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House Price Crash Forum


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Everything posted by doahh

  1. Ah, the voice of reason watering on the parade! Thanks for the reality check. I was just about to comment that the dip is almost comparable to the 2007-08 dip but we'll have to wait until the rest of the data is in now.
  2. Wow, a great first post! It is striking that sales volumes have halved country wide, but also that prices have yet to go into decline. It looks like you have caught a market peak; first affecting volume which should then filter into prices. Very encouraging!
  3. Could you explain to a noob why things could grind to a halt please. I thought that as hash power decreases, the difficulty decreases in order to continue to allow block mining to happen every X minutes. If the block rate remains the same then why could there be transaction problems, what am I missing?
  4. I have just been listening to a Jim Rickard's interview from May 2017. He thinks that the idea of massive money printing by the central banks may be unpalatable given that the Fed has a balance sheet leverage of 113-1. However, he mentions that the IMF's Special Drawing Rights only has a leverage of 3-1. When the inflation/reflation cycle starts it could be the IMF that is the issuer of last resort. He therefore suggests that the IMF could be the cause of the reflation/inflation rather than central banks. I would guess that the IMF would buy bonds directly from companies, but as only big companies can issue bonds the smaller fish would end up fried as they can't extend credit lines via the banks. However, I have no knowledge of how that mechanism works so I may well be wrong.
  5. Thanks for that information. It had crossed my mind that they may be stable enough but I didn't look into it any deeper.
  6. I bought some miners around 2012 (Pretium, Helio Resource, Great Panther and Granada) and they promptly got hammered, I have been wary of my skills to pick winners since then. That said, all of the miners that I have looked at since then have taken a beating including the GDX which has lost ~40%. Timing is everything, Medusa Mining did a 10 bagger between 2008 and 2011 before loosing it all by mid-2014. Live 'n learn, maybe in the next cycle I'll do better
  7. I was really trying to get a conversation going as to whether or not the Chinese are setting up a gold backed currency. Their system while not a gold backed currency, as their is no peg between the Yuan and gold, is also not barter. Barter does not use a means of exchange and the Yuan is serving that purpose in these transactions. I found this interesting snippet in a ZH article today: So, is the Chinese accumulation of gold simply following in the footsteps of a rapidly growing economy or are they moving towards gold-backing; why do they want all that gold they have accumulated? I think one should be careful in thinking that they are trying to gold-back their currency as it seems there are other valid reasons such as hedging economic downturn and in China's case, destroying the petro-dollar.
  8. How do you think the move of the Suadis, Russia and Venezuela signing contracts with the Chinese to convert oil almost directly into gold fits into this scenario? It seems that a reasonable argument could be made to say that the Chinese are setting up a gold backed currency. They may not be quite there yet, but am I missing something in thinking that they are setting up a gold backed currency?
  9. Great posts Prufeshanul, well rounded and thought out. I will need to ruminate!
  10. That is a good answer, and is a similar stance to Bill Still in his film The Secret of Oz. I had always assumed that the rate of gold mining was enough to fill the need for the expansion of the money supply, baring the rather large over-expansion of credit that we have recently engaged in. As I say, this is an assumption rather than a researched argument. You mention that you think gold is money, would you have an answer to Steve Keen's argument? If I am wrong about the rate of mining being sufficient to grow the money supply, then Steve Keen's argument is quite persuasive.
  11. To be an ad hominem attack I would need to be attempting to discredit you in order to discredit your argument. You haven't provided an argument and therefore it can not be an ad hominen. You have simply made a statement that you think gold is an asset rather than money without providing an argument as to why. You are welcome to your opinion but your only defence seems to be to ask more questions rather than to take a reasoned stance on why gold is not money. I have not stated that money needs to be physical, I have stared that I think that gold is money. You seem to be attacking a strawman, please prove otherwise. I get the impression that you really want to talk about BitCoin, there's a thread for that .
  12. It seems to me that you are engaging in a logical fallacy, the name of which escapes me. You make a one sentence answer that requires me to have a plethora of knowledge that is unreasonable. Why don't you state the compound that you suggest AND list the reasons why it makes a good form of money AND then state why that means gold is not money? You have also singularly failed to answer any question that I have put to you, instead moving the goalpost to ask another question. This is a poor format to use in a discussion and simply makes you look like a troll.
