Gold's 2012 Performance vs. 158 Currencies

Gold’s 2012 Performance vs 158 Currencies

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Who are we?

I come in different names, shapes and colours.

People use me as a medium of exchange.

Each year I seem to buy less and less things.

You may recognise some of my names: dollar, pounds, kroner, peso, yen, euro.

Last year for the 12th consecutive year, nearly all of us lost purchasing power to a former acquaintance, gold.

We are:

Fiat currencies
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- All but a few of the 158 currencies listed below lost value to gold in 2012





It is clear from these numbers that governments worldwide continue to use inflation (money expansion) as a means to destroy your every day purchasing power.

"Inflation and credit expansion, the preferred methods of present day government openhandedness, do not add anything to the amount of resources available. They make some people more prosperous, but only to the extent that they make others poorer." - Ludwig von Mises -

Cheers
Scott

Re: Gold’s 2012 Performance vs 158 Currencies

sreeve said:

Gold’s 2012 Performance vs 158 Currencies


Cheers
Scott

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Agree mate, but it's a hole in the garden investment standalone.

If you are talking about leverage/derivatives/arb then it is different.

Useless to compare it to currencies unless playing the above.

gg

Re: Gold’s 2012 Performance vs 158 Currencies

Garpal Gumnut said:

Agree mate, but it's a hole in the garden investment standalone.

If you are talking about leverage/derivatives/arb then it is different.

Useless to compare it to currencies unless playing the above.

gg

Click to expand...

Without getting into a long debate about this. I'm not so much interested in the price of gold but its purchasing power relative to other goods and investments. Yes there are periods of time where gold and silver are not ideal investments and the debt binge is in vogue. But there are also cyclical terms where phyiscal gold saved for a rainy day is ideal.

Gold has been in a solid purchasing power trend vs the sharemarket since 1999 and since Australian property in 2004. These were early signals that massive malinvestment was occurring in the domestic and global economies.

The current worldwide debt situation will not go away through central banks cranking 10s of trillions through the printing press. With aging demographics and banks gambling 100s trillions on derivatives, the subprime meltdown is just an entrée to what lies ahead.This will have significant implications for compulsory Superannuation, the sharemarket and the property market in particular - markets which heavily rely on the debt cycle. With household debt doubling in the last decade to over 160%, there isn't much breathing room for year in year out for investors to bet everything on the debt cycle to continue.

Re: Gold’s 2012 Performance vs 158 Currencies

sreeve said:

It is clear from these numbers that governments worldwide continue to use inflation (money expansion) as a means to destroy your every day purchasing power.

Scott

Click to expand...

So what! In the last 12 Months CBA shares have increased 28% + the 7% in fully franked dividends.

TLS shares have increased 32% + 8% fully franked dividends.

I'll keep investing in good stocks that pay good dividends anytime. I do not own 1 ounce of gold and I am doing ok but hey if you want to keep a kilo or 2 under your bed then that's up to you but to me it would be of no use, no dividends, no rent, no interest and with only hope of the price appreciating it isn't my kind of investing.

Re: Gold’s 2012 Performance vs 158 Currencies

Bill M said:

So what! In the last 12 Months CBA shares have increased 28% + the 7% in fully franked dividends.

TLS shares have increased 32% + 8% fully franked dividends.

I'll keep investing in good stocks that pay good dividends anytime. I do not own 1 ounce of gold and I am doing ok but hey if you want to keep a kilo or 2 under your bed then that's up to you but to me it would be of no use, no dividends, no rent, no interest and with only hope of the price appreciating it isn't my kind of investing.

Click to expand...

If you believe in compulsory superannuation, where the rules will forever be tinkered with by Governments, then go for it. I don't trust these politicians. The next 20 years won't replicate the last 20 years. The debt cycle will not foreever raise the prices of stocks and property so every baby boomer on the planet can retire comfortably.

Enjoy riding CBA while you can. The big 4 banks in Australia will be the short of the century soon. Oh, then we will be having that "too big to fail" and we must "guarantee everyone's deposits" arguments.

There is so far an extra US$11 trillion + of new dollars printed into the world economy in the last 5 years, about 1/5 of the world economy. Meanwhile there is less gold mined today than a decade ago. How many more trillions have to be printed to create a new artificial sharemarket boom? The debt cycle is over. Many have realised this.

Re: Gold’s 2012 Performance vs 158 Currencies

sreeve said:

If you believe in compulsory superannuation, where the rules will forever be tinkered with by Governments, then go for it. I don't trust these politicians. The next 20 years won't replicate the last 20 years. The debt cycle will not foreever raise the prices of stocks and property so every baby boomer on the planet can retire comfortably.

Enjoy riding CBA while you can. The big 4 banks in Australia will be the short of the century soon. Oh, then we will be having that "too big to fail" and we must "guarantee everyone's deposits" arguments.

There is so far an extra US$11 trillion + of new dollars printed into the world economy in the last 5 years, about 1/5 of the world economy. Meanwhile there is less gold mined today than a decade ago. How many more trillions have to be printed to create a new artificial sharemarket boom? The debt cycle is over. Many have realised this.

Click to expand...

I (and many others) completely agree with your sentiments. Many of these points in their different forms have been raised in other threads here. The problem is the tinkering probably extends to the price of gold.

As to question of the debt cycle, it might get pushed along for a while still. It's in the best interests of many. Like with anything it's a matter of timing. If you have gold sitting around, it is doing nothing. At the same time if the cycle comes to an abrupt end, shares etc will lose a lot of value. Timing is everything.

Lastly they can tinker the perception gold as a store of value. e.g look at western perception of gold vs eastern perception.

I only looked at the NZ Dollar - it claims an 8.6% gain, but by my calculations it's 0.01%