Err, there's plenty of mining stocks that pay dividends. As demand for metals grows as fiat money fails and the markets become harder to manipulate with paper (due to the demand fundamentals becoming so strong) then these dividends will grow.
'European banks gorged themselves on a second helping of cheap European Central Bank loans as the ECB moved with alacrity once again to avert a banking liquidity squeeze and take the edge off the sovereign debt crisis. On Wednesday morning, the ECB lent €529-billion ($712-billion U.S.) of 1-per-cent money to 800 banks, which was slightly above the consensus figure but well below one or two predictions that as much as €1-trillion would be soaked up. In the last auction, in December, the ECB loaned €489-billion to 523 banks. The loans, known as the long-term refinancing operation (LTRO), were introduced by then-new ECB president Mario Draghi late last year as the bank’s prime effort to prevent a Lehman Bros.-style banking collapse on home ground. While the ECB had hosed out cheap loans in the past, under Mr. Draghi’s predecessor, Jean-Claude Trichet, they were short-term loans. The new loans have been for an unprecedented three years.' http://www.theglobeandmail.com/repo...-billion-us-in-loans-to-banks/article2353680/ Oh looky....more money 'printing'.
Someone correct me , but isn't a 1000 billion known as the short trillion , as opposed to a million billion being a long trillion .Regardless , it is a huge sum -- $1000 billion . I cannot do it in my head , but isn't it theoretically possible that Banks are simply using most or even all of the money to exchange current agreed debts into essentially the same ones but with smaller interest rates . Example : Bank X has $50 billion debt with average interest per year at 3 .75% . Changed to $50 billion at 1.95% , say . The difference is substantial and makes a large difference on the balance sheet in terms of capitalisation . Alternatively , the Bank is requested to buy Sovereign debt where it will earn more money by buying more Sovereign debt than it would otherwise -- assuming that State doesn't default . OR the money is going straight into capitalisation to make up for falling asset values and money that has been lost due to the Greece default and will be in the imminent Irish and Portuguese defaults . If I have got it right , then the situation is chaos and mayhem -- with Peter robbing Paul to pay Philip and the base lender doing so from more imaginary or " created" or "printed" money . A further delaying tactic which ultimately worsens matters because the size of the final Tsunami is that much higher . Right or wrong?
Gold doesn't pay dividends, mining companies (and other types) pay dividends. Owning Gold as a pure commodity doesn't produce cashflows so it can't produce dividends.
Here is an interesting take on the gold/silver sell off today: 'Market Recap: Ben Bernanke’s speech had almost nothing to do with today’s sell-off in precious metals. It was based almost entirely on the second round of ECB loans, given to approximately 800 banks in Europe. The ECB loaned over $700 million worth of Euros to these banks. These banks immediately proceeding to lock in the favorable interest rates by selling sovereign bonds (including U.S. Treasury bonds), and the selling didn’t stop there. The mass movement of these banks transferring these Euros caused a massive sell-off in the Euro and other Dollar-denominated assets, especially commodities. These banks don’t want Euros on their balance sheets; they want dollars instead. Why do we say this? Because this is exactly what happened in December, the first time the ECB offered these loans (489 billion Euros worth). Gold sold off for four days in the aftermath. This has nothing to do with U.S. domestic policy, although we are sure Bernanke is happy to print dollars while demand is high. In the end, there may still be a QE3, but even as we speak, dollars are being printed in Europe. In conclusion, the ECB is giving Euros away. Why would anyone want them? Especially, a trader whose bonus depreciates with every additional Euro lent.' http://www.fmxconnect.com/fmxmetals...-Options-Report-ndash3b-February-29-2012.aspx I do not know if it is true or not, but it is interesting, IMO.
Gold closed out the week at $1772.42/oz.. That's down $60.67 (or about 3.5%) for the week. http://www.goldprice.org/gold-price-history.html
the problem is that since 2001 governments around the world are debasing their currency so quickly that gold is by far the best place to be.......now once the money printing stops then yes its time to own paper again......but not before!
look at that chart carefully......since 2001 gold has more than quadrupled while the wilshire 5,000 is only up less then 50%.....this is truly the decade for gold!
