Friday, 3 October 2008

SOME MUSINGS ON THE CURRENT CRISIS

The news is full of doom and gloom – with banks having to be rescued and shares plunging. However this week I’ve attended two interesting auctions and the results from these do show that some people certainly have money to invest. On Tuesday in Colchester four hand written letters from the late Diana, Princess of Wales, to her childhood nanny sold for nearly £25,000 and a three page letter written in 1937 by the Duchess of Windsor sold for over £13,000.

On Wednesday I went to the Spink auction in central London where a banknote sold for over £78,000. In a hushed room the bidding increased firstly in one thousand pound increments then in two thousand pound increments. The only other existing similar note had sold years ago for £8,000. Some other banknotes in the auction went for nearly £45,000, for £35,000 and £27,000 to mention just three more examples (all these prices include buyer’s premium and VAT). Several expensive ones sold to a gentleman sitting directly behind me which was a little disconcerting as the auctioneer appeared to be looking directly at me as he took the bids. So I was sitting there wondering whether I had blinked or rubbed my nose!

Of equal interest (well to me at least, as Mrs Troy yawns) was the price realised on Tuesday in Colchester for some run-of-the-mill gold Sovereigns. These had been estimated at £92 - £115 (including buyer’s premium). As you probably know (?) each sovereign contains 0.2354 troy ounces of gold – so their intrinsic value at that date was about £115. They sold for an average of £156 with the cheapest at £138! Dealers this week were offering £110 to buy sovereigns so several bidders were happy to pay well over the odds for gold. (If you do want to buy gold for a sensible price and which is safely kept in a secure vault I recommend the BullionVault.com website).

Finally, I read today that 100oz pure silver (99.9%) bars are selling on eBay (US) for in excess of $1,500 whilst the “market” price for silver is under $12 an ounce. More than a 25% premium is being paid for just a lump of the metal (no craftwork or aesthetic content).

So people in these times of crisis are putting their wealth into alternative investments and real money (gold and silver – not government issued promises) whilst others struggle to pay their utility bills or to stave off repossession of their homes – it’s a strange old world! What do you think?

13 comments:

John Woodman said...

The greater fool concept: price doesn't matter as long as you find a greater fool to sell it to.

When general confidence returns, those premiums will mostly disappear - especially as you can invest in gold or silver through stock markets with little or no premium. And of course the prices will probably fall.

You are right that there will be two broad groups of people during the "crisis"; those with cash and those with too much debt. The smart members of the former group will keep their cash.

DJ Kirkby said...

Hi,
If you are interested in coins, you might be interested in Hedgewizzards blog as he did acouple of posts about finding some. Hey what is with the new, very scary gimp mask profile pic?

East Anglian Troy said...

Hi DJ - regarding the new profile picture : I noticed that if you didn't have your own photo then sometimes a grey silhouette was substituted. I thought if any silhouette was going to represent me then it ought to be my own. So now I'm anonymous and have my own photo on display! Mrs Troy said nobody would notice it - so full marks for you for spotting it within hours of me putting it on.

Can Bass 1 said...

'If you do want to buy gold at a sensible price...' On a singer's wage? Really, Mr Troy!

Trixie said...

Just goes to show, that no matter how bad the 'credit crunch' gets, there are still a lot of people out there with money to spend!

I wonder if I pool what little gold I have if I can get a couple of hundred?

Nahhh. I'd be better off selling myself. ;p

DJ Kirkby said...

Thanks for the explanation :)

Elaine said...

There are two types of people in this world: those with money and those without. And the ones with money have the resources to make even more, while the ones without can't make jack shit. (S'cuse the language.)

On a completely different note, I've never been to an auction before but it's on my 'to do' list. It sounds like fun!

East Anglian Troy said...

Thanks for all your comments.

Trixie - I'm sure you're worth your weight in gold.

Can Bass - "singer's wages"? You mean like Charlotte Church, Michael Jackson or Paul Potts (the famous Cambodian opera singer)?

Elaine - auctions can be fun but can also be most frustrating when people with deeper pockets outbid you. Try www.the-saleroom.com to find out what auctions are going on. Look forward to hearing on your blog if you do go to one.

Brit' Gal Sarah said...

Thanks for coming out and commenting on my blog, as it enabled me to spend a very pleasant 30 mins reading yours.

Can't blame you for retiring to EA at all. I was a Berlei bra sales rep for EA in my early twenties and fell in love with the place, especially Suffolk.

Very enjoyable read, I will be back for regular entertainment. BTW if it's not too rude to ask, where in Herts? That's where I grew up and lived - Ricky, Chorleywood, Chenies, Watford.

East Anglian Troy said...

Hi Sarah, I'm pleased you've enjoyed my various ramblings. In Hertfordshire I've lived in Ware, Hertford and Cheshunt. Hertford is a nice compact old town and Ware has a nice village atmosphere and nice riverside walks. Cheshunt was convenient for commuting into the City. All these though are some distance from your part of Herts.
Hope you like my various photos, especially the Suffolk ones.

Deb said...

Hi ~ I was out wandering around in Blogland and thought I would stop in for a visit. Interesting place you have created here. I find the current crisis unsettling and confusing. I have been to a few auctions here in the States but most of the items were from someone's attic. I get excited easily so I have to sit on my hands sometimes so I don't end up bringing home a box of broken dishes. Now I am off to check out Mrs. Troy's blog - hope she finds time to write in between all of the ironing! Take care.

Crystal Jigsaw said...

Sounds good to me. I'm off to have a look around this big old house of treasures.

CJ xx

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