Gold 2024: How low can it go?

[Chronos]

Frenchie, littleredflower and 8 other users are also here.

 

Everybody is flocking to this thread. This is getting out of control!

Edited January 2 by Chronos

[katyc]

11 minutes ago, Chronos said:

Also, gold is in your possesion. You own it.

On the other hand, when you (as a bank customer) deposit physical cash into a bank it becomes the property (an asset) of the bank, and you lose your legal ownership over it. What you receive in return is a promise (an IOU) from the bank to pay you an amount equivalent to the sum deposited.

We are entering the phase when we just don't know if our banks are going to be around tomorrow so you have to take this into consideration also.

Good point. l like to spread my funds between different banks but I'm not too worried about it because if it got so everyone's money disappeared and even the FSCS no longer protected us (apparently they don't have enough insurance to cover everyone's money anyway 😬), that would mean that we were in such a dire situation - which would mean gold had rocketed - so precious metals investors are protected either way.

I subscribed to Money Week magazine last week (first 6 issues are free). Apparently it's a really good little mag you can read over a coffee on a Saturday morning. Many top investors read it (it's a UK magazine) and the insights and warnings could be really beneficial to us investors (even more useful for fans of stocks and shares I'm guessing).

Edited January 2 by katyc

[HonestMoneyGoldSilver]

@Kitalon:

1) What everybody is saying about DCA is solid advice. If you diverge from that advice you need very strong reasons for doing so

I diverged from DCA on silver due to what I believed was a fundamental analysis of minimum silver prices (Silver floor) - which I calculated to be $20. When the price fell below $20 I started buying relatively large amounts. I've been buying every dip since then in the knowledge that the fundamental floor for silver is constantly rising. The fundamental floor is the real cost of mining silver, often referred to as the AISC (All-in Sustainability Cost). We can see from official filings that the AISC of several major producers is already $20+ and rising fast due to baked-in sticky inflationary pressures like wage increases, increases in cost of finance, increases in ESG expenditure plus all the stuff actually related to mining like machinery, land costs and energy costs (mining, refining, warehousing and shipping). It's more difficult to do that with gold as there's a larger delta between the AISC and spot price of gold but the AISC of gold is also rising fast. The AISC for gold is in the $1400-1700 region, which sets a floor on gold of say $1600. I believe that $1600 figure is probably a little low but I'm going for data-driven solutions here, not opinions. If the price is currently $2050 then you would be theoretically risking roughly 20% of your investment by buying now. You should understand that gold can go down as well as up and you should have a fair idea of how much you are risking and how much you are willing to risk. 

2) Looking for a dip in gold you'll probably have to wait until the summer of 2024 but there probably won't be any appreciable dips at all. We're still in the traditional strong months for metal prices which last until after Chinese New Year. As others have said, 2024 is an election year in the USA and every man and his dog are predicting the Fed will cut rates before the election. When the Fed/BoE/ECB start cutting rates it reduces the opportunity cost of buying metals by reducing the risk-free rate - which is technically the 3-month Treasury rate but you could also use proxies such as ISA returns, returns on savings accounts, UK Gilts, longer-duration bonds and Treasuries, etc to suit your investment horizons.

So the returns on parking your money in safe assets will decrease and the returns from parking your money in gold will increase. Gold and silver prices react to monetary policy, inflation and the stock market. When rates go down, gold goes up. When inflation goes up, gold goes up. When stock markets crash, well, gold will also have a minor dip if historical performance is repeated, thereafter gold will peak approx 2 years after the onset of the crisis as happened in 2008. The only way gold goes down over the long term is if the financial system stops creating new debt and the world is at peace. Are debts going down in the UK, EU, USA, Japan, China? Seems they're accelerating in the wrong direction, which is the right direction for gold price appreciation. Are we in an era of Pax (peace) or are we in the middle of a period of unrest not seen since the end of the Cold War? Debt and war = increase in gold prices and potentially dramatic increases over short periods of time