Gold has had a great run. I think throwing all your money in it now when its nearing its peak would be silly. I think it's useful at this point for hedging purposes though.
'Citigroup Predict Gold at $2,400/oz in 2012 and $3,400/oz "In Coming Years"' http://www.fxstreet.com/fundamental/analysis-reports/gold-investments-market-update/2012/03/05/
You are missing the point. Traditionally, major financial conglomerates are not big on gold (at least in my experience). The fact that even these guys are on the bandwagon should speak volumes. And which economists that DID accurately predict the housing crash are saying that gold is near it's peak (as you say)? I can name several that predicted the housing crash and are big on gold's future - Peter Schiff, Jim Rogers, Marc Faber just to name a few. Do you or do you not agree that gold/silver are motivated by monetary instability and inflationary concerns?
I agree that gold/silver prices are motivated by monetary instability/inflation AND market fears. I could easily find financial institutions/experts that don't have good long-term projections for Gold (Warren Buffet as I cited earlier). I think we all know that financial predictions are anything but set in stone. I think intelligent investors can certainly make some money in the short term on gold investments in the next year or so. My concerns are those that are flocking to Gold BECAUSE of its incredible performance over the last 10 years. These are long-term investors that are expecting the next decade to be the same. I hate the idea of buying into something that's been going up so much for so long...especially a commodity. Have you ever read about Tulips in the 17th century? I also see all these ridiculous commercials on the internet/tv promoting gold investments. I constantly hear about complete novice investors mention buying Gold. I know of several people that sunk pretty much all of their savings into Gold in the last few years because "Gold still has value." This really makes me believe Gold has become somewhat of a bubble. If the world economy picks up Gold could fall back down to earth. I mentioned the financial crisis because the majority of economists/financial experts didn't see it coming (or at least how severe it was). There were a minority that did, but this hardly makes them gods...these people have missed other things before. Financial predictions are hardly noted for being accurate.
Berkshire Hathaway (Warren Buffett's company) has apparently NEVER invested in gold. It also (apparently) has returned about 105% over the last 10 years...pretty good. (now I heard this today - I am not positive whether these numbers are true) But gold has returned about 474% over that time...who was wiser (if the numbers are true)? http://www.goldprice.org/gold-price-history.html I know of no one remotely reputable that is saying to invest in gold/silver for ten years - I certainly am not. I am simply saying that gold/silver should continue to be a good investment so long as interest rates remain artificially low...no matter how long or short a time frame that is. So why not just invest in gold/silver until the Fed starts raising rates? Sounds simple to me. That is what I am doing. Once again - I am NO expert.
Again, your taking essentially the best 10 years of Gold investment's life and comparing it to one of the worst for the stock market. I bet those numbers look MUCH better for Berkshire if you go back 30 years. Warren Buffet is warning investors about Gold NOW.....not 10 years ago. There's no question it's performed well in the last 10 years. The question here is the future. While Gold/Silver can be a good safe bet, and probably profitable in the short term, I think stocks are still the better option. With Greek fears and some hesitancy left from 2009, I think now is a great time to poor money into the market for the long run. There's nothing wrong with throwing some of your portfolio into gold/silver/mining companies, but I wouldn't put all my eggs in that basket. There are a lot of companies sitting on a lot of cash that can be a lot of investment/growth or dividends.
