Any downside to bars?

[ochotona]

US Dollars. Not Renmenbi.

I'm waiting and seeing what happens at the FOMC meeting mid-March. If they do raise interest rates, and the Dollar moves up, gold could move down, then it could a good time to buy. If they don't raise rates, I just need to wait until they have the guts to do so - the next meeting, May 2-3.

The thing about these Texas Precious Metals limit orders; they trade 24/7, so if you get spike downward overseas while we sleep, your trade could execute. I'm hoping for a happy $1200 accident somewhere.

[thisisallen]

Jobs report comes on Fri. If it is good then the rate increase is more certain.

[mathjak107]

things are likely priced in at this point . it was one swift reprice , that is for sure . long term treasury bonds fell 2% . that is like a 400 point drop in the dow .

after the increase things will recover in gold and treasury bonds once again .

historically short term increases in rates has been good for bonds .. only 1994 has been the exception . bonds ultimately like the slowing effect of rising short term rates . as long as inflation is not a problem . .

as jack bowers said , at this point the positives are:

" the dollar’s strength. When the greenback is rising, it tends to attract foreign capital, boosting the supply of money available to lend. The second is corporate tax reform. While it’s hard to predict how imports and exports will be treated, the odds that it will become easier and cheaper for firms to repatriate overseas capital are high. And if that happens, the issuance of corporate debt could slump, reducing borrowing demand "

[ochotona]

Then when I have my essential "stash o' bars" put away at Chappell Hill Bank, I'm gonna fuhgedaboudit. Just like I don't wonder day-to-day about the price of my house, which I've been in for 24 years.

[mathjak107]

of course the difference is you are consuming the house by living in it . whether it is worth 100k or 500k is irrelevant as long as you consume it .

if you were concerned about the house being your piggy bank and living off it now by selling it you would feel different . while you live in it the house is doing it's job by giving you a place to live .

on the other hand in order for our investments to do their job they need to compound and grow

[ochotona]

of course the difference is you are consuming the house by living in it . whether it is worth 100k or 500k is irrelevant as long as you consume it .

if you were concerned about the house being your piggy bank and living off it now by selling it you would feel different . while you live in it the house is doing it's job by giving you a place to live .

on the other hand in order for our investments to do their job they need to compound and grow

My health insurance, long-term care insurance, term life insurance, car insurance premia do not compound and grow, and yet I pay them dutifully.

I am content to idle up to 10% of my portfolio in an insurance asset which, in the average case over the span of my life, will stay at par with inflation (10% but not 25%).

I think of gold as insurance with "return of premium" feature at the end, but how much is returned isn't quite clear to us now. And like life insurance with a feature to take out cash value, if you bought at $1800 and it's now $1200, and you lose the retail mark-up also, well, you don't get so much cash value back today, so it may or not be good to take out the cash now - so don't. Wait for better times!

[mathjak107]

expenses are not assets .

gold goes up in value and over time and just about tracks inflation so while you call it insurance it really is an asset not an expense . it is like TIPS in a way . it is also a competitor to the dollar . holding dollars is an asset . holding gold is another form of currency so it is not like your auto insurance at all .

you have to differentiate between what is a consumption item and what is an asset .

we have some fine art pieces but they are a consumption item . i have no interest in selling them . if i was an art investor then i would consider them an asset since i would generate profits or losses with it . but since i am using it as i would my home for now they are consumption items .

a home represents your cost of housing . it may be cheaper for you than renting but it is your cost of housing while you consume it .

[ochotona]

expenses are not assets .

gold goes up in value and over time and just about tracks inflation so while you call it insurance it really is an asset not an expense . it is like TIPS in a way . it is also a competitor to the dollar . holding dollars is an asset . holding gold is another form of currency so it is not like your auto insurance at all .

you have to differentiate between what is a consumption item and what is an asset .

we have some fine art pieces but they are a consumption item . i have no interest in selling them . if i was an art investor then i would consider them an asset since i would generate profits or losses with it . but since i am using it as i would my home for now they are consumption items .

a home represents your cost of housing . it may be cheaper for you than renting but it is your cost of housing while you consume it .

Gold is an asset, but it provides an insurance service, in the same way that your house is an asset but provides a housing service.

[mathjak107]

except you can't sell off a piece of your living room to buy groceries like you can your gold or sell the bedroom off to rebalance . . .

long term treasury bonds can be insurance too if you want to look at the protection side of things . my gold since i bought it after it fell recently is up more than my other assets .

you do not consume gold . you are free to trade it for anything you like . you can't do that consuming your house . it is only when you are willing to give up ownership or partial ownership that the house can move off the consumption side if you are living in it using it . .

[ochotona]

except you can't sell off a piece of your living room to buy groceries like you can your gold or sell the bedroom off to rebalance . . .

long term treasury bonds can be insurance too if you want to look at the protection side of things . my gold since i bought it after it fell recently is up more than my other assets .

you do not consume gold . you are free to trade it for anything you like . you can't do that consuming your house . it is only when you are willing to give up ownership or partial ownership that the house can move off the consumption side if you are living in it using it . .

I guess you never heard about AirBNB!

[mathjak107]

then you are not consuming it totally . you made it a part time investment property . not apples to apples . you can take in a room mate too for that matter and cost share . but in any case you are turning it in to a business property .
by the way air bnb is banned here in nyc .

like me renting out my paintings .

if you rented out your house on air bnb you would be concerned with the value , unlike what you said about not caring . if you were renting it you would need to know what you can charge for it .

the whole discussion was because you said in 24 years you did not care what the value was and my answer was that was because it was irrelevant if you consume it .

but when you are not consuming it you care very much what it can sell or rent for ..

