Are we in the middle of a financial meltdown?

[Freising 503]

Financial Times Deutschland just reported that german Hypo Real Estate is close to a collapse. Problems arose in an irish subsidiary. I wonder if we will see the same muppet show over the next days as in the US.

[gaberlunzi 814]

Fortis Bank was nationalized by the Benelux countries. The rot has set in Euroland too.

[gaberlunzi 814]

“My investment plan remains the same. I expect real assets will greatly out-perform financial assets. First, I want to buy gold and silver in physical form whenever I can. In the world of inflation, while cash is king, gold is the emperor! Second, I look to accumulate real assets if they are quality assets and the prices have crashed down. So, I do believe that in a few years even real estate will again be a great inflation hedge!”

 

from blog InvestorCentric

[gaberlunzi 814]

What got them into trouble:

 

Structured product (Wikipedia)

[tom_a 459]

 

Fortis Bank was nationalized by the Benelux countries. The rot has set in Euroland too.

They "only" took a minority stake (49 %), though. For now, that is.

[BattalionBoy 18]

Rome is burning alright and some bright sparks have decided to quell the flames by chucking in 700 billion dollars of kerosene – that will be interesting to watch. I think people should put their money, if they have any, in French or Swiss banks. The lesson to be learnt here is that "gourmet" is better than "gourmand".

[Freising 503]

I just read a very interesting german article in "Die Zeit". It might be the chinese had a lot more to do with the US governments bailout strategy than I would have ever imagined. They had invested big time in Fannie, Freddie, Blackstone and Morgan Stanley and politely "informed" Bush that, if they were going to loose their investments, they would have to get rid of their dollar reserves. I guess it´s not the gravity of the situation that forced GWB to act, it was the orders of his chinese overlords. :ph34r:

[pike 323]

RBS is now a target, even without short-selling - a victim of the Fortis collapse / links to ABN Amro.

Santander buys B&B deposits to secure some cash and then sees nationalisation of partly-owned Fortis.

[pike 323]

 

I think people should put their money, if they have any, in French or Swiss banks.

Like Dexia?

[MonksTown 104]

Got a call from the bank last week askingme to consider moving my cash savings into one of their investment funds.

I'm like, I'll call you, sometime.

[lilplatinum 7,142]

While, continuing the theme from the other thread with inaccurate Roman analogies, after Rome burnt Nero rebuilt many of the wooden structures with brick and not so closely together to prevent a future fire. So sometimes a destructive inferno leads to something better being built up from the ashes.

[RainKing 1,318]

 

“My investment plan remains the same. I expect real assets will greatly out-perform financial assets. First, I want to buy gold and silver in physical form whenever I can. In the world of inflation, while cash is king, gold is the emperor! Second, I look to accumulate real assets if they are quality assets and the prices have crashed down. So, I do believe that in a few years even real estate will again be a great inflation hedge!”

 

from blog InvestorCentric

I have never understood gold as an investment. What use is it, apart from jewelry and some microcircuits, and that schapps you can get in Dresden? It seems that the only thing giving it value is the long standing belief that it has value- which sounds like the ulitmate (Dutch tulips notwithstanding) bubble investment.

 

Warren Buffet said something like, they dig it out of one hole in the ground and stick it in another hole in the ground and put some guys to guard it.

 

Can anyone enlighten me as to why gold is a good investment?

[worm 72]

because gold is a form of 'money' that is separate from the financial system that has always been traditionally used as a safe haven in times of financial instability - and because in a hypothetical situation, if you were trying to move countries lets say, it might be that your paper money is not worth anything in that other region, but gold has a value to people in every country in the world

[pike 323]

Gold's good if you want to buy something when The End comes.

But I agree - I don’t think planning on Armageddon is sensible, and if we have Armageddon, who are you going to sell your gold stocks to, and what for?

The Chinese / Indians are known to like gold though, so maybe not a bad investment (though at nearly $900 an ounce, a little pricey perhaps).

[RainKing 1,318]

 

because gold is a form of 'money' that is separate from the financial system that has always been traditionally used as a safe haven in times of financial instability - and because in a hypothetical situation, if you were trying to move countries lets say, it might be that your paper money is not worth anything in that other region, but gold has a value to people in every country in the world

I know it has a notional value, and no doubt is sound enough as long as that continues. My question is, what gives it any value? It's just a useless lump of yellow metal. If I invest in, say IBM, then I'm investing is the chance (however unlikely), that they do something productive or original, make a profit, and grow in value, giving me a return on investment. But gold... just sits there.

 

I have feeling that one day someone else will suddenly get the same idea and gold prices will collapse in the way of other useless things, giving a whole new literal meaning to the word meltdown.

[Johnny English 3,071]

 

My question is, what gives it any value? It's just a useless lump of yellow metal.

To be fair - it is actually USED in industrial production of many electronic things.

[Freising 503]

Gold is rare. That is the one attribute that counts. You need something rare to be used as replace money, otherwise you get inflation.

[lilplatinum 7,142]

Mediums of exchange have not had intrinsic value since we moved past the barter system.

[Johnny English 3,071]

 

Gold is rare. That is the one attribute that counts. You need something rare to be used as replace money, otherwise you get inflation.

On that basis I reckon a blowjob in my house is possibly the most valuable commodity know to man.

[Freising 503]

Did I use the wrong word, should I have said scarce? Or are you trying to make some money? ;)