Precious Metals | wealthymatters

Canara Robeco’s Take On Gold

June 5, 2012 10 Comments

Below is an article from today’s ET.The author has failed to convince me that buying and holding physical gold at current prices is likely to be a good idea in the long term.After all paper currency systems must collapse sometime and gold tends to be around forever.But buying paper gold,especially as part of a blended mutual fund such as a combo of equities,gold and debt might have something going for it.Read the article below and decide for yourself:-

Gold to scale new peaks in coming years: Ritesh Jain, Head of Investments Canara Robeco Asset Management.

It’s a lump of metal with no cash flows and earnings power. The buyer even foregoes gradual accumulation of intrinsic value as it is industrially useless. But just imagine the second-largest economy in the world frantically buying this metal. Read more of this post

Filed under Paper Assets, Precious Metals Tagged with austerity, blended mutual fund, Canara Robeco Asset Management, Gold, gold bull, gold bull run, Gold Investment, Inflation, old bull market, paper gold, postaday, Ritesh Jain, Rydex Precious Metals Fund.

It’s Impossible Not To Be A Millionaire

June 4, 2012 7 Comments

In this post I will tell you the strange story of Curt Degerman.His story will show you how it is impossible not to become a millionaire.

Curt lived in the Swedish coastal town of Skellefteå.He was born in 1948.As a child he was very clever and had a bright future but dropped out of school in his late teens after a personal crisis.He never completed school, married, nor had a family of his own.He chose to live an alternative way of life and largely kept to himself.

Curt Degerman was called “Burk-Curt” (‘Tin-Can Curt’) by the residents of Skellefteå.For forty years Curt was a solitary figure seen cycling around the town in his blue anorak and ragged trousers.He spent his days touring the recycling bins of the town on his old bicycle and rummaging through them, collecting bottles and cans .Curt transported the bottles and cans he found by stuffing them into bags tied between the handlebars of his bicycle.He sold the tins and bottles to shopkeepers and a recycling plant. Read more of this post

Filed under Paper Assets, Precious Metals, Theory, Tool Kit Tagged with bank savings, Curt Degerman, Dagens Industri, estate, gold bars, income from recycling, kronor, Millionaire, Mutual Funds, postaday, recycling, Skellefteå

The Wisdom Of Our Ancestors

April 7, 2012 3 Comments

wealthymatters.com Here is an excerpt from an interesting from the interesting article here:http://tsr.net.co/2011/07/sone-ki-chidiya-india/911

India is one of the largest importers of gold in the world. As per World Gold Council, a total of 158,000 tonnes of gold have been mined till date. Out of this Indians’ private holdings is considered to be the highest at 15,000 tonnes. American citizens’ holdings is a mere 4000 tonnes.

The estimates of private holdings with Indian citizens vary from 15,000 tonnes to 25,000 tonnes. Even accepting the lower estimate of 15,000 tonnes at current prices of approx US $ 1500 per ounce, the valuation of the Indian private holdings is equal to US $ 725 billion.

India’s GDP is around 1.5 Trillion US $. If our economy has a growth rate of 8 %, the GDP increases by US $ 120 billion. In the last one year, gold has appreciated from approx 1250 $ per ounce to 1500 $, an appreciation of over 20 %. In view of the rupee getting stronger against US $, the appreciation in rupee terms is lower at about 15%. If the above rate is applied to the Indian household holdings of gold, the value of Indians gold holdings has gone up in the last one year by about US $ 90 billion. Read more of this post

Filed under Precious Metals, Tidbits Tagged with Gold, Gold Investment, India's private gold holdings, postaday, valuation gains, wealth effect

Gold To Preserve Wealth

April 5, 2012 1 Comment

Gold is generally believed to be a hedge against inflation.However there has been a spate of articles disputing this belief.I found this nice article here that analysis the relevant data for India http://sachasingh.blogspot.in/2010/01/is-gold-good-hedge.html . The graphs and table below are extracts from this post.

The graph below shows the movement in WPI and average prices of 10 gms gold in Mumbai from 1970-71 to 2008-09.

Eloquent Defence of Gold

April 4, 2012 2 Comments

Mr Buffett’s views on gold (post before}will definitely help us realize just how much money can be made in good times from the possession of various assets like securities and farmlands.But come the hard times there is just nothing else that compares with gold.Ganesh Ratnam explains how gold has been a pretty good investment for Indians.

Gold: India’s Capital Asset through History

Mises Daily:Tuesday, October 27, 2009 by Ganesh Rathnam

India’s obsession with gold is well known around the world. To most Western commentators, this obsession seems irrational, and Indian people seem like incurable gold bugs.

However, on closer examination, gold ownership in India is neither excessive nor irrational. In fact, when religious, cultural, and historical perspectives are considered, India’s appetite for gold seems rather matter of fact indeed. Nonetheless, it is not lost on any Indian worth his or her salt that gold is the asset that best protects wealth and freedom.

When my father, a pediatric surgeon, wanted to buy land to construct his clinic and supplement his meager government income, he purchased the land by mortgaging my mother’s jewelry. Similarly, millions of people in India have capitalized their businesses or farms, or secured their basic necessities after severe business reversals, by pledging their gold jewelry. As we shall see below, were it not for gold, the average Indian’s lot through history could’ve been a lot worse.

India’s Per Capita Gold Holdings

India’s private gold ownership is difficult to determine accurately. However, several websites, such as Gold Eagle, estimate the total private gold holdings to be about 15,000 metric tons. Compared to that figure, the Indian government owns a negligible 360 metric tons of gold. Read more of this post