gauging your gains

[HawkHybrid]

if silver rises 10%(£) at the same time as the £ losing

10% of it's purchasing power, have you gain anything?

part of me see pm's as a way to make a profit(£) and

part of me see it as a retention of purchasing power.

which is more correct?

 

HH

[HelpingHands]

The answer probably relates to your time frame.

Over decades then it is certainly for retaining purchasing power.

In the short term all of the jigsaw pieces do not react at the same time.  Have food prices shot up when the £ dropped after Brexit or are the supermarkets still having their price wars and paying their staff as little as possible?

 

[KDave]

If you measure it in sterling you have made a profit, if you measure it in platinum you have made a loss and if you measure it in holidays to Barbados you have probably maintained purchasing power because Brexit has made all holidays everywhere more expensive. 

[richo]

Virtually everybody in the country has made a loss since brexit with the currency hit, but it only becomes material if you crystallise it vs another currency, or if it feeds through to physical higher prices, let's say food etc

[HawkHybrid]

15 hours ago, KDave said:

If you measure it in sterling you have made a profit, if you measure it in platinum you have made a loss and if you measure it in holidays to Barbados you have probably maintained purchasing power because Brexit has made all holidays everywhere more expensive. 

 

should I measure it in cheapest energy for sale, or historic

use of money(silver). if this is what people mean by rising

pm prices, will I be any closer to my goal of owning my own

home? do we need pm's to rise above the rate of inflation?

 

(buy gold when you think it's money(silver) value is going

to fall? )

 

HH

 

[KDave]

If owning your own home is the goal, then measure the price of the asset you are saving in vs the price of the house you are looking at no? The gains/losses are relative to what you are buying as per my previous tongue in cheek example, or am I being too simplistic? The value of silver measured in barrels of oil is academic if you are going to convert silver to sterling to pay for a holiday to Barbados. 

Whether or not silver is a good/best vehicle to use for your purpose is another question, the answer to which is anyone's good/best guess really. Will the silver market out perform future government intervention in the housing market, given the recent trend to support it at all costs and the potential for more QE and foreign speculative capital flowing into this market given the recent sterling devaluation by the BoE? As someone sharing your position and goal specifically, I am willing to put a little bit of my money on silver, but I am not confident. What else can we do.  

[richo]

@KDave

housing in the UK is the single best asset or investment if you want to call it that, you can own. Now I know it's technically where you live, so investment is a mute point to some, and critical to many others, but, successive Govts for decades now have heavily supported it as a matter of core policy. Combine that with what is a limited land mass, and a small finite number of desirable leafy areas, and it's as solid as a rock, especially if you're in a decent area.

[KDave]

It is certainly a good place to put money within reason, given that shelter is by and large a human requirement to live - later in life you are going to need it, so buying a place to reduce overheads is a good use of capital, although like you I struggle to call it an investment given that it will still be a drain on your wealth to maintain. Buying is more a way to reduce the liability of shelter, though many people have become confused in recent years as 'house prices only ever go up', making what was once a liability into some peoples best (and in many cases only) asset. If banks can continue to lend ever higher amounts to people into the future then yes, houses will continue to only go up, in sterling terms at least. Lets measure houses in everything other than sterling and see how much higher they get