so why would we sell an "asset"?
Perhaps to buy a better asset.."

Killing the goose will soon put an end to the supply of eggs.....selling off to invest in a better asset (perhaps a Platinum Goose) is a far better strategy.

I am doing this currently. Sold off a couple of growth assets to re-invest in more income oriented assets..........I want more eggs :p :)
Click to expand...

again - failing to see that gold is not an asset.

gold is money. you might as well be buying USD and stuffing it under your matress.

you can put money int he banks and it will pay interest - similar to depositing your gold in an "account" so ETFs can be created and you get paid a small "dividend"

gold purported as an asset = best con in history
 
Player said:
Don't kill the Golden Goose that lays the golden eggs regularly

.....unless, as Indifference mentions......." An asset "generates" income in a true business sense. This income buys "stuff", so why would we sell an "asset"?
Perhaps to buy a better asset.."

Killing the goose will soon put an end to the supply of eggs.....selling off to invest in a better asset (perhaps a Platinum Goose) is a far better strategy.

I am doing this currently. Sold off a couple of growth assets to re-invest in more income oriented assets..........I want more eggs :p :)
Click to expand...

All I said is I pay $943 for 1/2 an oz

and now It's selling for less ?!?!



My "Example" of selling it was to illistrate why I preferred to see gold being worth more than $943 per 1/2 oz


Of course you'd rather not sell assets, it was an exmaple in my post of why I'd prefer the $ value of gold to be higher 2 than I paid for it rather than lower within 48 hours....
 
I was talking in terms of the post from Indifference (asset producing income) hence the post was about property. Sorry shouldn't have strayed from the Gold focus of the thread. :(

If one can find greater income producing capacity in a different asset then it may pay to sell a lesser performing asset especially when the capital growth potential of the sold asset is likely to underperform in the medium term........viz Melbourne resi IP with woeful yields.

I'll caveat that I am at a different stage of my investing path to others and what I do, shouldn't be construed as anything to copy or emulate..........my path is now income! :)
 
my path is income as well.

i just think people give bullion a bad wrap because it's inert and illiquid - but the point is, that's exactly what it's meant to be.

i put all my super money into bullion regardless of price.
 
Aaron Sice said:
my path is income as well.

i just think people give bullion a bad wrap because it's inert and illiquid - but the point is, that's exactly what it's meant to be.

i put all my super money into bullion regardless of price.
Click to expand...

Foregone the Art Rentals nowadays Aaron or still holding and renting?

I'm now renting space to IKEA on a monthly basis link ;)
 
Aaron Sice said:
again - failing to see that gold is not an asset.

gold is money. you might as well be buying USD and stuffing it under your matress.

you can put money int he banks and it will pay interest - similar to depositing your gold in an "account" so ETFs can be created and you get paid a small "dividend"

gold purported as an asset = best con in history
Click to expand...

Yes, Gold is NOT technically an asset, but rather a Commodity. As it generates NO income.

Yes, Gold is Money.

No, cash / currency is NOT Money.... Currency is a medium of exchange.

Currency is NOT a store of value as it depreciates & can be debased. This is VERY different to Money.

Comparing Gold to Cash under your matress is akin to comparing a house with it's land content. Good juju for the land (gold), bad juju for the house (cash).
 
Intrinsic_Value said:
I dont trust Dr Copper anymore as a guage of future economic growth, ever since it became a play thing of hedge funds and 'alternative investments' for superannuation.

Copper as an indicator of future demand relies on the premise that it is being bought for future use, not to be held as an 'investment'.
Click to expand...

Interesting article in todays Business Speculator, further reinforces my worry that coppers predictiveness as a future indicator of economic growth is being distorted through the accumulation of copper for speculative purposes.


http://www.businessspectator.com.au...estate--pd20111013-MKUXT?OpenDocument&src=kgb

The great China copper mystery has moved into a new phase. Late yesterday Australian time and overnight, China moved in and started heavily buying copper, pushing the price higher.

Then this morning, the Financial Times revealed that last month the China Non-Ferrous Metals Industry Association had disclosed that Chinese copper inventories stood at 1.9 million tonnes at the end of 2010, more than the US consumes in a year. The estimate is significantly higher than the 1.0m-1.5m tonnes range that foreign executives had assumed in the past.

The FT says that the new stock estimates “were presented at the last meeting of the ICSG, a group representing the governments of large copper-producing countries and consumers, in Lisbon at the end of September, according to several people who attended.”

The CNIA estimated that Chinese copper stocks, not including those kept at Shanghai Futures Exchange warehouses, stood at 1.768m tonnes at the end of 2010, up from 1.218m in 2009 and 282,000 in 2008. SHFE inventories were 132,000 tonnes in 2010, putting China’s total stocks at 1.9m tonnes.

The FT did not link the higher than expected copper stockpiles to yesterday’s report from Stratfor revealing how Chinese entrepreneurs and state enterprises had been able to finance copper stockpiles and then use the copper as security to fund their real estate speculation. This is how they circumvented the central government’s credit clamps (China's red metal alert, October 12 and A tale of two Chinas, October 12).

Although Chinese statistics are unreliable, it’s obviously likely that copper storing to fund real estate is a factor in the copper stocks being much larger than the market expected.

And then, in The Australian this morning, Michael Sainsbury reveals that the bottom has fallen out of the Beijing apartment market. That means that the entrepreneurs who have funded apartments via copper stocks would be in big trouble if both apartments and copper fell in value.

They will be very grateful for the Chinese buying. But remember while copper is sitting in warehouses funding real estate, China needs copper for its manufacturing and construction.

