2020 - time to sell your gold?

[HawkHybrid]

it depends on your timeframe.

gold is slightly up and stock are down significantly. this creates

a possible opportunity to re-position your allocation to each.

 

https://www.youtube.com/watch?v=-0jA4sU2Od0

if the above chart plays out then soon(ish) will be the time to

sell gold for stocks and ride the wave 5 to all time highs.

this wave 5 may happen within 4 years so you need to sell

stocks before wave 5 ends and a bigger drop occurs(ideally).

first you need to research and recognise what you are likely

to be facing. then you can make an informed decision as to

whether or not you can pull off trades to your advantage.

with the increasing volatility, additional opportunities will spring

up, but to take advantage of them will come down to your

understanding of divergence. 'timing' risk are very different from

'buy and hold' risk.

 

HH

[Realwealthuprising]

7 hours ago, Kman said:

What is your projection for gold over the next 20 years?

 

Hey @Kman

Whilst I can't say where gold will be in 20 years price wise we already know for sure were the global monetary system is heading and knowing this along with our monetary history gives us a good enough insight into what happens next and what we might try to do to protect ourselves.

Thats why many investors who are also students of monetary history were predicting this QE 5 and helicopter money all along.

When QE started after 2008 it was always going to be QE infinity because there was no way they would ever have been able to reverse that path.

But that is the unsound monetary system we live in, one that requires increasing amounts of debt be created. And in this environment where goverments are now been made to take on extreme levels of sovereign debt they will simply do what they always do in this situation and inflate it away, whilst also reaching into your investments and pensions to aid the process.

As such Gold could have any nominal price attached to it 10-20 years from now. Its value at that point, as in, what it will purchase, is an unknown however but lets expect it to at least remain as valuable in terms of purchasing power as it is today. Id wager its very likely at some point it will become much more sought after by the masses which could then make a supply shock where it would become overvalued. Remember when the inflation rate is very high financial repression will be used to trap people into their monetary systems and its then pm's are most valuable as they have always historically been an escape route.

Of course I doubt the metal holders will sell for currency even then, not unless you are wanting to trade it for another assets i.e. land or property. If not you would hold until the end of the monetary inflation and the start of whatever system replaces the current one. 

Thats not a future anyone wishes for but it seems to be the one we are going to get.

 

[KDave]

I think of gold as capital in hand its not meant to be an investment. It is meant to carry purchasing power through time, the price fluctuations are related to currency more than they are to gold. When gold was a fixed price decades ago, the price of goods moved in relation to gold - mostly falling value because productivity grew over time thanks to invention, new farming methods, the advent of oil (leverage on production).

Buying part of a company is an investment but the fluctuations of the stock price is related to currency as well as the underlying investment performance. When the currency supply increases and the price of stock goes up, is it because the company is doing well, or is it because the company are buying their own stock? More of the latter in recent years I think, but it doesn't matter so long as you know this and can see it, and take advantage of it. I am buying oil stocks to take advantage of the price movements and yield of the entire package driven mainly by currency supply affect on everything related to it, inflation, the utility of the commodity, the industrial economy that will need that commodity, etc. Gold and silver will also benefit from the same changes, so I am buying those as well. 

I have always bought stocks and gold as most people buy stocks and bonds. Personally I think bonds are too corrupted to be trusted as a means to carry purchasing power when gold is available, and stocks are the better investment. Investment banks and pensions and other organisations are mandated to hold a certain amount of bonds, which has given to the rise of negative yielding bonds and such like, and default is a possibility, as oppose to gold which is no ones liability. Don't take my word for it there is work on the stock/gold holding that demonstrates risk/return favour above that of stocks/bonds portfolio, I believe the optimal amount was 40/60 gold to stocks. 

[Roy]

18 minutes ago, KDave said:

I believe the optimal amount was 40/60 gold to stocks.

I should rebalance 😃

[KDave]

12 minutes ago, Roy said:

I should rebalance 😃

This is where i got the idea;

 

[Martlet]

Not a time to sell gold, but is a time to look at opportunities in stocks.  Another factor to consider in UK is the recent drop to sterling, a reverse would hold down the £/gold price. 

[Minimalist]

3 hours ago, Kman said:

All with the benefit of hindsight but that should be the goal shouldn't it? not just "i want to put all my savings into gold and hang on to it forever"

Its either that or risk your wealth in debt based assets. 

[Realwealthuprising]

https://www.imf.org/external/pubs/ft/wp/2015/wp1507.pdf

Some bedtime reading for anyone who is interested in what the central banks have in store for your money. This is why gold makes sense full stop.