3) Nobody has talked about running a balanced portfolio. If you are considering putting more than 25% of your investment funds into precious metals you better have good reasons for doing so - reasons you fully understand and that belong to you as opposed to buying into what somebody else has said. Always do your own research, make up your own mind and live and die according to your own judgement. Having said that, IMHO the optimal play right now is keeping most of your money (75%) in essentially risk-free assets like maxing your ISA, UK Gilts, USA Treasuries, ensuring you have plenty of powder left to buy the inevitable dip in stocks. The stock market historically produces better returns than gold over the longest horizons. Currently gold is outperforming the stock market which is a major warning sign of recession/depression. Many analysts are expecting a 30-45% haircut on stocks especially the FAANG+, Tesla, Microsoft, etc. When the SHTF you want money to buy the dip in stocks. In the meantime you should DCA into gold (and silver) with the 25% maximum allocation you have for those assets.

Apart from investing your money, I would also advocate paying off debts. Paying off your mortgage, credit cards, car loans, student loans, whatever, gives you a guaranteed return on your investment proportional to the interest rates you're currently paying. It also reduces your monthly outgoings to a minimum which increases the funds you have available to invest in gold or securities in the future. 

4) The money you save by buying your precious metals at the lowest possible retail prices - on TSF - is actually a form of insurance against spot price dips relative to buying from regular dealers. This potential saving is largest for silver due to the 20% VAT but there are also real possible savings on gold too. If you find a nice cheap insurance policy from say LV, you can store your precious metals at home for the lowest possible price too as opposed to paying for vaulted services or a security deposit box (which you must also pay insurance on)

Sorry, TL:DR

[HonestMoneyGoldSilver]

Forgot to mention gold mining stocks!

[katyc]

3 minutes ago, HonestMoneyGoldSilver said:

@Kitalon:

1) What everybody is saying about DCA is solid advice. If you diverge from that advice you need very strong reasons for doing so

I diverged from DCA on silver due to what I believed was a fundamental analysis of minimum silver prices (Silver floor) - which I calculated to be $20. When the price fell below $20 I started buying relatively large amounts. I've been buying every dip since then in the knowledge that the fundamental floor for silver is constantly rising. The fundamental floor is the real cost of mining silver, often referred to as the AISC (All-in Sustainability Cost). We can see from official filings that the AISC of several major producers is already $20+ and rising fast due to baked-in sticky inflationary pressures like wage increases, increases in cost of finance, increases in ESG expenditure plus all the stuff actually related to mining like machinery, land costs and energy costs (mining, refining, warehousing and shipping). It's more difficult to do that with gold as there's a larger delta between the AISC and spot price of gold but the AISC of gold is also rising fast. The AISC for gold is in the $1400-1700 region, which sets a floor on gold of say $1600. I believe that $1600 figure is probably a little low but I'm going for data-driven solutions here, not opinions. If the price is currently $2050 then you would be theoretically risking roughly 20% of your investment by buying now. You should understand that gold can go down as well as up and you should have a fair idea of how much you are risking and how much you are willing to risk. 

2) Looking for a dip in gold you'll probably have to wait until the summer of 2024 but there probably won't be any appreciable dips at all. We're still in the traditional strong months for metal prices which last until after Chinese New Year. As others have said, 2024 is an election year in the USA and every man and his dog are predicting the Fed will cut rates before the election. When the Fed/BoE/ECB start cutting rates it reduces the opportunity cost of buying metals by reducing the risk-free rate - which is technically the 3-month Treasury rate but you could also use proxies such as ISA returns, returns on savings accounts, UK Gilts, longer-duration bonds and Treasuries, etc to suit your investment horizons.

So the returns on parking your money in safe assets will decrease and the returns from parking your money in gold will increase. Gold and silver prices react to monetary policy, inflation and the stock market. When rates go down, gold goes up. When inflation goes up, gold goes up. When stock markets crash, well, gold will also have a minor dip if historical performance is repeated, thereafter gold will peak approx 2 years after the onset of the crisis as happened in 2008. The only way gold goes down over the long term is if the financial system stops creating new debt and the world is at peace. Are debts going down in the UK, EU, USA, Japan, China? Seems they're accelerating in the wrong direction, which is the right direction for gold price appreciation. Are we in an era of Pax (peace) or are we in the middle of a period of unrest not seen since the end of the Cold War? Debt and war = increase in gold prices and potentially dramatic increases over short periods of time

