Hi, Jim. Great podcast as usual. It left me with the following questions:
1. If countries are printing money to buy gold, isn’t the current price of gold as phony as the value of paper money (in proportion to the money printing to buy gold as a percentage of total gold buying)?
2. If treasuries are terrible for US trading partners, why aren’t they terrible for the individual investors in the USA? Or framed differently... if I knew I was going into hibernation for 10-20 years, would it be insane to leave $$ in short term treasuries as opposed to real estate or gold? For the active investor, treasuries can be a place to short term park money. For the relatively inactive investor, are treasuries lunacy?
3. The characterization of the dollar as strong... the currencies that impact me directly are the euro, pound, peso. The dollar feels weak to me, with perhaps the exception of the recent peso comeback, which is largely due to severe political concerns in Mexico as opposed to anything USA is doing right. No real question on this point. Just a comment.
Hi Tom, I am glad you enjoyed it! 1) I think it means that they view gold as much more valuable than the price they pay for it in their fiat currencies. So, I wouldn't say the price of gold denominated in fiat currencies is "phony," but the more they print, the cheaper the currencies will be priced in gold. 2) Your "hibernation" analogy is good. It's really the same question as "What would I hold over 20 years if I could not sell it." I certainly would NOT own a 20-year Treasury bond at its current 4% handle. T-bills would make more sense, as there are times when they can make a dent in inflation, but rarely do they offer an excellent return. Real estate and gold make a lot more sense to me. I would not call Treasuries "lunacy," but I can't imagine why someone would buy them unless they think they can trade their prices on interest rate changes. 3) When I went to France and the UK last May, I was surprised at how much the dollar would buy. My son just returned from a trip to Japan, and he told me about prices in the local 7-11 (beer, snacks, etc). At the prevailing exchange rates, Japanese prices seemed about 40% less than US prices. These exchange rates have changed a little since then, but the dollar appears pretty strong right now compared to other times in my career. I doubt that will last, BTW.
Hi, Jim. Great podcast as usual. It left me with the following questions:
1. If countries are printing money to buy gold, isn’t the current price of gold as phony as the value of paper money (in proportion to the money printing to buy gold as a percentage of total gold buying)?
2. If treasuries are terrible for US trading partners, why aren’t they terrible for the individual investors in the USA? Or framed differently... if I knew I was going into hibernation for 10-20 years, would it be insane to leave $$ in short term treasuries as opposed to real estate or gold? For the active investor, treasuries can be a place to short term park money. For the relatively inactive investor, are treasuries lunacy?
3. The characterization of the dollar as strong... the currencies that impact me directly are the euro, pound, peso. The dollar feels weak to me, with perhaps the exception of the recent peso comeback, which is largely due to severe political concerns in Mexico as opposed to anything USA is doing right. No real question on this point. Just a comment.
Thank you!
Hi Tom, I am glad you enjoyed it! 1) I think it means that they view gold as much more valuable than the price they pay for it in their fiat currencies. So, I wouldn't say the price of gold denominated in fiat currencies is "phony," but the more they print, the cheaper the currencies will be priced in gold. 2) Your "hibernation" analogy is good. It's really the same question as "What would I hold over 20 years if I could not sell it." I certainly would NOT own a 20-year Treasury bond at its current 4% handle. T-bills would make more sense, as there are times when they can make a dent in inflation, but rarely do they offer an excellent return. Real estate and gold make a lot more sense to me. I would not call Treasuries "lunacy," but I can't imagine why someone would buy them unless they think they can trade their prices on interest rate changes. 3) When I went to France and the UK last May, I was surprised at how much the dollar would buy. My son just returned from a trip to Japan, and he told me about prices in the local 7-11 (beer, snacks, etc). At the prevailing exchange rates, Japanese prices seemed about 40% less than US prices. These exchange rates have changed a little since then, but the dollar appears pretty strong right now compared to other times in my career. I doubt that will last, BTW.