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Bumble

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  1. Like
    Bumble got a reaction from AuricGoldfinger in Retirement...   
    If house prices are dropping and there are lots of people falling behind with mortgage payments, there is no point the banks repossessing properties, because there is no market to sell them into, and prices will only fall further if they try. Banks don't want lots of vacant properties on their books, because of the cost of insurance and maintenance, and the risk of vandalism. Sitting tight and hoping prices recover and payments resume is usually the best bet. The big problem is that the extent of the price falls and the arrears can go unreported. A bank's balance sheet may look healthy, but who is to say whether its mortgage book is worth what it claims to be, or what proportion of loans will be delinquent. The drawback of bailing out banks is that they are allowed to continue doing buiness even though they would be technically insolvent if they were compelled to value their assets realistically.
  2. Like
    Bumble got a reaction from caloundracats in Wealth Tax   
    Many political activists have called for a wealth tax, but I find the concept beset with practical difficulties. I remember Dennis Healey, a British Labour chancellor of the exchequer in the 1970s, saying in an interview years later that he had wanted to introduce a wealth tax but couldn't find any practical way of implementing it.
    Firstly, there is a problem with defining exactly what it is that I own. If I have money in a bank account, then I don't own it; it is legally the property of the bank and I am just a creditor of the bank. (If anyone reading this has just learned that for the first time, please feel free to say, "Holy bad!" as loudly as you like.) But I can hardly suppose that a government would allow that money in a bank account doesn't count towards one's wealth. The concept of ownership would have to be widened to include debts owing, but that itself is fraught with difficulties.
    Secondly, there is a problem with valuing collectables, especially if they are illiquid. Who is to say what they are worth? What would be the procedure for valuing them, and for challenging that valuation?
    Thirdly, there is a problem with promises of future receivables, such as pensions. Some people have expectations of pensions from other parties, such as employers, others have private pensions, others do not have pensions at all under that name, just investments or assets that they intend to draw down upon when they retire. I don't see any simple way to treat these on an even footing. I'm fairly sure that a public sector employee approaching retirement age would be very surprised to learn that their pension is worth £500,000 and this together with the value of their house would push them over a wealth tax threshold. I've no doubt they would want their pension pot exempted from the tax, but this just reinforces the difficulty in treating investments equitably.
    Fourthly, there will inevitably be all kinds of exceptions that don't count towards the assessed value, and these would give rise to anomalies. No doubt it will also give rise to clever people devising schemes for managing assets in such a way as to exclude them from the assessment. If I set up a private company and transfer some of my assets into it, who is to say what the shares in the company are worth?
    Fifthly, there is a problem in valuing assets, such as shares, when they are owned in large quantity by a single individual. Jeff Bezos is often described as having a net worth over $120 billion, because he owns nearly 80 million shares of Amazon at over $1500 each. But that is really a market cap, not a value. If he sold his shares the price would fall considerably and the total he would receive would be far less.
    The above are only concerned with how the tax applies: there is also the issue of how it would be enforced. How can the government discover the silver coins that I have buried in my garden, or the timeshare I own in Greece? Or for that matter, what will happen when wealthy people just decide to leave and reside elsewhere?
    Are there any examples of countries implementing an effective wealth tax?
  3. Thanks
    Bumble got a reaction from Abyss in Gold Monitoring Thread £ only   
    The markets were waiting for the press release from the FOMC meeting. This was issued at 14:00 EST, which is 19:00 GMT. The Fed's comments were interpreted as 'dovish', meaning less chance of an interest rate increase, or of further monetary tighteninng. This was positive for gold, so traders moved into long positions.
  4. Haha
    Bumble got a reaction from 5huggy in Gold Monitoring Thread £ only   
    I ordered 100 tons of gold for my personal stash this morning. Somebody at the dealer must have leaked the news.
  5. Thanks
    Bumble got a reaction from KDave in Diesel and platinum   
    This is an important point. Bear in mind that catalytic conversion is a chemical process, and in chemistry what matters is not the mass of substance you have but how many atoms or molecules. That is why chemists usually work with moles as a unit, not mass. Because platinum atoms have a much higher relative atomic mass than palladium, even at current prices (Pd about $1300/Toz, Pt about $800/Toz) you get more palladium atoms for your dollar than platinum atoms. If (big if) platinum and palladium were chemically equally effective as catalysts, then you would only need 5g of palladium to do the same job as 9g of platinum. I have searched for data on the web about the relative effectiveness of these metals as exhaust catalysts, but I have not managed to find anything concrete. But there is definitely no reason to suppose they are equally effective on a mass-for-mass basis. In any case, car engines are usually designed with a particular exhaust system in mind: switching from one catalyst to another is not so straightforward.
  6. Like
    Bumble got a reaction from sovereignsteve in Gold silver ratio   
    The gold silver ratio is irrelevant. Just ignore it. The ratio at which gold and silver come out of the ground has no bearing at all on their relative values. Platinum is much rarer than gold, but it is not more valuable. Silver and gold have different uses and are not substitutable, so there is no particular reason for their prices to be related. When gold goes up it tends to drag silver up with it, and because silver is a much smaller market, it is more volatile, i.e. it goes up faster and it goes down faster. So the GSR is low when both gold and silver are expensive, and high when both are cheap. But this is not a predictive indicator, it merely records how things currently stand. In the long run, it is not unlikely that the GSR will continue to rise. Silver is primarily an industrial metal, while gold is mainly used for jewelry and is a safe haven asset. Make your purchase accordingly.
  7. Thanks
    Bumble got a reaction from dicker in Mega Salaries   
    I like the approach of Rob McEwen of McEwen Mining. As CEO, he pays himself a salary of $1 a year. He owns about 25% of the shares in the company, so the only way he can benefit is if the share price goes up. A nice way to align his interests with those of the shareholders.
  8. Like
    Bumble got a reaction from NumisNewbie in Gold as a Growth Investment ? - Take Note   
    A great deal depends on your timescales. Gold has not done well since 2011, but what if we start at 2000? 
    This chart compares gold with stocks in percentage gain terms, from a base in 2000. You would be much better off in gold over this entire period. Of course, if you had had the foresight to put everything into stocks in 2009 at the bottom, you would have done better still, but few people, if any, can consistently time the market correctly. It is best just to have a portion of your investments in gold because it is a diversifier and also a kind of insurance. It is uncorrelated with most other assets and it is not anybody else's liability.

