Sunder
10 MW
strantor said:I just watched it. It's a little to "conspiracy theory"-esque for me. I'm not saying it's wrong, just that any "reasonable" or "well-grounded" type would completely discredit it despite any factual content, based on the other content.Spacey said:Did anyone watch the 2nd vid I put in my post?
I totally agree with this - I couldn't find much if anything that was factually wrong with it, but the conspiracy theory side was a bit much for me. Throughout history, there's always been men who try to make money - some by dubious means. Also, riches do run in families, so it doesn't surprise me some names come up more than once over a couple centuries.
What I am surprised by, is that the movie was uploaded by a gold reseller - but the video doesn't advocate a solution to the problem. Buy gold. Well, that's some people's solution. Gold is meant to be an inflation hedge, but in the lifetime of one person, I believe gold is far too affected by speculation. I think it's been in a bubble, and the shine is coming off it now. * Note this is not financial advice, just my opinion - and a less educated opinion than the vehicles I invest in as well, so it's completely worthless.
Like any "system" there are going to be those who get rorted by the system, and those who are going to learn the rules of the system, and they're going to become part of the system. If you never learn the game, you will remain poor forever. If you learn the system early enough - you will eventually become well off, if not rich.
The trick is early sacrifice, and wise investment. It sounds simple, and it is, but people fail because they introduce more complexity into it. They try to make millions instead of being happy with hundreds of thousands. For example, another good inflation hedge (aside from gold)? Property. But only property that you're buying for cashflow, not capital gains. People went nuts. They borrowed and bid up the price of property expecting capital gains - which is a ponzi scheme. If the only reason a property is worth more is because someone is willing to pay more for it, then someone going to be left holding the bomb when it goes off. But if someone is willing to pay more for a property to live in - then that property IS worth more, and you'll find someone to buy it off you at an increased price.
What do I mean by this? Imagine you bought a property for 100k, which someone was willing to pay you 10k to live in per year. A nice 10% yield. By the time you pay a bit of maintenance and any land taxes, say 7% - a little better than what you'd get putting it in a back. You're on a winner.
If you were going to buy a 100k property because the paper said "Utopia is the next boom town. In 10 years it'll be worth $200k" you're taking a gamble not an investment.
Let's just say in 10 years, the property IS worth 200k. If you're collecting 20k in rent, you're still on a good wicket. Keep the property. But if you're only collecting 10k rent, and you can't lease it out for more thank 10k, you know you're in a bubble. Find a "bigger fool" (Who expects it to double again in the next 10 years). If prices crash back to $100k, count your blessings. If it doubles to 400k, then count the 100k you already made and don't get greedy.
Same deal with shares. If something is giving you a 5% franked dividend (or 8%+ unfranked dividend). (Actual numbers depend on what the cash rate is - what you can earn by depositing the money risk free in the bank - but that's a fairly good rule of thumb) Buy up. If the price doubles, count your blessings. If during that price rise, dividends rose as well, hold on. If dividends didn't rise with the price, get out. If the price halves, but the dividend stays the same (in monetary terms) buy more. If the dividends disappear, then get out. * Again, all this is not financial advice, but just general wisdom. I'm not advocating the purchase or non purchase of any asset.
The name of the game is beating inflation. Buy quality assets with good cashflow - any real hard asset, whether it's gold, property, or shares, will rise with inflation (actually it rises with wages, but that's the best you can get). During a bubble, it's impossible to find a positive cashflow property, or high yielding shares that aren't extremely volatile. Don't despair - that's a sign to stay out.
Hope this helps you.
Oh, you had one other question about doesn't the bank lending increase inflation? Yes. It does. But it's no different than if you or I refused to save, and spent every cent we have. Remember what I said about money velocity? Banks keep money moving after people want to stop it (Let it sit in an account, not being spent)
When the velocity of money slows down so much that your real economy can produce more product (Food, electronics, services etc) than there is demand for, then prices drop as people try to sell more product at lower margin. This is called deflation, and it's something the fed is trying to avoid. That's why US interest rates are so low. Who is going to save when the banks is offering 2% for deposits? Who wouldn't want to borrow when banks are charging only 5%?