  13. Thanks Errol, a very succinct post that adds some extra weight to the argument, I will need to remember that for next time. One additional thing is that gold is also one of the densest elements on earth. Therefore it is very hard to forge as a simple density test will detect it, an accurate scale is really all that is needed. The only elements with a greater density are: 19.32 g/cc Gold Au 79 19.35 g/cc Tungsten W 74 19.84 g/cc Plutonium Pu 94 20.2 g/cc Neptunium Np 93 21.04 g/cc Rhenium Re 75 21.45 g/cc Platinum Pt 78 22.4 g/cc Iridium Ir 77 22.6 g/cc Osmium Os 76 Tungsten is very hard to mill and so getting the necessary detailing to make a fake coin is nearly impossible. Hence you can only really use Tungsten as a core and must have a gold outer. Platinum has almost the same price and probably the only reason it is not used as money is that is much rarer than gold, as Errol previously mentioned. Plutonium, Neptunium, Rhenium, Iridium and Osmium are radioactive.
  14. Are you sure that you are not confusing money with currency? I would say that money (which for me gold is) can always be currency, but that currency is not always money. Hence when we came off the gold standard it was the currencies that ceased to be money whereas gold continued to be money; I think it is just common parlance that means currency is often called money. By removing the gold backing of GBP we also removed the scarcity of GBP. This in part is why we have such a massive expansion of credit, and hence high house prices; there is no physical impediment to that expansion. The market cap of Bitcoin is $95 billion. The market cap of gold is $7 trillion. I think gold has 73,684 times more fans. Bitcoin has many good properties that could make it money, but I think it needs wider acceptance and more stability. At the moment it is to new and untested to reliably act as money, even if it is a great speculative investment.
  15. I think you may have missed that part of previous response, maybe as I was editing when you replied. Indium does not have gold's several thousand year history of usage as money.
  16. A bunch of shiny pebbles are not scarce, hence they are not used as money.
  17. You are asserting that the reason that gold is not money is because we live in the 21st century, but what is it about the 21st century that makes gold no longer function as money? The gold standard in the UK ended 86 years ago in 1931, not 1000's of years ago. I think it would be difficult for a replacement to gain the necessary confidence in such a short period of time to be classed as a stable substitute, and you didn't mention what you think that replacement is. You state that gold is not money because it is an asset, but why do you think that? Ultimately it would be up to the market to decide what it is, whether that be money, an asset or a commodity; maybe time will tell. For something to function well as money it needs to be at least portable, divisible, non-perishable, generally accepted, scarce and difficult to forge. Gold is still all of those things, hence I would say that it a good form of money.
  18. Thousands of years of use as such would seem to indicate that it certainly used to be. Could you please explain what you think has changed, and if it is not money then what could be considered money in its place?
  19. Surely most people who enter will just want to sell it. I wouldn't want to move to London, even if it is in a quiet location. Why not just sell it to someone who actually wants it ... oh, that may require dropping the price. I would have to ask why they are doing this. It is surely more work than selling it via the normal channels. They should pull the other one as it has bells on it. They want £5m for a house they can't sell for £3.5m. There will be costs of running the game but something isn't right here. They are either very greedy or desperate.
  20. Always good to be prepared and have an explanation as to why a dip may occur. For those to lazy to click through, here is a summary: --- The $USD has been forming an inverse head-and-shoulders pattern indicating a change the upside, with a target of 97. Maund then thinks this will breakdown and complete the dollars fall from grace. The $USD's move up will be bad for pm's, but once it breaks down then pm's will move to the upside. He also thinks that $GOLD has been forming an inverse head-and-shoulders since mid-2013 which is further evidence of golds next major breakout. --- His charts don't extend very far to the right but it does look like this may take some time to complete. The $USD top would not seem to complete before the end of the year, then the fall back to current levels will probably take us to early/mid 2018. If he is right then it looks like gold will start its uptrend at the start of next year but take a while to recover the loses before breaking above its current $1300. I don't bother keeping much hope on tap at the moment as the last few years have been a long wait for gold holders. The only good news is that a solid consolidation has formed since August 2011 high of $1900, with a general price agreement of between $1100-1300 from mid-2013 onwards.