  9. Like
    Bumble got a reaction from KDave in New leg beginning in USD bear market   
    For myself, I'm no more convinced of a fall in USD than I was last year. The USD is the least dirty shirt in the laundry. Apart from a few small but solid currencies such as CHF or SGD, what can the USD fall against? The EUR? Europe is a basket case. JPY? Japan is the world leader in government indebtedness and money printing. CNY? China will continue to devalue to offset the effect of trade wars. GBP? It might rise against USD if if if Brexit resolves itself satisfactorily. AUD and CAD? Overvalued and likely to fall if there is a worldwide recession, though arguably not bad in the long run. RUB? Might do well, but who knows what those Russian jokers will do next.
    If there is any kind of financial crisis, money will move into the USD, not out of it. It doesn't matter that it is a big heap of nothingness: it is liquid and that is what matters most in a crisis. The only respect in which the USD can fall is in its purchasing power, which is another way of saying high price inflation might return. Even that is not certain, given that we might get more deflation if China cannot sort out its debt problems. PMs are good to hold in any event, but I don't see a good reason to short the dollar.
  10. Like
    Bumble got a reaction from MickD in Equities going parabolic - Is the crash near?   
    "What are the markets scared of...?" Well there are plenty of possibilities.
    1. The big run-up in US stock markets is mostly down to the major tech stocks. They have grown so much that they account for almost half of the entire value of the S&P 500. Arguably, they are in a bubble: they are priced on the assumption that they have a monopoly, but monopolies in the tech sector don't tend to last.
    2. The huge rush into company share buybacks, paid for with debt, will put a lot of pressure on companies as interest rates rise.
    3. Real estate is in a bubble again, in many parts of the world.
    4. Auto loans in the USA are in a bubble, again.
    5. Official figures flatter the economic reality. Unemployment figures are low because they do not count those who are not looking for work. Employment figures are low. Income tax receipts are low. Price inflation is understated. Retail sales figures are inflated by channel stuffing.
    6. The European banking sector is an accident waiting to happen. Many EU banks have huge levels of underperforming loans and a great deal of exposure to Turkey, Greece, and many South American countries that may default.
    7. Brexit is still unresolved.
    There are lots of other things one could add. Admittedly, at any given time there are always problems one can point to. Things were bad in 2008 and the stock markets proceeded to perform well. One important unknown is how governments will react.
  11. Like
    Bumble got a reaction from Goldhooked in Best way to leave your country with your PM's without declaring .   
    If you are carrying several gold coins or bars, with a value of a few thousand GBP or more, then you can expect questions about where you obtained it, what the source of your funds are, and what you are planning to do with it. Customs officials typically have greater powers of search and confiscation than the police. If they decide they don't like your answers, they may just decide to hold on to your gold, and you will have the devil's own job getting it back.
    I would not advocate trying to evade taxes or excise duties. The main issue is simply being able to take your property with you without confiscation. Depending on your destination, you may well be better off just buying some gold when you arrive.
  12. Haha
    Bumble got a reaction from Agpanda in Gold Monitoring Thread £ only   
    1262 maybe. Let's not get too excited!
  13. Like
    Bumble got a reaction from JunkBond in Retirement...   
    You don't really want silver to go to $500 per ounce, or gold to $50,000 per ounce, because if that happens it probably means that a loaf of bread is $20, filling your car with gas costs $400 and a beer is $80. All it will mean is that you are less poor than others who have no precious metals, because at least your wealth has retained its purchasing power.
  14. Like
    Bumble got a reaction from JunkBond in Retirement...   
    You don't really want silver to go to $500 per ounce, or gold to $50,000 per ounce, because if that happens it probably means that a loaf of bread is $20, filling your car with gas costs $400 and a beer is $80. All it will mean is that you are less poor than others who have no precious metals, because at least your wealth has retained its purchasing power.
  15. Thanks
    Bumble got a reaction from PansPurse in Retirement...   
    I think you are confusing two different things here. In the UK, health care is paid for out of general taxation. National insurance pays for pensions, sick pay and benefits. National insurance is a ponzi scheme: the money you pay in is immediately disbursed to recipients of the benefits. In the private sector this would be illegal, but hey, we're the government, so there.
  16. Like
    Bumble got a reaction from KDave in Funny presentation on how to choose a girlfriend   
    Warning: this video is highly politically incorrect. Do not watch if you are offended by such things.
    https://www.youtube.com/watch?v=XuI6GTY9eVc
     
