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Bumble

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  1. @goldmember I remember an interview with Peter Hug of Kitko, who is a professional trader, in which he recalled how back in 1979/80 he was trading gold for a firm in Toronto, and people would queue up in the street to buy gold coins. One day he looked out the window and saw their mailman in the queue and he turned to his assistant and said: that's the top, we should sell now. That was right on the peak in 1980. Similar things happened with Bitcoin in December 2017. I started to find articles in general interest magazines about this wonderful new craze called cryptocurrency. People on forums said they were borrowing money on their credit cards to buy Bitcoin. When things like that happen, the bubble is in and it's time to sell. You don't need to short, and you may miss the exact top, but there's no need to be greedy, just be long for the main part of the run-up.
  2. If you bought gold coins as a kind of insurance against governments screwing everything up, then you did well and you should continue to hold them. Selling them would be like selling your seat on the lifeboat of the Titanic. On the other hand, if you bought some gold assets with a view to making some profit, or at least preserving your worth, then you are in the tough position of having to judge whether a top has been reached. It is the same decision you face with any investment that goes up in value: do you let it run because it's doing well, or take profit? It is never bad to take some profit, but you may be able to do better if you can spot the signs of a bubble forming. When the proverbial shoe-shine boy tells you he is buying gold, or you see articles in non-financial magazines about gold, then it is time to get out.
  3. I agree with Vand - it is much too early to think about selling gold to buy stocks. Gold could run to $2000 over the next couple of years, and the Dow could drop 20%. The only thing that will hold the stock markets up is loose monetary and fiscal policy. Trump keeps pointing to the performance of the stock market as an indicator of his success, so he needs it to stay up to get re-elected. Further easing would be bullish for gold. The time to sell out of gold is when the manic bubble curve starts to appear. We had one of these in 2011-12, but no sign of another yet.
  4. As far as your Britannias are concerned, these are currency in the UK, and as such are not subject to capital gains tax (CGT). Sovereigns, likewise. You made a good choice to buy Britannias: if you had bought krugs or gold eagles, or something else, then selling them would create a chargeable gain. HMRC treats cryptos as financial assets, not as currency. For the vast majority of people, selling them would be treated as disposal of a chargeable asset, and you would be liable to pay CGT. The only exception would be if you are a professional trader in cryptos, in which case gains could be assessed as income. The odd thing about the taxation of cryptos is that you create a chargeable disposal event every time you spend crypto. If you buy a cup of coffee with BTC then strictly speaking you should use the BTC/GBP rate at the time of your purchase to calculate how many GBP you spent, and then make a record of how much gain you made. In practice, of course, this makes the reporting of crypto transactions infeasibly complex. Tax authorities around the world have not yet come up with a solution for this.
  5. https://www.dailymail.co.uk/news/article-7288687/Massive-2kg-gold-nugget-worth-hundreds-thousands-dollars-discovered-lucky-digger.html
  6. Divi stocks are nice, but you still have to watch out. Take a look at Saga (SAGA.L) for a horror story. Personally, I don't care for the finance sector.
  7. As of today, Comex/Nymex are reporting slightly over 300 million ounces of silver in their warehouses. Of this, JPM owns about half. If you had the means to purchase 50 million ounces, that would certainly be a lot - more than Brink's currently own at Comex - but I don't see how you would be prevented from removing the silver if it is yours. Unlike the LBMA, this is allocated metal: it is not in a pool owned by the exchange itself.
  8. A silver contract is for 5000 troy ounces. Even a mini-contract is 1000 troy ounces, so $16,000 would be your minimum size. Plus, there would be a broker fee, and if you want to take delivery, you have to arrange that yourself. Ok, if you live in NY and can drive to the warehouse, otherwise an extra cost. It's probably not feasible for retail investors, though I daresay companies that make coin blanks and rounds could use it.
  9. I own about as much gold as I plan to hold. I am buying into gold miners, since even with the recent rises, they are extremely cheap in proportion to the price of gold itself. Mining is a risky investment though.
  10. A popular meme of the present is that the next big financial blow-up will be mainly concerned with corporate bonds. Companies have been taking advantage of extremely low rates and borrowing vast amounts. This leads to the companies being downrated in their credit rating score. There has been a huge increase in BBB rated corporate debt in the last ten years. The gap between BBB and BB is the difference between investment grade and junk grade. Many investment funds, including pension funds, cannot invest in junk grade debt, so any company that is downgraded to BB triggers a forced selling, pushing the price down. In a recession, or even the expectation of a recession, companies will be desperate to avoid being downgraded to BB, so they will sell assets and slash dividends to keep their earnings up.
  11. I don't think they are stealing from anyone. They are acting as a buyer of last resort for bonds that nobody else would buy at such inflated prices. By doing this, they are keeping interest rates very low and causing asset values to rise. It is bad because assets such as real estate become so expensive that people cannot afford them, and also because it enables companies to issue huge quantities of debt to buy back their own shares, which creates instability.
  12. There is an interesting recent article by Alasdair Macleod of Goldmoney in which he makes a case for believing that there is a whale accumulating large quantities of silver via futures contracts. He speculates that it is the PBOC securing a supply of silver for China.
  13. I can understand why you might buy a bond yielding 1% in the expectation that rates will drop to zero and so its value will increase, but not why you would buy one at -2.64% and hope to sell it if rates go even further negative. If rates go further into negative territory, people will just buy whatever tangible assets they can and this will send asset prices soaring. There is no value in owning bonds in such an environment. I can only suppose that the central banks themselves are the purchasers of these bonds. Having permanant negative interest rates is really a kind of debt jubilee by the back door.
  14. The world of bonds just seems to get more and more crazy. According to Bloomberg and the FT, there is now more than $13 trillion worth of negative-yielding bonds in the world. Nor is it just investment grade, sovereign bonds. There are now 14 euro-denominated junk bonds with negative yields. So now you have to pay for the privilege of buying bonds with a serious risk of default, and still have a guaranteed loss in the event that they do not default. The issue even extends to zero-coupon bonds. on 10 July Germany issued zero-coupon bonds and they were purchased at a premium of 2.64% over par. So now you can buy bonds with no dividend and be guaranteed to lose money whatever happens. I suppose this is an example of return-free risk. I was also amused to note that the article in Investopedia on "Can a bond have a negative yield?" was recently edited and updated, because the previous version said "It is unlikely that a bond will have a negative yield but there are a few rare exceptions". I even have an old economics textbook that assures me that negative interest rates are impossible.