  21. I made this table the other day to see how much gold has risen in GBP: Gold did very well from 2005 until 2011, but since then over the next 6 years it has dipped and only risen to recover its pre-boom value. You have almost certainly seen the predictions of $5K-$10K at some time in the future, unfortunately no-one can know when or if that will be. Personally, I think it broke out of its long term downward trend around June this year but hasn't really shown any signs of strength yet. I would expect to see the same growth rates again when the next crisis hits. I guess that means that I think you haven't missed the boat and it looks like a reasonable time to get in as long as you don't need the money for at least the next 5 years. Trying to time an absolute bottom/top is very difficult. Many will average in over time, so buy a little each month so that they can smooth out the price changes. DB's idea relies on both deflation and money being seen as a commodity, as ThePrufeshanul has pointed out I think it is more likely that gold is seen as money. If gold is money then it will likely go up in price in a deflation as people run to a safe-haven. You pay's your money and take's your chances. There are always two sides to an argument. One of the great reasons to get into gold for people who aim to buy a house is that the price of housing relative to the price of gold falls dramatically during a recession. Those who can get hold of 50-75 ounces should be able to buy an average house. It also looks like the next recession is going to be so bad that it will be worse than the 1980's dip. Hence 50 ounces may be enough. It may be that gold peaks at a different time to the bottom in house prices, but if timing the sale of gold correctly, it should leave one in a good position to purchase a house when they also bottom. It may also be worth noting that the peak in base rate correlated with the dip in the ratio of gold to housing in the 80's. It could be that when we reach peak base rate, is the time to sell gold. Just my opinion of course, I wouldn't trust it!
  22. An interesting article that got me thinking. The US will find it harder to fund themselves and so be forced to issue treasuries with an increased interest rate. As companies that produce non-essential items begin to struggle their stock price will decrease, but companies that produce essentials (food, energy, loo roll etc; the so called defensive stocks) should hold a fairly stable share price. This is nothing that DB has not stated on the excellent Deflationary Collapse thread, but I think I am now beginning to understand both his logic and some of his terminology. What I can't work out is what it means for the price of gold. On the surface it seems that it should at least put a floor on price as there is more demand in order to use it as means of exchange, and it would seem the price should in fact increase. However: Will deflation be limited to the US? Probably not as central bank tend to co-ordinate their interest rate rises, collapsing the demand for credit which this is deflationary. Thought the US will probably have it worse as it also loses the petro-dollar. If deflation is global, then won't oil demand also decrease globally as companies begin to produce less? Decreased demand for oil will put a cap on the potential of gold to rise as it is not in such great demand for use as a means of exchange. The question then becomes will the increase in demand as a means of exchange beat the collapse in demand for oil. Any thoughts?
  23. They jumped straight to middle age and forgot to have any fun. I hope they don't have any kids or their plans may go jump off a pier without them.
  24. The letter that came saying she had to repay also stated that they would take the debt from future payments of HB, hence she didn't have to fight at all as it was all pre-arranged before she heard about it. So far, there has been no suggestion of prosecution. I don't think there is a mechanism to stop payments for life so that wouldn't be possible, just something on your wish list. That said I think she is extremely lucky. About £14 per week IIRC.
  25. An ex-gf of mine just had her 18 year old go off to university. This triggered a re-assessment of her benefits and a backdating check to see if she was overpaid. She hates filling in forms and so had asked her accountant to fill in the accounts section of her housing benefit form for her. He didn't declare the PAYE income and she just handed the form in without checking. She now has an £11,500 debt to repay for 3 years of undeclared PAYE income. She has lost her working and child tax credits (was doing 16 hours previously but now needs to be doing 30 hours), child benefit, maintenance from daughters father and has also had her housing and council tax benefits reduced. Luckily she is able to repay the debt through reduced HB payments at a rate of ~£15 per week. It should only take 15 years to clear. I think she is lucky not to be prosecuted for fraud. A perfect example of a tax-credits-sad-face!
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