3) Nobody has talked about running a balanced portfolio. If you are considering putting more than 25% of your investment funds into precious metals you better have good reasons for doing so - reasons you fully understand and that belong to you as opposed to buying into what somebody else has said. Always do your own research, make up your own mind and live and die according to your own judgement. Having said that, IMHO the optimal play right now is keeping most of your money (75%) in essentially risk-free assets like maxing your ISA, UK Gilts, USA Treasuries, ensuring you have plenty of powder left to buy the inevitable dip in stocks. The stock market historically produces better returns than gold over the longest horizons. Currently gold is outperforming the stock market which is a major warning sign of recession/depression. Many analysts are expecting a 30-45% haircut on stocks especially the FAANG+, Tesla, Microsoft, etc. When the SHTF you want money to buy the dip in stocks. In the meantime you should DCA into gold (and silver) with the 25% maximum allocation you have for those assets.

Apart from investing your money, I would also advocate paying off debts. Paying off your mortgage, credit cards, car loans, student loans, whatever, gives you a guaranteed return on your investment proportional to the interest rates you're currently paying. It also reduces your monthly outgoings to a minimum which increases the funds you have available to invest in gold or securities in the future. 

4) The money you save by buying your precious metals at the lowest possible retail prices - on TSF - is actually a form of insurance against spot price dips relative to buying from regular dealers. This potential saving is largest for silver due to the 20% VAT but there are also real possible savings on gold too. If you find a nice cheap insurance policy from say LV, you can store your precious metals at home for the lowest possible price too as opposed to paying for vaulted services or a security deposit box (which you must also pay insurance on)

Sorry, TL:DR

Brilliant post! Thank you

[katyc]

8 minutes ago, HonestMoneyGoldSilver said:

Forgot to mention gold mining stocks!

I want to get in to this but not done any research yet. May have a look to see if we have a thread on the subject - maybe we should start one if not!

[HonestMoneyGoldSilver]

10 minutes ago, katyc said:

I want to get in to this but not done any research yet. May have a look to see if we have a thread on the subject - maybe we should start one if not!

Our resident expert might be @HerefordBullyun along with @Bumble, @CowPat @Stacktastic and several others who own mining stocks

Edited January 2 by HonestMoneyGoldSilver

[GoldDiggerDave]

1 hour ago, JohnA1 said:

Real inflation is way over 5.25% and will remain so for several years to come, judging by the amount of paper they have already printed.

So the bank yield is a guaranteed loss from the get go.

Gold is  nowhere near keeping up with inflation its moving but way off in my book.  
 

For me once interest rates got over 4% I’m living for free as the yield is more than my outgoings.  Not bragging or giving it the big one, just opening peoples eyes that Fiat is not as ugly and a dirty as some PM holders have convinced themselves it is. 

I will take that 5.25% and I can assure you it’s a net gain for me.   

 

[katyc]

6 minutes ago, GoldDiggerDave said:

Gold is  nowhere near keeping up with inflation its moving but way off in my book.  
 

For me once interest rates got over 4% I’m living for free as the yield is more than my outgoings.  Not bragging or giving it the big one, just opening peoples eyes that Fiat is not as ugly and a dirty as some PM holders have convinced themselves it is. 

I will take that 5.25% and I can assure you it’s a net gain for me.   

 

That is the case the last few years - but it will far out weigh in the other direction at other times (especially when interest rates pivot back down). I am (finally) realising that cash is also a good choice at the moment - why not at these rates! (I refer to what I said about George Gammon above which sealed it for me). I opened a Cash ISA recently with Moneybox. 5.09% with something like 0.98% bonus if you don't withdraw for a year. No withdrawal penalties if you withdraw up to 3 times a year (although you'd lose the 0.98% bonus). 

Edited January 2 by katyc

[SeverinDigsSovereigns]

1 minute ago, GoldDiggerDave said:

Gold is  nowhere near keeping up with inflation its moving but way off in my book.  
 

For me once interest rates got over 4% I’m living for free as the yield is more than my outgoings.  Not bragging or giving it the big one, just opening peoples eyes that Fiat is not as ugly and a dirty as some PM holders have convinced themselves it is. 

