Forum Archive Index - November 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi LazyHaggis,
 
I'll start on a positive note, and even give you some free publicity.   I 
decided to revisit your website ( www.fairshare.co.nz ), and I see that 
you have some quite decent shares in your 'recommended' NZ 
portfolio.   Good stuff.    But now moving on to your continuing 
infatuation with gold....

>
> Gold continues its upward bound trend, and in a few months the $400
> breakout will be long gone and so will today's good buying (re-buying)
> entry points.
> 

I also follow an investment discussion group called 'aus.invest'.    
There is a character there by the name of 'The Wog'  who takes on the 
' gold bugs', much like I do here.    Now keep in mind I am about to 
quote a discussion on the merits of investing in gold from the 
perspective of the Australian market.  But substitute 'New Zealand' for 
'Australia' and the argument still makes sense.


quote:
--------------

>
> ALL currencies are losing value
>

Relative to what? The goods and services they can purchase? The 
JPY being  the obvious exception because it's in deflation. Relative to 
gold? Maybe, but if so it's very, very slowly. The AUD has been 
debased from about 400:oz Au before and after the 1980 boom to 
about 580:oz Au now. (If I pick the peak of the market, then even gold 
has been "debased" in AUD terms.) I can live with that.

Believe it or not, I don't hold currency just because I like the look of it,
and I have very little currency (or deposits directly convertible to
currency). I briefly hold currency because that allows me to pay my 
broker for assets that go up faster than the currency goes down. As 
long as my assets produce real growth, that outstrips the rate at which 
the currency is being "debased" and therefore that's been an eminently 
successful strategy for me. 

How do I know? Because I have the means now to buy more goods 
and services, petrol, nickel, real assets, or even gold (should I ever 
find the need to do so), than I have ever had before.

> 
> A USD will produce 0.80 USD in 12 months time - some proposition!
>

Actually a USD will produce 1.02 USD in 12 months time assuming it is 
put into a 12 month deposit. That may well be worth considerably less 
in some other currency (such as the AUD), and if that happens then I 
don't care. You see, this is aus.invest - not usd.invest

Nothing personal but I'm killfiling you now to save bandwidth because I 
have no interest in the only topic you're capable of discussing - gold / 
USD cross rate. (And it IS a "cross rate" rather than a price, at least 
around here.)

Wog

 -----------------


Couldn't have put it better myself, so made no attempt to change it.

SNOOPY



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