[Kman]

9 minutes ago, Minimalist said:

Its either that or risk your wealth in debt based assets. 

How I'm thinking about it is what can you do with $10,000? not a lot in this day and age

If you can afford to lose it why not make some educated risks and try and sell on highs and buy whats low

That scenario i posted would have taken some balls and tolerance to risk but $10,000 - $175,000 in 15 years

I want $175,000 in 15 years, the $10,000 can't do anything for me and If I lose it nothing changes in my lifestyle or situation

 

 

 

 

[Minimalist]

6 minutes ago, Kman said:

How I'm thinking about it is what can you do with $10,000? not a lot in this day and age

If you can afford to lose it why not make some educated risks and try and sell on highs and buy whats low

That scenario i posted would have taken some balls and tolerance to risk but $10,000 - $175,000 in 15 years

I want $175,000 in 15 years, the $10,000 can't do anything for me and If I lose it nothing changes in my lifestyle or situation

Thats true and im in a similiar situation.

The educated risk indicates that almost all fiat is being pumped into paper assets while the standard of living in the UK is deteriorating. Educational risks must come from the whole perspective of every financial asset; CPI is flawed and not a true indicator of prices - Wages arent growing. The stockmarkets and house prices are pumped by debt. The middle class is reversing, in fact its not even controversial to state it could end in decades to come.

Its so bad that debt is the only instrument to build wealth if done correctly. Buy to lets and flips are also contributing to inflating the economy.

The only assets that can protect from it all is gold and silver.

And I keep repeating it on here, no money is going into manufacturing and mining creating a strong UK balance sheet. Instead the whole country is subjected to financial services displacing millions. No wonder Scottish people want Independence its a ****ing disgrace.

[Realwealthuprising]

27 minutes ago, Kman said:

How I'm thinking about it is what can you do with $10,000? not a lot in this day and age

If you can afford to lose it why not make some educated risks and try and sell on highs and buy whats low

That scenario i posted would have taken some balls and tolerance to risk but $10,000 - $175,000 in 15 years

I want $175,000 in 15 years, the $10,000 can't do anything for me and If I lose it nothing changes in my lifestyle or situation

 

 

 

 

If we are going into a high inflationary environment for the next 30 years you might well get your target but only in nominal terms. 

Going back to your gold/stocks scenario remember the last 30 years were characterised by deflation and lower and lower bond yields. If this reverses everything changes including the utility and returns on gold, especially that. So I totally agree with your scenario of trading into stocks over the past 30 years but dont extrapolate that scenario into the future just yet.

Prior to the 1980's inflation had been rising along with bond yields for over 20 years. And in that environment gold went up 25 x in a decade.

So we need to understand why inflation was so high, what triggered it?

It was because post world war 2 sovereign debts were at all times high and this mountain of debt had to be dealt with and so it was, by doing what governments always do when theres too much debt within a system, stealing it from you and I. They did this through debt defaults, currency devaluations, high inflation, and financial repression.

So look where we are today and ask yourself where we are and whats most likely next.

The current explosion of debt the world is creating will by the end of 2020 in inflation adjusted terms far surpass post ww2. My only belief is that it will be dealt the same manner as before, and that playbook is already written.

So I anticipate that means an inflationary shock, eventually, perhaps not right away, but soon, and I mean secular inflation...im talking decades of it and like post ww2. It also means financial repression. So your isa or anything else regulated by a financial authority will be low hanging fruit for governments to force on you their debt. And dont expect the yield to be anywhere close to reality, the would defeat the point. So stocks may make sense, but only if you understand and respond to the environment we are entering rather then the one we are leaving. For gold whats happening is about as bullish as you can get.

 

[Roy]

What? £10,000? 

TRAVEL!

[Roy]

8 minutes ago, Minimalist said:

Thats true and im in a similiar situation.

How old are you Sir?

[Minimalist]

7 minutes ago, Roy said:

What? £10,000? 

TRAVEL!

No, people want to be financially independent.

---

Added 0 minutes later...

Just now, Roy said:

How old are you Sir?

27

[Roy]

You're pulling my pisser?

[Minimalist]

4 minutes ago, Roy said:

You're pulling my pisser?

Nope

[Roy]

Omg..

At 27 all I wanted to do was f*ck everything, 'every which way but loose' 😃

The system is corrupt, we both know it. Please enjoy your youth.

You have made me sad. Is that attitude all around?