I will take that 5.25% and I can assure you it’s a net gain for me.   

 

A lot of very wishful thinking on pm forums like this, from people with absolutely zero understanding of economics

Fiat money worthless, pm all good, but meanwhile pm are all manipulated by the DS (so pm not so good after all)

Pm keep purchasing power all the time - no they don't. The Spanish Empire went broke by having too much of it, or at least that's one contributing factor of the empire's decline, and they talk about purchasing power of metals without the slightest mention of production of good

blah blah blah

The world is more than black and white, goodies and baddies, but even that is too complicated for some

 

[JohnA1]

9 minutes ago, SeverinDigsSovereigns said:

..

Pm keep purchasing power all the time - no they don't.

 

Hell no, not all the time, the fluctuations are significant, only on a long-term basis

With the current 'price' hanky-panky the definition of "long term" could be decades 😄

 

Adusted for real CPI, gold is currently almost 9x lower than where it was 1980. Silver25x.

When that spring is unloaded, it's gonna hurt

 

 

[HonestMoneyGoldSilver]

29 minutes ago, SeverinDigsSovereigns said:

The Spanish Empire went broke by having too much of it, or at least that's one contributing factor of the empire's decline, and they talk about purchasing power of metals without the slightest mention of production of good

You're referring to the "Price Revolution"

The Spanish crammed a continent's worth of gold and silver into what is a relatively small country. The gluttony of PMs relative to the goods and services on sale caused the price of metals to drop (and the cost of goods and services to increase)

The Spanish were one of the first nations to experience the "resource curse" like is currently happening in Venezuela or Nigeria. The primary focus of the Spanish Empire was extracting bullion and natural resources from their South America colonies at the expense of developing other industries. They controlled everything centrally via the Monarchy. That dynamic was a huge structural weakness in Spain's economy, weaknesses that became manifest by the war with the Dutch

Gold didn't have to be a liability for Spain just as oil doesn't have to be a liability for countries today. It seems the Qataris and Saudis have figured things out nicely while Iran, Venezuela, Nigeria and Iraq have been somewhat less prudent with their resources. There are parallels between Iran, Russia, Venezuela and Iraq with the Spanish Empire in that their main reasons for underperformance are not natural resources but rather political - catastrophic failures of internal governance and revolutions combined with picking fights with powerful nations

[ArgentSmith]

1 hour ago, GoldDiggerDave said:

Gold is  nowhere near keeping up with inflation its moving but way off in my book.  
 

For me once interest rates got over 4% I’m living for free as the yield is more than my outgoings.  Not bragging or giving it the big one, just opening peoples eyes that Fiat is not as ugly and a dirty as some PM holders have convinced themselves it is. 

I will take that 5.25% and I can assure you it’s a net gain for me.   

 

Not after its taxed mate, nominal yield is in a downwards death spiral if its being spent on outgoings

[SeverinDigsSovereigns]

24 minutes ago, HonestMoneyGoldSilver said:

You're referring to the "Price Revolution"

The Spanish crammed a continent's worth of gold and silver into what is a relatively small country. The gluttony of PMs relative to the goods and services on sale caused the price of metals to drop (and the cost of goods and services to increase)

The Spanish were one of the first nations to experience the "resource curse" like is currently happening in Venezuela or Nigeria. The primary focus of the Spanish Empire was extracting bullion and natural resources from their South America colonies at the expense of developing other industries. They controlled everything centrally via the Monarchy. That dynamic was a huge structural weakness in Spain's economy, weaknesses that became manifest by the war with the Dutch

Gold didn't have to be a liability for Spain just as oil doesn't have to be a liability for countries today. It seems the Qataris and Saudis have figured things out nicely while Iran, Venezuela, Nigeria and Iraq have been somewhat less prudent with their resources. There are parallels between Iran, Russia, Venezuela and Iraq with the Spanish Empire in that their main reasons for underperformance are not natural resources but rather political - catastrophic failures of internal governance and revolutions combined with picking fights with powerful nations

Not trying to argue against you mate

Gold and oil are different though. Oil is constantly consumed while gold was used in daily circulation and preserved. The total amount of gold doesn't change. Oil is never a liability for Iran, Russia or Venezuela, socialism is. And Russia is doing well with their oil and gas- it would be much worse for them if they didn't export all that to China and India.