Nevertheless, at some point the copper in the warehouses will need to be used and the China stock figures indicate the tonnage is very large.
 
Intrinsic_Value said:
being distorted through the accumulation of copper for speculative purposes.
Click to expand...
Are they stockpiling for speculative purposes? I think it's certainly a possibility, but given that it reads like some of those stockpiling are state owned enterprises... where else are they going to put their reserve funds?

Into US securities where they are worried about the trillions they already hold?
Into Eurozone debt or assets when the fiscal and economic union sits on the edge of collapse?
Into Gold where they are already increasing imports (even though they are the largest producer in the world), with the potential of pushing the price into parabola if they buy more?
Keep in their own currency which is increasing in supply by 20% odd per annum (diluting the value of their holdings)?

Perhaps they understand that there's a storm coming and they'd rather be holding physical assets that are worth SOMETHING, rather than paper assets that may be worth nothing.... I don't think it's necessarily speculative.
 
Last edited:
Then this morning, the Financial Times revealed that last month the China Non-Ferrous Metals Industry Association had disclosed that Chinese copper inventories stood at 1.9 million tonnes at the end of 2010, more than the US consumes in a year. The estimate is significantly higher than the 1.0m-1.5m tonnes range that foreign executives had assumed in the past.
Click to expand...


But isn't China consuming many multiples times more cement, steel, coal, and everything else than the US? So perhaps if it's a years supply of copper for the US, it might only be 3 months worth for China?


See ya's.
 
topcropper said:
But isn't China consuming many multiples times more cement, steel, coal, and everything else than the US? So perhaps if it's a years supply of copper for the US, it might only be 3 months worth for China?


See ya's.
Click to expand...

you raise a good point, my concern is that copper is traditionally a leading indicator of economic activity, but this is based on purchases to be consumed in the not too distant future, once entities of one form or another start accumulating commodities as an 'asset to hold' thats when the futre forecasting activity becomes more muddy.

And its not just china, check out your supperannuation statement, if its a standard one there will be a small allocation to 'alternative investments', a small portion of this 'alternative investment' will be commodities. But this rise in the demand for commodities as an alternative investment has only arisen in the last couple of years. Therefore what proportion of recent copper purchases is for productive use, and what proportion is for an 'asset to hold'.

These are questions i am reflecting upon, i dont have the answers, but i am suspicious, therefore i reduce the validity of copper as a forecasting tool in the current environment.
 
hobo-jo said:
Are they stockpiling for speculative purposes? I think it's certainly a possibility, but given that it reads like some of those stockpiling are state owned enterprises... where else are they going to put their reserve funds?

Into US securities where they are worried about the trillions they already hold?
Into Eurozone debt or assets when the fiscal and economic union sits on the edge of collapse?
Into Gold where they are already increasing imports (even though they are the largest producer in the world), with the potential of pushing the price into parabola if they buy more?
Keep in their own currency which is increasing in supply by 20% odd per annum (diluting the value of their holdings)?

Perhaps they understand that there's a storm coming and they'd rather be holding physical assets that are worth SOMETHING, rather than paper assets that may be worth nothing.... I don't think it's necessarily speculative.
Click to expand...

possibly - but surely China are not the speculating type...? i mean, copper? why not lead? or U238? there's so many better things they could make a return on, but then one has to ask why they feel the need to hoard 1.9m tonnes of the stuff, that is pretty much only used these days for a bit of electrical components, electrical wiring (being phased out) and coins?

there's a mine in Wodjina that mines 75% of the world's Tantalum - a superconductor for electrical components - SEVENTY FIVE PERCENT. Japan, India and Malaysia cant get enough of the stuff, yet the price is artificially depressed.

weird old time to be in commodities.
 

Attachments

  • Food & Gold.JPG
    Food & Gold.JPG
    12.1 KB · Views: 49
Aaron Sice said:
possibly - but surely China are not the speculating type...? i mean, copper? why not lead? or U238? there's so many better things they could make a return on, but then one has to ask why they feel the need to hoard 1.9m tonnes of the stuff, that is pretty much only used these days for a bit of electrical components, electrical wiring (being phased out) and coins?

there's a mine in Wodjina that mines 75% of the world's Tantalum - a superconductor for electrical components - SEVENTY FIVE PERCENT. Japan, India and Malaysia cant get enough of the stuff, yet the price is artificially depressed.

weird old time to be in commodities.
Click to expand...

Talison mines this stuff also (along with Lithuim) in our South West, though I'm led to believe China holds the majority of rare earth elements?
 
redwing said:
I'm led to believe China holds the majority of rare earth elements?
Click to expand...

That's because nobody else wants to touch the filthy process of separation and refining. Molly Corp was shut down in the US for this reason and Malaysia is still resisting Lynas doing their dirty work there.
 
Aaron Sice said:
possibly - but surely China are not the speculating type...? i mean, copper? why not lead? or U238? there's so many better things they could make a return on, but then one has to ask why they feel the need to hoard 1.9m tonnes of the stuff, that is pretty much only used these days for a bit of electrical components, electrical wiring (being phased out) and coins?

weird old time to be in commodities.
Click to expand...

Care to explain?
 
hobo-jo said:
It's passive now, as was the last Gold bull market until it went parabolic and quintupled in less than 12 months. In my opinion we are nearing the same tipping point in the current bull market and the gains will be magnificent.
Click to expand...

Exactly, history may repeat itself.....
 
i just heard china arent "stockpiling", rather they are mining and not declaring it to the exchange, gong straight into storage.

same with gold, its going straight from refinery to vault.

explains a few things, actually.
 
You must log in or register to reply here.
Back
Top