[KDave]

2 hours ago, Realwealthuprising said:

So I anticipate that means an inflationary shock, eventually, perhaps not right away, but soon, and I mean secular inflation...im talking decades of it and like post ww2. It also means financial repression. So your isa or anything else regulated by a financial authority will be low hanging fruit for governments to force on you their debt. And dont expect the yield to be anywhere close to reality, the would defeat the point. So stocks may make sense, but only if you understand and respond to the environment we are entering rather then the one we are leaving. For gold whats happening is about as bullish as you can get.

 

Yes this is what I am expecting from the work I followed; it will be decades of inflation over a few years, not decades of inflation. By 2025 inflation will be kicking back into historic norms still single digit, by 2028 inflation will be double digits and interest rates will be between 6 and 8% at the base rate, mortgages will be 10%.

The confiscations are done via the monetary system - ie inflation. Those holding anything non productive including housing might see a nominal fall of only a few percent, in houses I expect maybe 20% lower, but in real terms inflation adjusted it will be 50%. Perhaps there will be confiscation of assets but I doubt it, higher taxes on pensions maybe (no doubt taxes will rise for workers). In my view it more about preserving wealth over the coming decade than making it but those who do will be in a lot better position than those who don't see the real damage done to their wealth which will be via inflation. Many won't notice or realise until the damage is done, such is the nature of our monetary system. 

[Realwealthuprising]

28 minutes ago, KDave said:

Many won't notice or realise until the damage is done, such is the nature of our monetary system. 

Sadly, this is true. Savers will be screwed. I think there will be capital controls also. It might come in a hidden form...i.e No one can leave the country because there is a pandemic or some other lock down. Gold may be restricted too im not as sure as some who think it will be untouched. The aim of the game at the point of inflating debts away is to trap and force everyone in the country to remain in the financial system and not escape it. Or more specifically, not let their capital escape it... to think gold will be left open as an easy escape route feels naiive to me right now but I am just guessing for myself.

[Minimalist]

32 minutes ago, KDave said:

Perhaps there will be confiscation of assets but I doubt it

What makes you think that?

Look at my generation (millennials), we are synonymous with the Russian serfs; Most in my category believe in hardcore deficit spending. While a great deal of resentment is pointed at the Boomer generation. This and the new generation will accept confiscation of assets with open arms. That action and process is incremental in shaping the UN Agenda 21 programme. 

[MLNCoins]

2 hours ago, Roy said:

Omg..

At 27 all I wanted to do was f*ck everything, 'every which way but loose' 😃

The system is corrupt, we both know it. Please enjoy your youth.

You have made me sad. Is that attitude all around?

I'm 28 and can honestly say that its still very much the norm to go and experience life to fullest with people I know in my own small circle, travelling gives you a sense of intelligence that no books, schools, universities can ever teach you. All those who have done it, will know exactly what I'm talking about.

[Realwealthuprising]

 

 

[KDave]

42 minutes ago, Minimalist said:

What makes you think that?

Because there is no need to steal value when you can do it via the monetary system. Why take peoples bank savings when you can issue bonds, sell them to the central bank and then spend the new currency that everyone else is earning and saving.

[Minimalist]

4 minutes ago, KDave said:

Because there is no need to steal value when you can do it via the monetary system. Why take peoples bank savings when you can issue bonds, sell them to the central bank and then spend the new currency that everyone else is earning and saving.

Fair point, Dave

[KDave]

13 minutes ago, Minimalist said:

Fair point, Dave

Also as soon as you start to confiscate peoples assets you have destroyed the principle of property rights which will do far more long term economic damage than anything that would be gained from the theft. The strength of property rights is linked with general prosperity of a nation, poor nations have weak property rights, wealthy nations have strong property rights. Its not an obvious conclusion though and likely if the appropriate left wing party runs on the platform of confiscation many would go for it. 

49 minutes ago, nee4891 said:

I'm 28 and can honestly say that its still very much the norm to go and experience life to fullest with people I know in my own small circle, travelling gives you a sense of intelligence that no books, schools, universities can ever teach you. All those who have done it, will know exactly what I'm talking about.

I think this sense of intelligence is just life experience, something that comes with expose to life, travel is not the only way to achieve it though I travel a lot with work and can partly agree.

I think much of the need to travel comes from a spiritual and cultural starvation, the act of travel is akin to what our ancestors would have called pilgrimage. The act of travelling to far away places to find oneself over the past few decades is strangely similar to the idea of pilgrimage in my view, despite most of the people doing it identifying as atheist, living materialist lifestyles and reporting that they lack meaning in life, especially the younger generations. As a millennial myself I am still working it out.