There really isn't comparison between Spanish Empire and the likes of Iran. The mass import of gold and silver from the Americas drove inflation because there was an over supply of circulating currency. Oil is not a circulating currency, and having too much oil does the opposite of inflation, as in other Gulf countries. Venezuela's failure has everything to do with socialism and nothing to do with oil.

You spoke of sacrificing all other industries to extract resources. You are absolutely right, because that reduces supply of goods and hence drives up prices, as in my original post. However, if there is a healthy balance between industries, a strong consumption, and OK political atmosphere, fiat will do just as well.

Also, there is a difference now that gold standard is no more, as gold had become more speculative. Even when gold standard was still in place the purchasing power of gold varied from countries, and international exchange rates were largely arbitrary. It seemed that gold partially played the fiat role of today's paper money (e.g. 20 marks were officially values at 2/3 pounds)

All that said, it doesn't stop me buying quite as much as I can at the moment. I'm not Wonger and I buy gold as if I'm crazy. I just don't dream of becoming a billionaire from my stack. Some lunatics may be hoping for that (as in a free fall of fiat) but good luck with everything else.

Edit: I have no doubt in your intentions and my original post was certainly never directed at you. But it does seem to me that there is a degree of Chinese/Russian propaganda in some of the speeches floating around. People can have ulterior motives

Edited January 2 by SeverinDigsSovereigns

[Roy]

10 minutes ago, SeverinDigsSovereigns said:

Edit: I have no doubt in your intentions and my original post was certainly never directed at you. But it does seem to me that there is a degree of Chinese/Russian propaganda in some of the speeches floating around. People can have ulterior motives.

Thank you! 

I am not alone.

[SeverinDigsSovereigns]

16 minutes ago, Roy said:

Thank you! 

I am not alone.

America bad

Fed printing money

CIA blah blah blah

Then proceeds to the China seems to be doing well bit.

Don't forget they control the FX rates and their GDP is measured in CNY and converted to USD. If they ever allowed free exchange the dollar would actually go to the moon as people dump CNY. You can't carry much gold out of China unless you have some special licence, which means  you can't at all. See how that does to the international gold price before saying JPMorgan/COMEX/LBMA manipulating the market.

There could be quite a good deal of truth in whatever they say about western countries, because the best propaganda is where there is 95% truth and something they want you to believe, because people tend to buy the wholesale package, and that's where their little gems are hiding. Also good is the kind of propaganda that deliberately omit information while reporting 100% truth. It's easier to manipulate minds keeping things out than putting them in. Of course that is done in the western countries all the time (the likes of BBC, eww), but saying that western countries do that without China's honourable mention is such propaganda in action.

And there's the "them and us" bit, namely the govs doing all sorts of weird stuff hence undemocratic, and all people are innocent in that process. In most cases the weird policies are more democratic than many of us would like to believe. You'll just have to look at the other part of the electorate...

Edited January 2 by SeverinDigsSovereigns

[JohnA1]

China was welding people inside their flats, using convid as the excuse

As for Russia, well...hello Siberia if you disagree

[Bigmarc]

1 hour ago, SeverinDigsSovereigns said:

A lot of very wishful thinking on pm forums like this, from people with absolutely zero understanding of economics

Fiat money worthless, pm all good, but meanwhile pm are all manipulated by the DS (so pm not so good after all)

Pm keep purchasing power all the time - no they don't. The Spanish Empire went broke by having too much of it, or at least that's one contributing factor of the empire's decline, and they talk about purchasing power of metals without the slightest mention of production of good

blah blah blah

The world is more than black and white, goodies and baddies, but even that is too complicated for some

 

Great post. 

This time it's different tho..... Probably not.

[HonestMoneyGoldSilver]

4 minutes ago, SeverinDigsSovereigns said:

Not trying to argue against you mate

Gold and oil are different though. Oil is constantly consumed while gold was used in daily circulation and preserved. The total amount of gold doesn't change. Oil is never a liability for Iran, Russia or Venezuela, socialism is. And Russia is doing well with their oil and gas- it would be much worse for them if they didn't export all that to China and India.

