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Bruce Banner

Oil Is Like Land......

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Not really comparable; £10,000,000 invested in oil will give you a return once, when you sell it. The same investment in land will give your issue an income ad infinitum. That's why some families in the UK have been wealthy for hundreds of years. All due to the way their ancestors invested/stole/were gifted land.

Of course, if the land in question has oil underneath it,....

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Not really comparable; £10,000,000 invested in oil will give you a return once, when you sell it. The same investment in land will give your issue an income ad infinitum. That's why some families in the UK have been wealthy for hundreds of years. All due to the way their ancestors invested/stole/were gifted land.

Of course, if the land in question has oil underneath it,....

What about £10,000,000 of borrowed money invested in land at the top of the market?

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What about £10,000,000 of borrowed money invested in land at the top of the market?

There is no such thing with land on the timescales I'm talking about. And certainly not with FRB. But even if we did away with a money system as we know it, there will still be a need for land for food and shelter.

I don't see any such longevity for oil. It's not completely bonkers to believe that this current turmoil is the start of a long term decline in demand and production.

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Building a 50 storey sky scraper will create lots of land, do this in London where land is scarce and it's happy days.

Doesn't create land, just makes better use of it. The same can be said about land reclaimed from the sea, it doesn't increase the surface area of the earth, it just improves it.

Land is similar to oil, in that neither could be said to belong to anyone except that the government makes it so. That's why the government sells oil licenses - you want to use a natural resource, then you have to pay for it. They don't sell land licenses because land is magical, or something.

Of course, in undemocratic countries such as Saudi Arabia, the government has no legitimate claim to own the oil either.

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Agricultural land at about £10,000 per acre has been massively inflated because of the low interest rates, high cereal prices a few years ago and of course EU subsidy money. The realistic value now based on what it can produce is more like £3,000 acre. I wonder how long it will take to drop to that level, or if it ever will.

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Good point. Land is much easier to create than oil.

Perhaps...there is the old syn fuel and tropsch fisher.

Oil at $28 a barrel...definetly not making that any more. But oil or coal derived oil substitutes at $80 a barrel. Centuries of that left.

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Agricultural land at about £10,000 per acre has been massively inflated because of the low interest rates, high cereal prices a few years ago and of course EU subsidy money. The realistic value now based on what it can produce is more like £3,000 acre. I wonder how long it will take to drop to that level, or if it ever will.

Probably not whilst agricultural land enjoys such favourable IHT treatment.

Take that away, and the EU area payments and we might start to find what the land is really worth.

It might even make more sense to build houses on some of it, especially the marginal stuff on the edge of towns and villages. (I know, I know, far too radical...)

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Agricultural land at about £10,000 per acre has been massively inflated because of the low interest rates, high cereal prices a few years ago and of course EU subsidy money. The realistic value now based on what it can produce is more like £3,000 acre. I wonder how long it will take to drop to that level, or if it ever will.

My neighbour recently turned down a £20K/acre from my other neighbour for a ~20 acre field.

The field owner does seed trials, generates ~£30K working income from that field so no point selling it although he is well into his 60's by now. The buyer-to-be runs a smallholding that is profitable but I suspect this is only because he houses his Eastern European workers on site. I don't suppose much other taxes/NI are being paid. (I know the caravans are not registered for council tax). All the other local smallholdings went bust years ago, the numbers dont add up when you have UK workers and taxes to pay.

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I am making this point as well. I don't think, 18 months ago anyone would have seriously expected a crash in the oil price, it was just one of those things that couldn't happen, people were so used to forever rising prices, think of how much of the Scottish independence debate hinged around the oil revenues.

Also I think utility value of a barrel of oil is higher than a terraced cr*p-hole in Bolton!

So, I am very cautiously saying 2016 is crash year! oil price smashed, Chinese stock market down, ftse down, no where to go on interest rates and new BTL tax regime. If it doesn't happen this year, well........

Edited by pokercola

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I am making this point as well. I don't think, 18 months ago anyone would have seriously expected a crash in the oil price, it was just one of those things that couldn't happen, people were so used to forever rising prices, think of how much of the Scottish independence debate hinged around the oil revenues.

Also I think utility value of a barrel of oil is higher than a terraced cr*p-hole in Bolton!

So, I am very cautiously saying 2016 is crash year! oil price smashed, Chinese stock market down, ftse down, no where to go on interest rates and new BTL tax regime. If it doesn't happen this year, well........

Stocks are crashing! Take your money out and put it in property it's safer! Etc.

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