Saw a snippet today that physically-backed gold EFTs are a major contributor to demand for gold, and that the UK is the 2nd biggest holder of these after the USA. Allegedly we own EFTs backed with 595 tons of real shiny gold!
So we are buying EFTs, back by physical gold as a hedge against inflation. The more we EFTs we buy, the more demand for gold to back them, and the price goes up. Neat trick that, but I can't help thinking it is a bit like hauling yourself up by your boot straps, and is ultimately doomed to fall again.
Cousin Jack wrote: ↑Tue Jun 11, 2024 10:49 am
Saw a snippet today that physically-backed gold EFTs are a major contributor to demand for gold, and that the UK is the 2nd biggest holder of these after the USA. Allegedly we own EFTs backed with 595 tons of real shiny gold!
So we are buying EFTs, back by physical gold as a hedge against inflation. The more we EFTs we buy, the more demand for gold to back them, and the price goes up. Neat trick that, but I can't help thinking it is a bit like hauling yourself up by your boot straps, and is ultimately doomed to fall again.
Not sure what the issue is. As far as I'm aware, and I'm no expert, EFTs must have the underlying asset, i.e. not like when the world's short-sellers lost their shirts on VW a few years back when it suddenly became clear that the number of VW shares that Porsche owned left nothign to cover the short contracts written, leading to a panic price surge.
If the price of gold suddenly collapses (which it won't, IMO. It's always been a safe haven and what's changed?), a number of investors get burned, but that's par for the course and has been happening since Ug sold his first flint to Moog back in pre-historic times.
Cousin Jack wrote: ↑Tue Jun 11, 2024 10:49 am
Saw a snippet today that physically-backed gold EFTs are a major contributor to demand for gold, and that the UK is the 2nd biggest holder of these after the USA. Allegedly we own EFTs backed with 595 tons of real shiny gold!
So we are buying EFTs, back by physical gold as a hedge against inflation. The more we EFTs we buy, the more demand for gold to back them, and the price goes up. Neat trick that, but I can't help thinking it is a bit like hauling yourself up by your boot straps, and is ultimately doomed to fall again.
Not sure what the issue is. As far as I'm aware, and I'm no expert, EFTs must have the underlying asset, i.e. not like when the world's short-sellers lost their shirts on VW a few years back when it suddenly became clear that the number of VW shares that Porsche owned left nothign to cover the short contracts written, leading to a panic price surge.
If the price of gold suddenly collapses (which it won't, IMO. It's always been a safe haven and what's changed?), a number of investors get burned, but that's par for the course and has been happening since Ug sold his first flint to Moog back in pre-historic times.
If gold price falls, (and it does happen) EFT price falls too. Traders bail out and invest in pork bellies instead. EFT prices fall further, less trade and EFT is then a net seller of gold, so gold prices fall still more.
Remember the Dot Com Bubble of 1999? Back then the top 30 stocks of the S&P made up 40% of the market. Today that figure is 53%, so a lot of top-heavy concentration and Nvidia seems to be the most bloated on AI hype, up from $40 a share in October to $135 at the moment.
gremlin wrote: ↑Wed Jun 19, 2024 4:02 pm
I'd be more nervous about Nvidia, et al.
Remember the Dot Com Bubble of 1999? Back then the top 30 stocks of the S&P made up 40% of the market. Today that figure is 53%, so a lot of top-heavy concentration and Nvidia seems to be the most bloated on AI hype, up from $40 a share in October to $135 at the moment.
Absolutely this ^^^
I was reading the nVidia stock price article today and it just screamed 'bubble'. If you're holding nVidia, get out and take your gains.
Last edited by mangocrazy on Wed Jun 19, 2024 4:27 pm, edited 1 time in total.
Well i actually bought them at 200 but they had a 10:1 stock split last week.
Still wondering when I should sell them.
Obviously the word Hype does a lot of lifting regarding Nvidia at the moment. On the other hand I tried to buy one of their GPUs recently (a professional £15k one, not a gaming one) and couldn't for love nor money...
Apparently it's currently 'worth' $47/share based on the usual fundamentals so there's quite a lot of froth in the current quoted price. That's not to say it won't go up given the usual herd instinct, tracker funds etc etc etc.
But. If I was 'in' I'd now be 'out'. Taking the profit TYVM and not worry about what I'd possibly missed out on. I definitely wouldn't be buying in.
Doubt is not a pleasant condition.
But certainty is an absurd one.
Voltaire
I would guess that's mostly down to a majority rather than any particular policy? I dunno. Just thinking that governments with big majorities can enact policy however they like, rather than everything being up in the air, and the markets like certainty above all else?
I agree that the prospect of stability is likely driving the pound to strengthen and the FTSE 100 to grow.
I’m pleased about the immediate improvement in the cost of government borrowing since the election result. If the government pays a lower interest rate on its debts, it has more money to put into public services and/or less pressure to increase taxes.
Sky News wrote:
Markets buoyed by Labour landslide after Tory turmoil
The big win by Sir Keir Starmer's party had been forecast and "priced in" by traders and investors, with expectations of a period of stability after years of volatility under the Conservatives. The pound has remained stable and the markets have reacted positively to Labour's landslide election victory.
Shares in leading companies on the UK stock exchange have risen, reflecting expectations among investors of a period of stability after years of market volatility under the Conservatives.
The top-flight FTSE 100 rose up to 0.4% in early trading after recording its best day in almost two months in the previous session. The domestically focussed FTSE 250 was up 1.7% at one point, hitting its highest level since April 2022.
The cost of UK state borrowing also dipped slightly as trading opened.
The rate the government has to pay to borrow money through the benchmark 10-year bond, initially fell 0.8 percentage points on Friday morning.
Ben Ritchie, head of developed market equities at ABRDN, said: "A landslide victory provides the sort of clarity and stability that equity markets need in an increasingly volatile world. If the new government get this right, businesses with significant exposure to the UK economy should be the likely winners."
I know I'm a bit of a grumpy sod at times, but I've always maintained that politicians like to be pictured at the helm of the ship in port, taking credit for safely steering good ship HMS U.K. through choppy waters during the crossing.
The truth is closer to the fact that they're hanging on to the wheel for dear God, lost at sea, completely at the mercy of any storm that batters the ship, having marginal impact of what actually happens.