There really isn't comparison between Spanish Empire and the likes of Iran. The mass import of gold and silver from the Americas drove inflation because there was an over supply of circulating currency. Oil is not a circulating currency, and having too much oil does the opposite of inflation, as in other Gulf countries. Venezuela's failure has everything to do with socialism and nothing to do with oil.

You spoke of sacrificing all other industries to extract resources. You are absolutely right, because that reduces supply of goods and hence drives up prices, as in my original post. However, if there is a healthy balance between industries, a strong consumption, and OK political atmosphere, fiat will do just as well.

Also, there is a difference now that gold standard is no more, as gold had become more speculative. Even when gold standard was still in place the purchasing power of gold varied from countries, and international exchange rates were largely arbitrary. It seemed that gold partially played the fiat role of today's paper money (e.g. 20 marks were officially values at 2/3 pounds)

All that said, it doesn't stop me buying quite as much as I can at the moment. I'm not Wonger and I buy gold as if I'm crazy. I just don't dream of becoming a billionaire from my stack. Some lunatics may be hoping for that (as in a free fall of fiat) but good luck with everything else.

No arguments only a discussion of history and economics! 

Of course oil and gold are different commodities with different use cases but they are or were both the primary global commercial resource. The similarity is that relying solely on one asset regardless of what that asset is, is a strategy that inevitably leads to economic distress for both countries and individuals. 

I would somewhat disagree about Russia. The Russians have the world's largest natural resource industry but that's literally all they have. Their current technological peak is roughly equivalent to an iPhone 2 - without imports the Russians couldn't manufacture anything that could be sold on global markets. If we compare that to the Soviet Union, whose technology still underpins much of modern Russia, the Soviets were actually technologically advanced relative to their peers. The Soviets famously put the first satellite in orbit and the first man in space. They also beat the mighty British to developing nuclear weapons. The Soviets did steal info from the Manhattan Project that was denied to the British by the Americans but they still had to make it work. The Soviets had superb scientists. I found this odd at the time but a lot of the stuff I was taught at university came directly from Russian resources as technically the material from the UK/USA about nuclear weapons and nuclear power plants is classified. I found that interesting

A similar scenario of Russia being first technologically in anything in the 21st Century is unthinkable yet we might consider the modern Russian system to be superior to the Soviet system. The difference is the Soviet Union had a vast and varied industrial base whereas Russia is a one trick pony. Russia is completely reliant on exporting natural resources and recycling Soviet technology. My point is any nation like Venezuela, Russia, Iran, etc, that relies almost exclusively on a single industry is going to have problems. The Qataris and Saudis binge buy different assets globally and attempt to diversify their economies. The Japanese mastered that by owning significant interests in companies and government debt all over the western world. They buy 5% of our government bonds last I checked and invest quite a lot in the UK

With regards specific political systems like Socialism/Communism, the Soviet Union gives us an interesting case study. The CIA estimated the Soviet economy was roughly equivalent to the USA in the 70s when the USA was at her relative peak. The Saudis and Qataris are a bunch of nutters yet their economy still does fine, especially the Qataris who are the richest nation on earth per capita. People talk about Singapore as being a business paradise yet they operate under a One-Party System

I agree with most of your sentiments but as always with history and economics there is nuance that can be interpreted differently. Most historians would disagree on certain things or have slightly different points of view. I agree completely with your last sentence. I don't buy metals to get rich but to prevent myself from getting poor. You're also 100% on the money IMHO about gold or crypto mooning. If gold goes to £1,000,000 or BTC goes to £1,000,000 that means fiat and our financial-industrial system has collapsed. Nobody wins in that scenario

[ArgentSmith]

Buy Bitcoin if you want to beat inflation and live off returns.

[SeverinDigsSovereigns]

5 minutes ago, JohnA1 said:

China was welding people inside their flats, using convid as the excuse

 

So did we. And our guy responsible was a member of the British Communist Party.

Much of our social illness can be blamed on communism. However, we only have ourselves to blame for communism. When all countries tried to eradicate that parasitic Karl Marx we granted him asylum, so he could go on vilifying our country in his poisonous mantras.

