Member Info for Major4legs

Recent events and FACTs don’t support the gold bug conspiracy - following Israeli attacks the market responded according to conventional theory- oil up 7% and both USD and gold up over 1% as free capital sought traditional safe havens. Both theories correctly predicted gold price increase caused by geopolitical volatility but gold bug theory was proved wrong by obvious move to usd despite high debt levels

Https://www.ft.com/content/5788dbac-7680-11e0-b05b-00144feabdc0

Always a good idea to base your opinion on facts not bias

The old Gordon brown sold the gold trope! Yes at current inflated prices it might have cost us £30 billion but that ignores what he did with the £3.5 billion- if it was invested in infrastructure the multiplier would have created much more than £30billion over 20 years. It also pales into insignificance when compared to austerity which cost 200,000 excess deaths and hundreds of billions in lost growth

It’s not as simple as you make out. Japan has highest debt levels in G7 - 237% and Germany the lowest - 60% yet average growth over the last 5 years is broadly the same 1.12 and 1.16 equally sluggish- it’s not QE or debt that is the problem.

Ah the old Austrian economists argument. God help us. We only have to look at the damage their ideologically driven acolytes have done to this country to see the shortcomings of their theories that have no basis in data or fact. QE worked. It kept the lights on after the Austrian school of deregulation and free market anarchy came close to wiping out liberal democracies as banks were allowed to take huge risks chasing profits. If you think QE will bring about your gold bug theocracy you have to explain Japan.

Gold bugs must have a fundamental misunderstanding of capitalism - of course a FIAT currency is going to depreciate in a functioning capitalist model - inflation/growth will do that! If the system works assets will outperform currencies and increase in value when measured in currency! That doesn't mean that the asset will become the fixed value against which currencies are measured - we tried that! It didnt work and was abandoned 50 years ago. Equities have proved to be a better investment than gold when averaged over the long term and in specific cases like now the case for buying MTL over physical gold is a overwhelming. That could change - global recession, WW3 another pandemic or some other dystopian horror! Or we could all be totally f****ked if Trump believes gold bug nonsense and revalues US gold reserves from $44 p/oz to market prices and sells the lot flooding the market with gold and crashing the price!

Unfortunately golds status as a safe haven will se it rise in volatile times. My point - as always - is to refute gold bugs assertions that the rise is because of the collapse of FIAT currencies. Gold is generally a reliable store of wealth and hedge against inflation, but timing is important. Buying physical gold now might not be wise. i downloaded a dataset of the POG at the start of every month since 1971 and then ran a script to calculate the probability of the POG rising after 3 months, 12 months, 5 and 10 years. For 3 months the probability was only 29% - it did go up to 60% over 10 years but it doesnt support gold bugs conspiracy that gold is ALWAYS a reliable store of wealth. Much better to invest in MTL where you leverage on any gold rise is multiples and even if gold falls you will still get an impressive return.

Unfortunately gold is rising off the back of a fear of war in the Middle East - Oil is up 5%. MTL has been rising despite gold going sideways for 2 months. Let’s hope for peace and no rise in gold. This share doesn’t need it.

I cant see how a chartist approach that relies on macro statistical and technical analysis can work on a small cap share - it might be useful in a broad sense in conjunction with specific knowledge to gauge the best timing on investing in a share thats moving from exploration to production, but without the statistical averaging of a larger index or sector smoothing out the anomalies and emotional trades in a single share technical analysis can't be accurate. Lots going on here with options and Drachs and Mellon etc. Good luck to anyone trading this share!!!!

Drachs doesn’t have a history of taking companies private - wouldn’t Candy be able to stop this - he has 24%

Look at the volume- has to be to do with Bowdens options. Some transparency on this would be good - this is one of the reasons institutional investors steer clear of small caps with insider ownership - positive to see management with skin in the game but it would be better to issue an RNS to explain

France is over 100% for a decade not as bad as Japan!

Really? US crossed over 100% debt to GDP in 2012, Japan has had over 200% for 30 years and France for a decade! Not sure the UKs crossing last year is significant

Except they don’t earn any income and there are a lot of occasions over the last 50 years when you would have lost money over a 2 year period. If you bought at the wrong time in the 1980s it would have taken you almost 20 years to make money. Doesn’t sound like the ultimate saving vehicle to me. Historically and empirically that would be equities.

Thats very true -I was comparing gold to average long term return on ALL equities - which is about 7%. Depends on your risk profile. You could choose a Small Cap Mining fund like GDXJ or SGDJ to reduce you risk - its still a much better bet than a gold etf at these prices.

Unfortunately its not at all obvious where anything is heading at the moment. MTLs fundamentals are strong and like most small cap miner looks undervalued that should change over the next 2 years, Silver like wise looks cheap compared to gold and the potential industrial demand for it but gold doesn't look cheap at these prices. Its long term average return is worse than equities if dividends are included and significant growth from here requires dystopian level economic collapse. If you think that will happen you should be buying a bunker in New Zealand not hoarding gold! Why buy physical gold anyway? If you really believe gold will double in price than your leverage in small cap miners with strong fundamentals will be multiples of any rise in the price of gold and if the consensus proves right and the gold bugs are are wrong again then you can console your self with a massive return in MTL based on a gold price of $3k. Why ramp Gold ETFs when you can provide rational reasons to invest in MTL.

Pre Bretton Woods the gold price was fixed at $35 so I didn’t forget to include it I just ignored it! Do you honestly believe central banks will replace $34 trillion of US treasuries with gold when the total value of all above ground gold is $15 trillion! Why do you think the gold standard was abandoned in the first place! Honestly come on!

In September 1980 gold was $711 and 19 years later it was $252 in July1999. It’s just not true to say gold is a 1 way bet. Yes the long term average is a great investment if you time it right but gold will not replace FIAT money- it IS just maths! Debt to GDP was only 30% in 1980 and today it’s 122% that’s a 4 fold increase so debt proportionally has increased less than gold! If the USD crashes, unlikely but possible, the banks will buy bonds in other currencies or create a new Fiat currency system because gold as an illiquid physical asset couldn’t support the scale of the global economy- it IS just maths. Thats why the gold standard was abandoned.

There is of course a broad correlation between the gold price and US debt but it’s not as simple as that. Debt of itself is not really a problem, especially for the US. A growing US economy could manage much larger levels of debt to GDP - the problem is it isn’t growing!. If the tariffs are reversed we might get growth, rising debt and rising interest rates which would probably subdue gold like it did between 1980 and 1999 when gold lost 75% of its value despite rising debt. Not suggesting we will see that now given the global volatility but there is a scenario where gold loses 10 or 20% despite rising US debt. I think its impossible to predict.

Silver on the other hand looks undervalued compared to gold - which is why I have a bit in an ETC! Silver is not a central bank hedge and is driven by industrial demand and retail interest so I welcome it’s apparent break out