I hold some gold and gold miner shares (gold proxy with added yield from dividends) within my portfolio. As the US dollar starts to weaken, interest rates continue to offer almost no yield, and the US economic data starts to roll over, then I think that gold will continue to rise through this year.
When you also realise that most Governments need to weaken their currency over time then it becomes apparent that Gold is also a reasonable long term hold/hedge against currency devaluation and price inflation. DYOR, etc. but personally I like holding about 10% in gold as it helps me sleep better.
My point is that they’ve essentially taken the rough weight of metals on the asteroid and times it by the commodity in question spot price and decided that’s good enough for the article.
It’s not injecting quintillions into the system that would make the monetary system fail that I am highlighting. It’s the fact that the spot rate of all of these metals would become 0.00000000000001% of their current values as supply would vastly outstrip demand.
Thus the quintillions would never actually materialise.
Of course. But the goal isn’t to bring it back to earth, simply mining rare metals and constructing devices in space or on the moon will show how much material is really available to us. At this point I see the economy for metals to change rapidly.
Some of the smallest asteroids contain trillions of dollars worth of these metals.
I think the main application for space mining will be to produce materials for building things in space and producing fuel in space. I don’t think it will have much effect on the economics of metals such as Gold on Earth.
Maybe the really rare metals that have industrial uses would be affected
Great article about gold in Investors Chronicle today. It explains how the price of gold changes in relation to stocks, government bonds (particularly gilts), and more.
I found this part highly learning and wanted to share.
It’s often said that gold protects us against inflation. This is both true and false.
It’s true in the sense that over the long term gold has risen while consumer prices have risen, and so holding gold has preserved our purchasing power. The long term here is very long. Emperor Augustus (who reigned from 27BC to 46AD) paid his centurions 38.6 ounces of gold a year. That’s equivalent to just over £46,000 – which is the salary of a captain in the British army now. Gold has thus kept pace with nominal wages over the last 2,000 years.
But it is false in another sense. Gold does not protect us from near-term variations in inflation expectations. In fact, if we measure these by the difference between index-linked and conventional gilt yields, they have moved in the opposite direction to gold. The metal often does well when inflation expectations fall, and badly when they rise. The fact that gold has hit a record high at a time when inflation expectations have fallen (and actual UK CPI inflation has hit a three-year low) thus fits the historic pattern.
Emphasis from me. Not sure about that part, but I found it fascinating.
I was intrigued reading your arguments about gold and various strategies related with it. My 2 cents - gold is not good diversification strategy if you invest long term. Please take a look at Warren Buffet annual letter, which is very interesting to read. Some quotes below:
On March 11th, it will be 77 years since I first invested in an American business. The year was 1942, I was 11, and I went all in, investing $114.75 I had begun accumulating at age six. What I bought was three shares of Cities Service preferred stock. I had become a capitalist, and it felt good.
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Let’s put numbers to that claim: If my $114.75 had been invested in a no-fee S&P 500 index fund, and all dividends had been reinvested, my stake would have grown to be worth (pre-taxes) $606,811 on January 31, 2019 (the latest data available before the printing of this letter). That is a gain of 5,288 for 1. Meanwhile, a $1 million investment by a tax-free institution of that time – say, a pension fund or college endowment – would have grown to about $5.3 billion.
Let me add one additional calculation that I believe will shock you: If that hypothetical institution had paid only 1% of assets annually to various “helpers,” such as investment managers and consultants, its gain would have been cut in half, to $2.65 billion. That’s what happens over 77 years when the 11.8% annual return actually achieved by the S&P 500 is recalculated at a 10.8% rate.
Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400-fold during the last of my 77-year periods. That’s 40,000%! Suppose you had foreseen this increase and panicked at the prospect of runaway deficits and a worthless currency. To “protect” yourself, you might have eschewed stocks and opted instead to buy 31⁄4 ounces of gold with your $114.75.
And what would that supposed protection have delivered? You would now have an asset worth about $4,200, less than 1% of what would have been realized from a simple unmanaged investment in American business. The magical metal was no match for the American mettle.
I have a stash of gold coins and silver bars and coins but I have not added to it since freetrade arrived. There is something about feeling the weight in your hand and seeing the beauty in precious metals up close though, slightly addictive I buy quarter or half oz Britanias every year for my godson for when he is older hopefully it will be worth something when he is 21 or so. If EUA pays off I might get a palladium bar
I buy quarter or half oz Britanias every year for my godson for when he is older hopefully it will be worth something when he is 21 or so. If EUA pays off I might get a palladium bar 