[HonestMoneyGoldSilver]

Just btw I am not a communist 😂 it's just interesting how different systems can work like with the Soviets or the CCP

I'm all about the free speech, free markets, Common Law and Christian values, as unpopular as that may be

[SeverinDigsSovereigns]

22 minutes ago, HonestMoneyGoldSilver said:

I would somewhat disagree about Russia. The Russians have the world's largest natural resource industry but that's literally all they have. Their current technological peak is roughly equivalent to an iPhone 2 - without imports the Russians couldn't manufacture anything that could be sold on global markets. If we compare that to the Soviet Union, whose technology still underpins much of modern Russia, the Soviets were actually technologically advanced relative to their peers. The Soviets famously put the first satellite in orbit and the first man in space. They also beat the mighty British to developing nuclear weapons. The Soviets did steal info from the Manhattan Project that was denied to the British by the Americans but they still had to make it work. The Soviets had superb scientists. I found this odd at the time but a lot of the stuff I was taught at university came directly from Russian resources as technically the material from the UK/USA about nuclear weapons and nuclear power plants is classified. I found that interesting

A similar scenario of Russia being first technologically in anything in the 21st Century is unthinkable yet we might consider the modern Russian system to be superior to the Soviet system. The difference is the Soviet Union had a vast and varied industrial base whereas Russia is a one trick pony. Russia is completely reliant on exporting natural resources and recycling Soviet technology. My point is any nation like Venezuela, Russia, Iran, etc, that relies almost exclusively on a single industry is going to have problems. The Qataris and Saudis binge buy different assets globally and attempt to diversify their economies. The Japanese mastered that by owning significant interests in companies and government debt all over the western world. They buy 5% of our government bonds last I checked and invest quite a lot in the UK

I'd say the Russians are a great people, they have always achieved highly in arts and science. Some of the best mathematicians in the world are Russian.

Collectivist governments, like the USSR, tend to be more efficient in achieving goals like sending satelites and rockets, but at the cost of their people. Modern Russia is crippled by corrupt officials. Yes, officials were very corrupt in the USSR times, but they enjoyed much privileges at home so that all went back in the country eventually. Today we'd let them spend their billions in our country, which I'd say is a very clever move if we ignore the ethical questions.

I can see Qatar and UAE etc trying very hard at diversifying from oil. And you mentioned Japan, which indeed owns a lot of assets abroad, but Japan is a resource-poor country and largely relies on export of industrial products.

Singapore is rich because of the strategic importance she inherited form the British Empire, as a trade post from east to west. They still are because there's currently lots of Chinese money in Singapore seeking refuge.

Communism is not just a way of government, but how the everyman thinks. We suffered much communism post-war, and that's partially why we (and Europe as a whole) lost to Russia (and indeed USA) in the technology rivalry. We were full of Micks and Robos who would seize every chance to feather their own nests at the cost of everyone else. Social justice, economic equality, welfarism, you name it. This is also why I said I didn't believe the "them and us" take on governments, because governments are elected by the people, and the civil servants were the people themselves.

Edited January 2 by SeverinDigsSovereigns

[SeverinDigsSovereigns]

18 minutes ago, HonestMoneyGoldSilver said:

Just btw I am not a communist 😂 it's just interesting how different systems can work like with the Soviets or the CCP

I'm all about the free speech, free markets, Common Law and Christian values, as unpopular as that may be

Nah of course you are not mate. A real commie would flag every gold transaction and call it AML

[RDHC]

21 minutes ago, HonestMoneyGoldSilver said:

The CIA estimated the Soviet economy was roughly equivalent to the USA in the 70s when the USA was at her relative peak.

That simply shows how little the CIA knew about economics. More informed estimates since then put the size of the late Soviet economy at about 1/5 of the equivalent American one. This was tacitly acknowledged by Gorbachev, an intelligent man, who realised that it would be impossible to match the colossal expense of Reagan's projected 'Star Wars' missile shield, so he began the process of 'perestroika', which quite quickly led to the unravelling of the USSR or the 'evil empire' as Reagan accurately termed it.