[dualstow]

@ochotona. I just noticed your post count is "1200." Hope that will be a good omen for you. If it goes to 1200 I would also be a buyer.

Ha!
1200 is also one of those nice numbers that gets me trying to calculate how many gold 1oz coins my house cost, and how many it would cost to buy it today. I like to do those calculations when I'm out walking.

I guess ochotona can start thinking in terms of bars.

Some more blathering:

Lately, I have the urge to unload all my taxable account's gold ETFs and immediately replace them with coins.
I can't really make use of tax loss harvesting, or I suppose I'd do it now.
I'm sure there's some reason why this swap is weird or stupid, but I think I want coins in taxable and ETFs in my Roth.
Maybe someday, this Australian storage could be more appealing but for now, I just think that if anything happens to me, my wife or parents can just go to the bank and retrieve my coins. When I'm twice the age I am now, I'll probably have dementia, and I doubt my wife will want to chase down foreign-held accounts. It's a pain to just try to get her to invest!

[sophie]

Lately, I have the urge to unload all my taxable account's gold ETFs and immediately replace them with coins.
I can't really make use of tax loss harvesting, or I suppose I'd do it now.
I'm sure there's some reason why this swap is weird or stupid, but I think I want coins in taxable and ETFs in my Roth.

Yup, that's what I did a few years back. Coins are less complicated than taxable ETFs and a lot more enjoyable. I don't trust myself with bars...they are a lot less durable and easily damaged than coins. I decided there's a limit to how many coins I'm willing to keep though, and that's when I started on the Perth Mint adventure.

I have ETFs in my Roth at Fidelity too, and debating swapping them for unallocated gold coins. Have you looked into that? It's only slightly more expensive than an ETF. I'm not sure it's really safer than an ETF, but it seems like it should be.

[mathjak107]

i think if we have to start worrying here about the safety of gold in an etf then it is time to concentrate more on collecting guns and bullets than some off shore account you may have zero access to anyway ...

[dualstow]

Re paragraph two, no I haven't, Sophie. I like the ETFs in a Roth and will only sell them if I have to get to rebalance.

Limit to how many coins you'll keep-- at home?

What do you see yourself doing with the Perth gold when it's time to rebalance out? I'm still curious about Australian storage, if I reach the point that I have enough to diversify.

[dualstow]

By the way, meant to say I would be swapping ETFs in taxable for physical gold specifically at breakeven.

[sophie]

Re paragraph two, no I haven't, Sophie. I like the ETFs in a Roth and will only sell them if I have to get to rebalance.

Limit to how many coins you'll keep-- at home?

What do you see yourself doing with the Perth gold when it's time to rebalance out? I'm still curious about Australian storage, if I reach the point that I have enough to diversify.

I checked with my insurance company about insuring coins, and it's annoyingly expensive. I have most in a safe deposit box and a few still at home.

If we are ever lucky enough to rebalance out of gold, I'll sell the ETFs in my 401K. If I need to sell from the Perth stash, that's super simple to do online: put in a sell order then transfer cash to the linked bank account. I'd just have to come up with something for cost basis in order to figure the taxes, which of course would be at the collectibles rate.

[dualstow]

That's what I was hoping you'd say. See, that's actually appealing to me. While I don't mind trickling coins into a bank box bit by bit, I wouldn't like to shuttle a large amount to the post office for sales.

A cash transfer to the bank is easy, no fear of robberies. And cost basis would be in the Mint's purchase records, right?

[dualstow]

There was a conversation with Libertarian666 about markup vs spread. The transaction fees look good to me at Perth. https://www.perthmint.com/storage/pricing.html

ADDED: grapesofwrath pointed out the time zone annoyance in the FATCA thread. I think I'd go for the online version if I used this, not the telephone one, which shows different fees.

[ochotona]

C'mon baby... 1200. Then Daddy can go home.

[sophie]

That's what I was hoping you'd say. See, that's actually appealing to me. While I don't mind trickling coins into a bank box bit by bit, I wouldn't like to shuttle a large amount to the post office for sales.

A cash transfer to the bank is easy, no fear of robberies. And cost basis would be in the Mint's purchase records, right?

Perth's records will tell you the total amount of deposits & withdrawals to date, and the # oz gold you are holding. Not cost basis for the different purchases. I figure I will simply divide net cash by #oz gold as monthly purchases are going to be too difficult to track. I believe the US is a bit unusual in requiring that brokers keep records of cost basis. Before that started, I had to do a lot of guesstimating since I always managed to lose the little pieces of paper that I got in the mail with purchase info. Never had any trouble with the IRS over that, even though I was audited once.

[dualstow]

yeah, my earliest paper receipts are...somewhere. I have images of all my checks, though.

Perth's records will tell you the total amount of deposits & withdrawals to date, and the # oz gold you are holding. Not cost basis for the different purchases.

Are you going to set it to automatically put the same amount of $ in, regardless of price, each month like buying Vanguard index funds? That's cool. I need to look up what Harry said about unallocated storage. I don't think he liked it, but that's not necessarily a showstopper for me.

[ochotona]

$1208 now! This metal is really volatile.

[Libertarian666]

$1208 now! This metal is really volatile.

Really? I hadn't noticed.

[ochotona]

I got my price. Now I can relax, I have enough to make a meaningful difference if we have the re-emergence of risk later this year. Back to a coin at a time!