Get Mad…..or just Get Australian Gold Mining Shares
We're on the eve of a Federal Election where it is widely expected that we will have a change of government to usher in one of the most leftist governments this country has ever seen. It does make you wonder about what our new economic policies might look like when they inevitably take power in a few weeks.
Source
Against a backdrop of an imploding housing bubble market and a potentially slowing global economy it does cast the mind back to the last time this mob were in power and we had a financial crisis – what did they do? Well, the first thing they did was dip into our budget surplus to give Australian citizens some free money via a massive Stimulus Package - estimated by some to be in the vicinity of $100 billion dollars.
Source
Everyone likes free money, right? Why wouldn’t they do it again? After all, the treasurer at the time Wayne Swan was awarded as the Worlds Best Treasurer and while it all seemed like a good idea at the time, to many with the benefit of hindsight….it still seems like a good idea. So what does that mean for investors?
Source
Well, you can say it with me…..CURRENCY DEVALUATION. More debt and more deficit spending eventually leads to more money printing to support it. We already have record low interest rates in this country at 1.50%, so let’s take them even lower! Why do I care? Well, to be honest I don’t much any more. Stupid is what stupid does and the leftist fiscal policy playbook is the same all around the world. They don’t much care about Sound Money – but I do. So let me sum it up for you - The Australian Dollar (Fiat Currency) is just not sound.
Source
So what do I do about it? Well quite simply I don’t hold Australian Dollars and I don’t hold assets that are tied to Australian Dollars. Of course I like Precious Metals for wealth preservation and one of the best (and easiest) ways to invest in Gold is to buy Australian Gold Mining Shares. Not only is that a good Export Commodity play that is relatively immune to the impacts of a falling Australian Dollar, but it is also an Alternative Currency play and it is ALSO effectively leveraged on the Gold Price.
Source
Australia has a good number of Gold Mining companies, but you do need to watch out for those speculators. For the safest plays I’d recommend looking at the big producers. The Big 4 that I like to talk about are Newcrest (NCM), Northern Star (NST), Evolution (EVN) and Regis Resources (RRL). Of course there is some risk with all these companies but for me these shares are safer than the Big 4 Banks and possibly the best place to be parking funds right now if you’re an Aussie who is concerned about the looming political landscape.
Source
DISCLAIMER #1 – This information is for general information only and should not be taken as financial advice. I am not a financial adviser and I encourage all readers to seek independent financial advice before investing in any of the above Shares.
DISCLAIMER #2 – I am not a Liberal Party voter either. In my opinion they are a bunch of idiot and morally bankrupt scumbags also. This post is not a How-To-Vote guide.
No big screen TV for your $900?? My suggestion is not to invest in Nickel mines. Especially those based in the Townsville area. Not sure who to vote for. Last time I voted for myself but apparently one vote is not enough to be elected (though you don't need many to get into the Senate) and someone also said you can't write your own name on the ballot paper either!
(Disclaimer: This is not a how to vote reply comment. Don't vote for me!).
Nickel is a terrible commodity at the best of times. Such a volatile metal.
Posted using Partiko iOS
Sounds like a very subtle reference to Clive Palmer there. Hope you didn't get burnt by bad investments there.
I actually didn't get the $900. At the time I was behind on my returns and I had an aversion to getting government handouts - especially ones I strongly disagreed with. I was probably just being bloody minded though. I should have taken it and bought something shiny with it to remind me of it.
I bought miners instead of Bitcoin :D
They are just looking to come out of the bottom drawer of late, but it's a long way to break-even for me!
You mean Bitcoin Miners?
I experimented a bit investing in some Genesis Mining contracts back in early 2017. Got my money back, but would have been so much better off just buying crypto outright. PoW mining is really only for the specialised infrastructure players these days IMHO.
No not Bitcoin miners sadly, the actual miners that have performed badly these past 5/6 years. I think I just picked the duffers 😩
I would consider 'money back' as a good result at this point!
I know what you mean. I've got a couple of those in the bottom drawer too. Expensive lessons learnt the hard way....but learnt none-the-less.
Put a $1 down for me please buddy. They do say that if the precious metals double, then the stocks rocket ten-fold. I could make $10 😜
It all depends on the AISC (All In Sustaining Cost) of pulling the metal out of the ground. For these guys it can be as simple as :-
Profit Margin = Gold Price - AISC
That's why there can be such strong leverage. Not sure if I'd count on x10 but it certainly would not surprise me.
I bought a laptop with my 'free' $900. Outdated and long gone now. Silver would still be sitting there for me :)
True. Silver went on a tear just after this but then it'd probably be back to $900 worth now. At least you'd have something though.
As an investor/pension fund manager I saw this coming (interest rates dropped to zero here) and bought quite some physical gold and opened 10 yr deposits when interest rates were still higher. Good luck with the new government!
You're very smart. Well done!
Good to see gold at an all time high. A good starting point for the upcoming "challenges".
Every time I get too upset with what's going on in financial politics, I watch John Adams from https://www.adamseconomics.com A brilliant economist, who is trying to educate people about the lack of interest of Australian politicians and the upcoming financial meltdown.
Yes, I've seen Adam pop up in a few videos. He has provided some good insight into the Australian housing market in particular.
I bet you wish you had someone like Trump on your Team...
April 29, 2019... #ssg-membership
Hmm....not really. While Trump campaigned like he thought Sound Money was important he has since been pushing the reflation game and wanting more Rate Cuts and Quantative Easing (Money Printing) from the Fed to support the markets.
In my opinion he is doing what all 21st Century politicians do and trying to boost his re-election chances. The main game for them all is kicking the can down the road and making sure the bubble doesn't burst on their watch.
Well... I’m glad I’m still able to disagree with you... There are many “Views” floating around these Days... One of them must be Right...
Two men say they’re Jesus, one of ‘em must be wrong!
🖖😜
They probably both are wrong :)
Gold mining shares have been a disaster mate, I bought thousands of dollars worth of Lihir shares about 12 years ago. Since that purchase they have pulled out millions of ounces of gold and have paid virtually nothing in dividends. Then they were taken over by Newcrest who's share price crashed and hasn't gotten back to that price to this day. Newcrest has produced millions of ounces of gold and still F#!K ALL dividends, the whole industry is a sinkhole for you cash. Stick with physical and not a hole in the ground run by lying thieves, cheers bro.
That's a fair criticism. Lihir and Newcrest have had some issues over the years and there ARE a lot of unscrupulous boards in the industry - particularly in the smaller caps. That's why I prefer the bigger producers.
I do like to hold physical too, but there comes a point where storage is an issue as well as liquidity. What I like about shares is that you don't have to find storage and they are generally very liquid, but you do need to be careful of the unscrupulous operators.
This post has received a 38.4 % upvote from @boomerang.
Buying good gold-miners right now is a smart play. 👍
Thanks mate. I think Canada must have a few solid gold producers as well. There are some good resources under all that snow ;)