But the gold/silver fundamentals were not in play before 11 years ago. This is the great thing about precious metals (and also commodities to a point) - the motivating factors of them are external...not hidden behind the closed doors of a board of directors. When too many governments 'print' too much money and/or lower interest rates too much then inflationary fears and monetary concerns will rise. And when they do - gold/silver will almost certainly go up. And when these governments/central banks curtail spending OR lower interest rates (probably the latter the biggest single factor) - gold/silver will almost certainly go down. It's not rocket science. The only real problem I have with what you are saying is that the gold/silver 'bull' market is almost over. And I say that it will not end until massive government spending and artificially low interest rates (especially the latter - imo) come to an end. And there are NO significant signs that this is going to happen any time soon. Indeed - the Fed just re-iterated last week it's intention to keep rates 'artificially' low until at LEAST 2014. If Bernanke stays the course with that - then I feel that the gold/silver 'bull' market will last until at LEAST 2014 (with ups and downs - of course). PLUS, as long as the above is the case, that gold/silver will out perform the S&P 500 in that time...significantly. Just as it has over the last 11 years. Once again though - I am NO expert.
Buffetts Gold Dis Baffles Goolgasian 'Warren Buffett is a great investor, says Christopher Goolgasian, a portfolio manager at State Street Global Advisors Inc. who helps oversee a $74 billion gold fund. The Oracle of Omaha just has it wrong when it comes to the metal. While he wont own gold, he also never owned Apple (up around 1,500% since January of 2000) or Google (up 530% since August of 2004), Goolgasian said of Buffett in a March 2 regulatory filing for SPDR Gold Trust, an exchange-traded fund managed by Boston-based State Street Corp. (STT) In the filing, Goolgasian wrote that while Buffetts Berkshire Hathaway Inc (BRK\A). has risen 105 percent since January of 2000, gold has climbed nearly fivefold during the same period. Buffett, in his annual letter to shareholders last month, said investors should avoid gold because its uses are limited and it doesnt have the potential of farmland or companies to produce new wealth. Achieving a long-term gain on the metal requires an expanding pool of buyers who believe the group will increase further, he said.' http://www.bloomberg.com/news/2012-...ld-bug-baffles-state-street-s-goolgasian.html
Everything you say is true, I don't dispute it. However, I question how much market demand has overinflated the price. That's the issue that I don't think anyone really knows. The spike last week showed how sensitive gold prices can be. Gold has grown A LOT recently, how much longer can it continue to go up? Also, how much can you count on two pretty serious recessions to help out with your Gold investments in the future? Historically, the S&P 500 outperforms Gold...by a lot. Taking this short-term look golden age of Gold doesn't predict the future.
Well...imo...you make more sense then most people not big on gold. We shall see. But, for the record, the minute Bernanke says 'it's time to combat inflation by raising rates'..I will sell EVERY PIECE OF SILVER AND GOLD I OWN...FAST. And...once again...I am NO expert.
nearing its peak? While Bernacke still keeps debasing the currency at an alarming rate? Are you sure you understand economics?
and citigroup also is not predicting the currency crisis that is looming in the next year or two,,,,,,,,what do you think will happen when the central banks around the world loose confidence in the USD or when the bond vigilanties start panicking and dumping treasuries? Its only a matter of time. If you can guarantee me that very soon congress will get its act together and make a sizeable cut to the budget then you might have a point.....but I see trillion +++ deficits for years to come..........and this is why gold is nowhere near the top. Its people like you ( the clueless gang) that always lose in the long run.....all you look at is price.......you need to look deeper!
the reason why financials hate gold is because there is no money to be made on the sale of gold.....unlike stocks and bonds where there are analysts, brokers, and a host of other underwriters that make a killing selling and advising paper assets!
only a fool buys ( or sells) any investment strictly based on price. So why do I like gold? Because of bernacke's money printing.......because of the european central bank not getting its act together....and because of the trillion ++++ US budget defict......now......if you can guarantee me that those three problems get fixed then I would be first in line to sell my gold!
if the US government did not bail out the banks in 2008 Berkshire Hathaway would be bankrupt now.....his company of Mutual of Omaha was very close to going bankrupt in 2008!
warren buffet is not as great as you think......in 2008 he bought shares in goldman sachs before the crisis hit.....and later purchesed shares in B of A he is just well connected......dont kid yourself!
