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[frogkid] 05/5/2021 17:43

I may do Platty, I am pondering my next move. Looking for indicators and all I see is chaff! By the way. I closed out of GDP. Not sure whats happening there. Soz for O/T.

[frogkid] 05/5/2021 17:41

Hi LLB, the bars at the bottom of the pond. Nice to see you too my friend.

[laurence llewelyn binliner] 05/5/2021 17:40

#Froggie, good to see you again, hows the Lilly pad..? still afloat with all those gold bars on it.. :o)

[plat hunter] 05/5/2021 17:33

Fair enough, you'll get a taste for it by then I reckon.

[frogkid] 05/5/2021 16:26

My only issue is geographical/political but I only got a couple of grands worth and I reckon to be in and out by summer ! Frog

[plat hunter] 05/5/2021 14:02

Welcome aboard froggy, crazy crazy valuation imo

[frogkid] 05/5/2021 13:43

@PH,In for a few here, gold could go on a runATBFrog

[dickbush] 05/5/2021 12:19

Don't trust the trade data. I bought some at 20.75p. It's marked as a sale.

[timbo] 05/5/2021 08:41

Also available on Audible (all 9 hours worth) so you can listen while you work...

[golden prospect] 05/5/2021 08:10

News out on Cora, in due course of much interest

[johnhemming] 05/5/2021 06:34

Thanks for that. I will read "when money dies" (I have just bought a copy). I think it is worth knowing what happened last time this sort of thing was tried.

What I understand from previously is that basically if you keep printing money once inflation kicks off it becomes a big problem. (mainly for poorer people who cannot shift between their domestic currency and other assets and whose income is often fixed).

[bishan bedi] 04/5/2021 21:26

Sorry I mixed my books. I meant 'when money dies' by Adam Ferguson. In a similar vein it seems, albeit written a century apart.

'The death of money' is a different kettle of fish.

[johnhemming] 04/5/2021 20:56

The book I read was "Dying of Money"

[bishan bedi] 04/5/2021 20:42

John Hemming - if you mean 'the death of money' then I agree an excellent book. Somewhere in there it talks about the relative value of gold after inflation taking off, but the fact that it went up ninefold prior to the hyperinflation without anyone noticing.

[plat hunter] 04/5/2021 19:04

CPI and RPI are a tools to white wash the poor. Excluding rent inflation makes millions invisible.The US is even worse, they exclude food and fuel.

[laurence llewelyn binliner] 04/5/2021 17:46

#Lowtrawler, absolutely agree, if inflation digs in, which it is about to, then there will be a lot of fallout, so many people have leveraged up in a low interest rate environment, and the amount of borrowers who can not make it to month end with more than £10/20 disposable is frightening.., rates only need to go up 1% to get a lot of mortgage borrowers into trouble, and March just set a record for home lending, then there are the car lease plans, the sofa is on HP, the TVs, phones, laptops, tablets, the norm seems to be a highly leveraged lifestyle..

Real inflation right now is 8/10%, forget RPI/CPI data, look at your weekly shopping trolley, a tank of fuel, utilities, train tickets, council tax is up 5% for 2021, my favourite cake on the market went up 25% last week, the baker citing flour has gone through the roof.. :o)

Base rates will need to go up to stamp on it, but how soon..?

Gold is not going to go out of fashion, but will be impacted when rates go up, but we will need to see RPI/CPI data evidence of 2-3% first, and that will come sooner than many expect..

[johnhemming] 04/5/2021 16:51

No one really knows what is going to happen now. There is an interesting book "Dying of Money" that I read recently which talked about Weimar. What the books said was the Germans originally got away with creating more money, but then became effectively hooked on it.

Inflation tends to be a problem for the poorer members of society.

[lowtrawler] 04/5/2021 16:37

Interesting article here:



This is before Biden's intended $6trn expansion targeting more jobs - quote from that article: "the Fed’s new monetary regime takes us back to the 1960s and, possibly, to the 1970s. Then as today, policymakers put a high priority on achieving full employment relative to price stability". This is largely what led to high inflation in the 1970's and Biden is almost exactly mirroring those error's with his current intentions, supported by the Fed. If his expansion is approved, it will feed in on top of the existing QE.....double trouble.

[plat hunter] 04/5/2021 16:31

Agree Low, from these historic levels it's the multi-bagger that no one wants

[lowtrawler] 04/5/2021 16:09

It's not been unusual recently for banks to lend 4.5x salary which even at 3% rates, pushes affordability - consider someone on £30k with a £135k mortgage. After tax, NIC and pension, they take home about £21k and at 3% will currently be paying £4k interest on the mortgage. If interest rates rise to 10%, their interest payments will go up to £13.5k. At the same time, their council tax, utilities, food and other costs will also rise by 10%.

People forget the damage caused by inflation because you have to go back to the early 90's for anything approaching high inflation. I suspect we are entering a period where inflation will return and probably at 1970's levels.

[lowtrawler] 04/5/2021 15:49

Plat, mortgage rates tend to align fairly closely to inflation. Recently, people have been used to 2% - 4% deals. If inflation rises to double figures, mortgage rates are likely to also hit 10% or more. For those used to 2%, that's 5x their current payments. This is what causes the vicious circle. People need pay increases to keep the roof over their head. Companies need to pass those pay increases on.....

Gold is one of the few reliable hedges against inflation and so if inflation takes off, Gold will soar.

[plat hunter] 04/5/2021 15:25

Lowtrawler... The mortgages are a very salient point.Peeps on a 90% interest only mortgage on an SVR of 50 basis point over boe could very well suffer the real effects of hyper inflation.1% to 2% is not just a 1% increase in rates, it equals a 100% increase in interest payments

[lowtrawler] 04/5/2021 15:16

You have to laugh at both "transitory" and "hyper-inflation". The typical definition of hyper-inflation is prices rising at more than 50% per month. If that were to happen, it wouldn't be transitory.

I'm old enough to remember 27% UK inflation in the 1970's. Different circumstances but government's cannot control inflation from happening. The volume of QE is bound to feed into higher prices and businesses recovering from coronavirus are not going to absorb the price pressures. It tends to lead into a vicious circle of wage increases and further raw material increases. Any round of inflation will last over 2 years and could easily reach double figures. How many UK homeowners will be ready for 10% mortgage rates?

[johnhemming] 04/5/2021 14:08

We have the double bottom on gold which has to be seen as having some significance. The mood music about inflation is also an issue. BoA have referred to a thing
"transitory hyper-inflation" that I don't think is a thing.

[dickbush] 04/5/2021 13:02

Thanks, John. I'm a big fan, not least because they always emphasise their mistakes rather than hiding them. Most investment managers do the reverse.

I note that the gold price had a second run at $1,800 yesterday against a weak Dollar. Today's Dollar rally has led to a pull back, but gold's 3-month picture still looks positive to me.