Comments on: Gold and Oil are Acting as Though They Expect Higher Rates of Inflation

By: jack

jack — Mon, 20 Apr 2009 00:26:46 +0000

THE ONE THING YOU ALL HAVE TO REMEMBER IS THE GOV WILL TELL YOU ANYTHING ,THE REALITY IS THAT AUSTRALIA IS IN A MUCH WORSE STATE THAN USA IN THE HOUSING AND CREDIT BUBBLES ,REMEMBER WHEN KRUDD SAID BACK IN FEB WHEN HE GAVE THE BANKS A BAILOUT THAT THEY ALMOST WENT BROKE ,WEL THATS THE REAL STORY I BELIEVE THEY ARE ,REMEMBER BANKS LEVERAGE OVER HERE AT LEAST TEN TIMES THE AMOUNT ,1 TRILION DEBT IN CREDIT DEBT WOULD NOW BE TEN TRILLION ,SAVINGS OF WHICH THEY ONLY HAVE TO KEEP HALF BY LAW MEANS THAT THE 1 TRILLION WE HAVE IN SAVINGS IS ONLY 500 MILLION , THE OTHER 500 MILLION LEVERAGED OUT X10 FOR 5 TRILLION ,GET THE PICTURE ?GOLD AND SILVER WILL BE A GOOD HEDGE ,THEY ARE ALL DEBASING THEIR CURRENCY TO GET OUT OF THIS MESS BUT IT WONT WORK ,THE UK IS 12 TRILLION POUNDS IN DEBT ,THE USA 12 TRILLION ,THE NUMBERS ARE JUST TOO BIG AND IT WILL CRASH ,INFLATION WILL GO THROUGH THE ROOF.GOV GUARANTEES ARE WORTHLESS IF THEY ARE PAYING YOU IN MONEY NOT WORTH A DIME ,AND ALL THE FIGURES ARE FUDGED ,I WOULDNT TRUST THEM TO WALK MY DOG ,PROPERTY HERE NEEDS TO COME DOWN AT LEAST 50 % AND ITS GETTING HARD TO BUY SILVER IN THE USA ,A NEW CURRENCY WILL BE COMING I THINK ALONG WITH WAR IF HISTORY IS ANYTHING TO GO BY ,AND THE GOVERNMENTS ARE JUST STEALING OUR MONEY .FARMING IS THE NEXT BIG BOOM .

By: Coffee Addict

Coffee Addict — Fri, 04 Jul 2008 02:49:11 +0000

Martin I'm parked in cash also. What most funds advertise as cash actually means "cash based". This can include mixtures of actual cash at bank, corporate bonds, securities, subordinated debt, CDS' and CDOs etc. There may also be some options used as short term hedges. While most "cash" cocktails tend towards the lower end of the risk scale you will need to confirm the actual mix (and the associated risks) with your fund. No its not safe but neither is anything else. And the AUD is linked strongly to commodity prices! A problem is that the rules and procudures pertaining to the funds are designed for "hands off" "mum and dad" investors seeking to retire "quietly" within an ongoing bull market. The current rules, benchmarks , and investment strategies are in my opinion crap and many of the people managing these funds are unable to think beyond following the index. With perhaps one or two exceptions, most funds don't operate like WRAP accounts ---- for example, one of my funds requires a month's notice of a portfolio change request and even then there is no guarantee that they will action it on the expected date. In the other fund (the old Government PSS Scheme) I'm allowed only two shifts a year with the choices of only "cash" and "portfolio". It's sheer madness, I don't trust them, but there is nothing I can do about it! If, unlike me you do have "superannuation choice", you may like to investigate those few funds that do provide more of a WRAP account like capacity. To use these accounts effectively you do, however, need some expertise along with the confidence to stay one step ahead of the market and the popular business press news. The fees are likely to be high but you need to do your own research. Do-it-yourself super is another option but you need to know what you are doing and the compliance requirements can be a burden. At least you are still well ahead of the pack. Good luck!

By: Martin

Martin — Thu, 03 Jul 2008 14:00:18 +0000

Thanks in part to reading the DR, I switched my superannuation (pension) funds out of shares in late 07 and managed to avoid much of the carnage in 08. Presently it's all parked in a cash unit fund, denominated in Australian dollars. Within the broader fund scheme, the worthwhile choices are basically; A$ cash with a little interest, Australian ASX200 share index units, Property units, international share units (mostly US) both with and without currency hedge, and an oddball emerging markets unit. The other ‘choices’ are 25 or so rubbish funds provided to give the appearance of choice. It’s a bit like; “Would you prefer these light brown turds or those darker brown turds?”

Back when gold was around $400/oz, and oil and other stuff was cheaper I suggested to the trustees that their super fund choice offerings had some serious holes which exposed members to substantial risk, namely; lack of gold based units, lack of various international cash only oriented units (i.e US$, Euro, a mixture) and lack of commodity oriented units.

While parked in cash at times, growth is essentially horizontal. Fortunately the A$ has been rising against the US$ so there is a little tiny bit of hidden joy to it. The questions I have are; say the financial world does go to hell in a hand basket, as suggested here, and the US$ goes the way of the Argentine Peso, what other currencies might it take down with it and which will hold up? Relative to gold and things I suppose. In particular; while the Australian dollar has been rising against the US$ and generally following the Euro, the question burning at the back of my mind is; is an Australian dollar denominated Cash fund actually all that safe a parking place?

Of course whether the custodian goes bust and the ‘safe’ cash and everything else evaporates too, is yet another matter.