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Madcrash

Uk Property Relative To Price Of Gold

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As for UK property, broadly speaking, I’m bullish. In many parts of the UK it is, in my view, cheap. There is a strong case for buying in the Midlands, in the North or the West

:lol::lol::lol::lol::lol:

Come on guys, let him have it.

http://www.rightmove.co.uk/property-for-sale/property-57805946.html

http://www.rightmove.co.uk/property-for-sale/property-39425550.html

http://www.rightmove.co.uk/property-for-sale/property-52874429.html

http://www.rightmove.co.uk/property-for-sale/property-40026285.html

Edited by Eddie_George

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To give an example of a cyclic investment strategy, consider the average house prices measured in ounces of gold in the US from 1960 to 2005 (an ounce of gold is the standard size of a gold coin like the American Eagle, Maple Leaf, or the Krugerrand). This period covers a full property/goldcycle, as the chart (click here) nicely demonstrates. To make things easier, we assume the average house measured in ounces of gold was: 550oz in 1965; 750oz in 1970; 100oz in 1980; 750oz in 2000; and finally 500oz in 2005. Say, you had 550oz of gold ($19,525 at $35.50/oz) in 1960, and bought one house with it. In 1975 you would have sold the house for 750oz of gold. In 1980, five years later, you would have bought 7.5 houses for this gold (100oz per house). In 2000, you would have sold the 7.5 houses for 7.5x750oz = 5,625oz of gold. This gold would be worth around $3,870,000 (at $688/oz) today (2007). Not only that this is an average return per year of 13.42%, over the whole period of the investment there was almost no counterparty or credit risk present.

Edited by Silverfinger

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~$36 1970 gold price (http://www.nma.org/pdf/gold/his_gold_prices.pdf)

~$6186 1970 avg wage (https://www.ssa.gov/oact/cola/AWI.html)

~$1224 2010 gold price (http://www.nma.org/pdf/gold/his_gold_prices.pdf)

~$41673 2010 avg wage (https://www.ssa.gov/oact/cola/AWI.html)

joe public could buy (if s/he could get it) ~171oz for his years labor vs ~34oz as of 2010 therefore it's expensive today

I picked 2010 because it was in both charts, didn't include the top in 2011 and is close to the current price of yellow and 1970 before they the obvious changes in 71.

I don't know if those information tables for either are valid.

I guess it's fair then to compare one over priced asset class with another :blink:

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Interesting comparison, however, I think with the gold pool etc. gold was extremely undervalued in 1970, which is why it exploded upwards shortly afterwards. Maybe you should go a little farther back in time. Also, think about the earnings concentration that has happened since the 1970s. Can you pull up what a CEO earns vs. a normal worker then and today?

Edited by Silverfinger

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giggler, you also cannot just ignore the biggest financial crisis this globe has ever seen.

Edited by Silverfinger

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What's wrong with all the other gold threads including the pinned gold thread on the main forum and the main gold thread in the gold sub forum?

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How beautiful is the world now that we know that such hope can exist in it.

Good luck to them all, I think that they will need it, especially the "barn conversion" in Birmingham

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Maybe we’ve already peaked at 275 ounces. We’ll see. Maybe the coming political upheaval of the next three years will take us towards 100. (Or maybe we go back to the 2004 heights of 720 ounces. Nobody knows.)

Maybe... maybe... maybe...

This guy's about as much use as one of the BoE's fan charts.

And how is anyone supposed to quantify 'the coming political upheaval of the next three years'?

Absolute garbage.

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What's wrong with all the other gold threads including the pinned gold thread on the main forum and the main gold thread in the gold sub forum?

Nothing's wrong, eh? But the main gold thread should be in the main forum, I suppose.

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hmmm the laws of statistics in economics are really being tested in this one...

a comparison of the function of two totally independent variables only linked by currency compared = nonsense 2

unless..... those manipulating the housing market buy their houses with gold? Or those manipulating gold price are selling their houses to buy gold?

these are the only two tenuous inferences I can take home from reading that article...would have been more productive cutting my toe nails

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hmmm the laws of statistics in economics are really being tested in this one...

a comparison of the function of two totally independent variables only linked by currency compared = nonsense 2

unless..... those manipulating the housing market buy their houses with gold? Or those manipulating gold price are selling their houses to buy gold?

these are the only two tenuous inferences I can take home from reading that article...would have been more productive cutting my toe nails

(1) House prices in gold show a cycle.

(2) Don't be in the wrong asset during the wrong part of the cycle.

(3) House prices have been heading down since 2004, but still are at over 250 ounces, while the last two bottoms were at ca. 56 ounces, as the good old Approximity log chart shows much better than Nick's chart (see below and note the HUGE bull trap).

(4) Better be in gold now, not in houses.

KTKPDV.png

Edited by Silverfinger

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Thats a lot on conclusions. As a reductionist, if I put a 2nd order polynomial through that chart then we're looking at 500ozs sometime after 2018- meaning either property prices are going through the roof, or gold is valued less- simple technical analysis. I see no cycle, I see a seismograph trace.

However I won't do that, as that chart is subject to vast fundamental influence, beyond analysis, that chart shows me goobledegook.

C'mon...the main reason we are in this mess is because the wrong people have massaged, falsely interpreted, smoothed, skewed and basically fabricated all sorts of economic data to favour their own interests or manipulate a market or sector. We can't use their medicine against them. We need hard facts to achieve cohesion between us...to know what is what, true or false.

Economics is a joke subject - the laws have been twisted out of all recognition...coming out of this mess, they are due for correction as much as the markets and their protagonists incarcerated.

I agree with (4)...and I have seen inverse relationships with cyclical (equity) market decline and gold price increase, that seems quite significant.

ps. not having a dig at you, just ranting in general! Friday night, stuck in...again.

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