  17. Like
    Bumble got a reaction from KDave in Funny presentation on how to choose a girlfriend   
    Warning: this video is highly politically incorrect. Do not watch if you are offended by such things.
    https://www.youtube.com/watch?v=XuI6GTY9eVc
     
  18. Like
    Bumble got a reaction from KDave in Funny presentation on how to choose a girlfriend   
    Warning: this video is highly politically incorrect. Do not watch if you are offended by such things.
    https://www.youtube.com/watch?v=XuI6GTY9eVc
     
  19. Like
    Bumble got a reaction from KDave in Funny presentation on how to choose a girlfriend   
    Warning: this video is highly politically incorrect. Do not watch if you are offended by such things.
    https://www.youtube.com/watch?v=XuI6GTY9eVc
     
  20. Like
    Bumble got a reaction from KDave in Gold Monitoring Thread £ only   
    I'm not a Dent fan either, but to be fair to him, he does have one thing right, which is that one of the major factors that influence future developments is demographics. Everybody gets older at a rate of one year per year and this is not going to change, so the future distribution of people by age is entirely predictable. Most western countries are about to tumble over the demographic cliff as the baby boom generation retires and this will have major consequences. Dent thinks that the next financial crash, when it comes, will result in a huge deflationary bust that will send all prices, including gold, downwards. This will only be true if governments and central banks sit on the sidelines and do nothing. We know from experience that they won't. Their response will be to print money and reduce interest rates, and they will keep doing so until price inflation is restored. This will be positive for gold, not negative.
  21. Like
    Bumble got a reaction from KDave in Funny presentation on how to choose a girlfriend   
    Warning: this video is highly politically incorrect. Do not watch if you are offended by such things.
    https://www.youtube.com/watch?v=XuI6GTY9eVc
     
