Comments on: Future technology development and investing – Part One.

By: Dan

Dan — Tue, 07 Jul 2009 09:39:11 +0000

The gold bugs usually make no mention of jewellery. It’s all out of proportion, really.

By: Greg Atkinson

Greg Atkinson — Tue, 07 Jul 2009 04:33:54 +0000

Ned – I doubt this will get a mention where the gold bulls gather They also fail to mention that as gold prices go up, demand for gold jewellery tends to head in the other direction and in fact people start taking their rings etc, down to the local gold trader to cash in.

The smallest demand for gold is for industrial use (includes dental) which is in fact the only thing we actually need gold for. It is a funny old world.

By the way on the subject of technology some Japanese firms are trying to work out a way to recover gold more cheaply from disposed electronics etc. It seems one of the largest reserves of gold in the world is sitting in Japanese industrial waste dumps. Already some company has been able to recover gold from industrial liquid waste.

By: Ned S

Ned S — Tue, 07 Jul 2009 02:43:48 +0000

Wonder how widely we’ll see the following reported by the bullion fans? :-

“India, the world’s biggest consumer of bullion, doubled import taxes on gold and silver as the government sought to raise funds to spend on roads and supply food grain to the poor at below market rates.

Purchases of gold bars will attract a duty of 200 rupees ($4.1) per 10 grams, while silver will be charged at 1,000 rupees per kilogram, Finance Minister Pranab Mukherjee said in his budget speech in parliament. Gold imported as jewelry or in any other form will attract a duty of 500 rupees per 10 grams.”

Source: http://www.bloomberg.com/apps/news?pid=20601091&sid=auq8d2Kodx5w

By: Greg Atkinson

Greg Atkinson — Mon, 06 Jul 2009 23:31:08 +0000

Dan we do seem as a society, to be less focused on thinking and more focused on simply acquiring stuff. You can see the lack of thought in action on many discussion forums where people seem to get their entire view of the world via T.V current affairs programmes…scary!

I agree with your comment about erosion of meritocracy. We seem to be finding new ways to cut corners, do things the easy way and generally take the lazy option. It is not going to serve us well in the decades ahead.

By: Dan

Dan — Mon, 06 Jul 2009 23:05:41 +0000

The digital (binary) analogy is excellent, Greg. The big weakness of modern Western society is that its people refuse to think, plus there continues to be the erosion of meritocracy (rising corruption). Everything, even our approach to language (simplify it, reduce vocabulary, etc) is aimed at narrowing our thought processes. As a result, people only develop one way of approaching problems and they develop an inability even to identify problems.

Just reading the newspaper every day there is report after report of a failed government project, with experts saying things like “it would have been better to do a risk assessment before starting”, but on the opposite page there is the usual report of a new government initiative that is being rushed through Parliament and fast-tracked because the End of The World Is Nigh (a War on Something, or a Something Crisis).

I think the Gold Bugs are no different from any other breed of fan-boy. Yes, there is money to be made from gold, but, like any other investment, success comes from shrewd analysis, not from blind faith. But analyzing the gold market is not easy because, frankly, it’s rigged. Better to find a non-rigged market (or a market where you understand the process by which it is rigged) and go from there.

By: Greg Atkinson

Greg Atkinson — Sun, 05 Jul 2009 12:43:36 +0000

Dan what I have generally noticed about people pushing gold is they only present one side of the argument..i.e. the bullish side, and that always raises a red flag with me.

As for the stock market all I can say is after every bear market there will be a bull market, but people seem to confuse the term bull market with a rip roaring rally towards the heavens The market will find a bottom and come off it…and probably has. But this does not mean now is the time to rush in and try to make a fortune.

Sometimes I think a lot of people are “digital” in that they either think it is the end of the world or we are all about to get rich..there is actually a lot of space in between

By: Dan

Dan — Sun, 05 Jul 2009 09:24:53 +0000

That’s a great read, Ned, and a good find:

“Any other class of financial asset, provided it offers a yield, income or growth, should win out over gold.” … that’s all we need to say about gold.

I suspect, Greg, that the reason people are so obsessed with promoting gold is not because they are trying to save the planet from losing all its wealth, but because they have a stake in selling gold themselves. We can never know this for sure of course, and I respect the commentators who are talking up the bear market currently, because in the end I think they will be right, but gold is not the answer IMHO.

By: Ned S

Ned S — Sun, 05 Jul 2009 06:05:40 +0000

Dan/Greg – There is interesting article on gold by a bloke called Adrian Ash that starts off saying “Gold is not the ultimate inflation hedge. Nor is it often much use compared to stocks, bonds or real estate…”

I’ve tried to post the link here (and elsewhere in the past) but have never had any joy? Just google “Long Run Value Gold Part II” if interested.

By: Ned S

Ned S — Sun, 05 Jul 2009 05:41:20 +0000

Following is interesting re gold. It starts off saying: “Gold is not the ultimate inflation hedge. Nor is it often much use compared to stocks, bonds or real estate…”

http://goldnews.bullionvault.com/gold_value_real_021120094

I tried to post a link to it on another site a few months ago and had no joy.

By: Ned S

Ned S — Sun, 05 Jul 2009 05:29:57 +0000

Dan – I had no joy putting a link on a site that mentions yellow shiney stuff reasonably regularly a few months back. Seemed strange as the site reproduced an article by an author, but despite trying on four occassions over two days, I couldn’t get a link to another article by the same author to show up there.
I sure thought the additional article fleshed the picture out. The article started out “Gold is not the ultimate inflation hedge. Nor is it often much use compared to stocks, bonds or real estate…” Link to same follows:
http://goldnews.bullionvault.com/gold_value_real_021120094

By: Greg Atkinson

Greg Atkinson — Sat, 04 Jul 2009 12:22:25 +0000

Dan thanks for stopping by and for the link. I am glad I am not the only one around that thinks there is far too much hype about gold and not a lot of facts.

I agree with you regarding Australia and food production, especially if Australia can maintain high quality produce. Not sure global warming will be a problem though..last time temperatures were up we had a lovely sea in the middle of Oz and some lush forests there as well apparently

By: Dan

Dan — Sat, 04 Jul 2009 06:29:08 +0000

Hi Greg. Nice article – thought provoking actually. I think food production, despite the drought, is going to be Australia’s big growth area down the track – it will just take time to adjust to new climactic conditions.

A thing, barely related, that I wanted to mention which was censored on another website (the one that loves the yellow shiny metal whose name eludes me at this moment in time), is that precious metals markets are actually a very risky investment area currently. Despite the fact that people say “kings of ancient times valued it, therefore it is valuable today”, these metals belong to the most volatile of the resource markets. Of great interest to me was the website http://www.gata.org which seeks to expose market manipulation in the price of yellow shiny stuff. Having read what they have to say has made me interpret things in a different light lately.

Cheers Greg!