Sep 21, 2012 by KitcoNews
Saturday, September 22, 2012
Don Coxe on Gold
Finally after all these years a precious metal commentator that agrees with me that the current bull market in Gold and Silver started on 11 September 2001.
Sep 21, 2012 by KitcoNews
Sep 21, 2012 by KitcoNews
Why $700 Silver is not Madness
I was listening to a Radio National discussion today about life in England during the late middle ages. The following story sparked my interest:
‘Agnes Terry’s recollections of her (alleged) extraordinary childhood as the ward of a dishonest guardian; from her petition to Chancery; c. 1450’
She claims that her mother and father arranged that after their deaths she would be left to the guardianship of John Bicombe, parson of Hatford, together with her inheritance of £40, goods worth £20, and rights over various properties, including a house in Farringdon worth £25. She was then ‘of right tender age’.
The mention of a house being worth only 25 pounds caught my attention. I wondered how much silver that represented.
Well in 1450 I belive a pound represented a troy pound of sterling silver.
A Troy Pound contains 12 Troy Ounces.
Therefore a troy pound of sterling silver is:
12 x 0.925 (purity of sterling silver) = 11.1 troy ounces of 999 silver.
So the house was worth:
25 x 11.1 = 277.5 oz of 999 silver.
Well at current (22 Sep 2012) prices that equates to:
277.5 x 21.26 (GBP spot price of silver) = £5,900
So the house was worth only £5,900?
But we know you can't buy a nice house in a rural town in England for GBP5,900 - such a house would cost at least £125,000
So to upscale the silver value from 1450 to present day we need to recalibrate it to current house prices:
125,000 / 5,900 = 21.18
21.18 x 21.26 = £450/oz silver price or $730
Gold Seen Luring Wealthy as Central Bankers Expand Stimulus
Original source
More high-net-worth individuals are seeking to buy gold to protect their wealth from the risk of rising inflation after central banks boosted stimulus, according to Deutsche Bank AG’s asset and wealth-management unit.
Gold is in the 12th year of a bull run, 13 percent higher this year, as investors seek to hedge against weaker currencies and the threat of rising consumer prices. Photographer: Sergio Dionisio/Bloomberg
“Gold has historically been considered to be a store of value and an inflation hedge and increasingly it is being utilized as a monetary instrument,” said Mark Smallwood, head of Asia-Pacific wealth-management solutions. “There is a growing interest among our clients to gain exposure,” he said, with an increased preference for physical holdings.
Gold is in the 12th year of a bull run, 13.5 percent higher this year, as investors seek to hedge against weaker currencies and the threat of rising consumer prices. Holdings in gold- backed exchange-traded products expanded to an all-time high yesterday, and Bank of America Corp. and Deutsche Bank are among banks forecasting that the price will rally to a record.
Read more