  22. Like
    Bumble got a reaction from Abyss in Worth going into the Paper markets?   
    I think there are two separate issues here: whether it is worth buying shares in companies in the gold sector, and whether it is a good idea to do so through a fund such as GDX.
    As to owning shares in gold companies, remember that they are extremely volatile and can go down a lot in bad times. Depending on where they are operating, there are political risks: sometimes countries nationalise their assets or slap a huge tax on them and your shares might be worthless. Natural disasters can happen, spills of toxic chemicals, strikes, environmental protests, criminal gangs or corrupt politicians wanting a share of the proceeds, etc. Also, many companies are run by idiots or fraudsters who will destroy value. Mark Twain's definition of a gold mine as a hole in the ground with a liar standing beside it is still true. That said, they can do very well in good times when metal prices are rising, and they provide leverage. If you are going this route, you need to learn about the sector and be willing to do some research into the companies there.
    As to funds such as GDX: the advantage is that they provide diversification across many companies, so risk is reduced. The disadvantage is that some of the companies in their portfolio have a poor track record of creating value and may be overpriced. The paradox of index-tracking funds is that the higher the price of a share goes, the more funds needs to own it to retain their index-tracking. An experienced investor is able to say this share has gone too high so I'll sell and take the profit. Index trackers can't do that. There are of course some other managed funds where the managers will pick stocks for you. These can also be a good option if you are happy with the fees and the liquidity.
  23. Like
    Bumble got a reaction from Abyss in Worth going into the Paper markets?   
    I think there are two separate issues here: whether it is worth buying shares in companies in the gold sector, and whether it is a good idea to do so through a fund such as GDX.
    As to owning shares in gold companies, remember that they are extremely volatile and can go down a lot in bad times. Depending on where they are operating, there are political risks: sometimes countries nationalise their assets or slap a huge tax on them and your shares might be worthless. Natural disasters can happen, spills of toxic chemicals, strikes, environmental protests, criminal gangs or corrupt politicians wanting a share of the proceeds, etc. Also, many companies are run by idiots or fraudsters who will destroy value. Mark Twain's definition of a gold mine as a hole in the ground with a liar standing beside it is still true. That said, they can do very well in good times when metal prices are rising, and they provide leverage. If you are going this route, you need to learn about the sector and be willing to do some research into the companies there.
    As to funds such as GDX: the advantage is that they provide diversification across many companies, so risk is reduced. The disadvantage is that some of the companies in their portfolio have a poor track record of creating value and may be overpriced. The paradox of index-tracking funds is that the higher the price of a share goes, the more funds needs to own it to retain their index-tracking. An experienced investor is able to say this share has gone too high so I'll sell and take the profit. Index trackers can't do that. There are of course some other managed funds where the managers will pick stocks for you. These can also be a good option if you are happy with the fees and the liquidity.
  24. Like
    Bumble got a reaction from Tn21 in Gold Miner Picks   
    If anyone is still interested in gold mining shares after the poor performance of the last six months, Marin Katusa and Rick Rule at the Silver and Gold Summit identified these as their favourite picks at the moment (Nov 2018):
    B2Gold (BTG.NYSE) Wesdome (WDO.TSX) Pure Gold  (PGM.TSXV) Ivanhoe (IVN.TSX) Equinox Gold (EQX.TSXV) West African Resources (WAF.TSXV)
  25. Like
    Bumble got a reaction from AuricGoldfinger in Has gold peaked?   
    The price of gold won't take off until money is ready to move out of other investments. At the moment, lots of investors are simply buying FAANG stocks because they keep going up, so it is difficult to justify not being in them. Fund managers do not want to buy other things and then have their investors say: Why are we paying fees to you when we can do better just owning Amazon stock? It will take a distinct catalyst to shake investors out. Even if a new financial crisis happens, gold may not be the immediate beneficiary. When investors panic they buy USD because it is the largest and most liquid 'asset' in the world. They will also buy US bonds, provided the crisis is not an American sovereign debt crisis. This will push up the dollar, and hence push down gold, or at least the XAU/USD cross. It is even quite possible that if the crisis is a sovereign debt crisis, money might flow into stocks, on the basis that you are better off trusting your money with the boards of Microsoft/IBM/Ford than the governments of Italy/Turkey/Argentina.
    Gold is really more your backstop or insurance. It is nobody else's liabilty and will not go to zero. It is not worth worrying too much about the near term price.