House Prices Beat Gold

[Compounded]

If I had bought £4k`s worth of Gold in 1970 ( at what price was it then ? ) what would my £4k`s Gold be worth today.

As a rough figure 100k, it would have made virtually all that gain by 1980 and have been worth considerably less after 1980 until quite recently.

The lesson is hold gold in times of financial turmoil, shares are much better most of the time.

I think the prospect of pending financial turmoil is much easier to call now than in 1970 we have

1. Banking crisis due to credit bubble bursting

2. Demographics

3. Peak Oil.

4. USA debt is so large it can never be repaid.

5. Collapsing Dollar - the worlds reserve currency.

Edited March 4, 2008 by Compounded

[Without_a_Paddle]

Stocks of course cane every other investment over the long term. Surprised there's anyone here ignorant to that fact, even the goldbugs and black ___day nutters must realise this.

But on an individual basis (keeping things realistic, i.e. young person with potential 5% house deposit to invest) property has been the better investment in recent decades for the reasons I gave earlier.

This assumes the alternative is to rent long term and invest the deposit in stocks.

(Note: it helps to choose stocks that go UP. Not everyone manages this )

Edited March 4, 2008 by Without_a_Paddle

[Impartial]

If I had bought £4k`s worth of Gold in 1970 ( at what price was it then ? ) what would my £4k`s Gold be worth today.

that's just silly, gold in a world fiat economy is not a steady growing investment, it is to be bought 'near' the beginning of a secular bull and sold at the end. Only fools hold over the bear markets in precious metals.

so top of my head calculations

buy 4k gold in '70 , sell late 79

buy at $50, sell at $700. You now have £56k (4kx14), you know when to sell because central banks are getting serious about inflation and stagflation - cue volker.

let's say you put £56k it in the bank and have £100k in 2002.

you decide to buy in again in 2002 at $300, you now have over £300k at current price.

and you didn't even need to time the top properly.

[wren]

You might as well say house prices only ever go up, or house prices only ever go down!

A mere cursory examination of the graph on the home page of this website demonstrates that either statement in the long term is not true.

History says that long-term economic cycles exist.

[Guest Charlie The Tramp]

buy at $50,

Are you saying the price of Gold was $50 an ounce in 1970 ?

If that was the price I would like to do some math.

I am trying to find out if my properties beat Gold or not as per the thread title.

House Prices Beat Gold

[sylvester]

Are you saying the price of Gold was $50 an ounce in 1970 ?

If that was the price I would like to do some math.

I am trying to find out if my properties beat Gold or not as per the thread title.

Sssssh, Charlie, don't mention the 'G' word...

Oh and it's 'maths' not math BTW

[Guest Charlie The Tramp]

Sssssh, Charlie, don't mention the 'G' word...

Oh and it's 'maths' not math BTW

Yes I know but the highly educated members here use the term " do the math " so I am merely following their speak as I wish to become a member of the new bright exciting Academic World.

[bearly hopeful]

Please feel free to shoot my post down , but it usually takes 300 monthly payments to secure your property purchase . So for a real comparison you would need to cost average the price of gold with the same payments you would need for the property purchase over the same 25 years .

[gravity always wins]

Houses beat gold hands down when you also consider your friendly bank manager will traditionally let you buy a house with a 5% deposit.

Plus you get to live in the investment!

Or others will pay you rent so they can live in it.

Not only that but you can find undervalued property (value assigned by dozy EA) and add value. Never been offered an undervalued Krug with potential.

[gravity always wins]

Please feel free to shoot my post down , but it usually takes 300 monthly payments to secure your property purchase . So for a real comparison you would need to cost average the price of gold with the same payments you would need for the property purchase over the same 25 years .

Will you be living in your gold?

If not where will you be living?

[Layman]

Controversial... but here goes.

That is 97 times. Older houses are up by 120 times.

Gold on the other hand

which is just 28 times.

So long term ... housing has it.

Or put another way:

Houses are over-valued

Gold is (very) cheap

[Letsdance]

Will you be living in your gold?

If not where will you be living?

Why not build a house with gold bullion, and simply render the outside.

HP crash gold goes up

Store your gold and live in your house at the same time

Best of both worlds, I bet GF lives in a house like this

[othello]

"So long term ... housing has it."

In the long term, we're all dead.

[godless]

Am I allowed to post here or will my post be deleted like the last one on this thread. It was not abusive and did not break the forum rules, someone just had a relapse when trying to search the meaning of humour

I thought I'd be the one to stop my posts on HPC but its seems I can rely on others to do that for me

:angry:

[Moderator: Forum logs show that you have not had a post deleted on this thread]

[godless]

To Moderator/s,

I replied to 2 posts last night and both are not present in my control panel. One of them was on this thread and another was in the metal forum (another one I was not happy about as I was saying farewell to a fellow poster). My post on this thread was definitely here last night and isn't now, maybe they got caught up with all the moving and deleting of posts and the subsequent "battle royale". Anyway, I'm not happy about this fiasco and the Gold Thread business, I'm not a gold bull but I understand the importance of the gold debate which has now been permanently locked out. Hopefully this is just temporary but I fear its not and HPC has now lost something of itself in the process. The arguing and ramping/anti-ramping was nothing compared to the valuable information that the posters and the thread represented. As far as I saw the mods agreed to allow gold to be discussed as long as it was in its own thread on the main forum, that agreement is now void

Why did this argument about the Gold Thread escalate to the point it did. A 600 page thread of active information has been taken from the main discussion forum because someone asked for it to be pinned then someone disagreed and a mod said yes then no and moved it before totally locking it altogether ? WTF

My job involves gold and my future home is going to be paid for by doing my job (which has little to do with the price), is that somehow off topic

[Optobear]

Or put another way:

Houses are over-valued

Gold is (very) cheap

When I posted this thread yesterday I had no idea about all the gold thread stuff that was going on, it is/was not a thread I often look at (I guess because I don't have enough assets to make gold a viable option).

I'm just posting to make a comment about this thread (which was really to highlight the outrageous increase in housing relative to other assets).

Due to the controversy around the gold thread I think this post might have looked much more political than I had intended. So, apologies to anyone who got that impression (or felt I was insensitive to post what must have looked a deliberate reaction). It genuinely was sheer coincidence.

However, and there is always a however, in my posts. However, it is actually pretty interesting, because when you're talking about houses rising 100 times, gold 30 times and cash 20 times it really does raise the question of what you mean by money in the longer term?

Housing obviously worked for people like the Duke of Westminster over the longer term, and they are richer vs holders of other assets. Holders of cash did the worst (although they stood to make a return on interest payments),

I guess that the approximately 5 times higher multiplier for property over cash money reflects the simple fact of money creation through the cycle of debt - & redepositing?

So houses are overpriced by 3 times compared to gold. Or do I mean houses are 5 times overpriced compared to cash. Or do I mean cash is 5 times underpriced compared to property. You see the problem? There is really no where to go in terms of setting the reference. So I'm forced to conclude ... gold may provide one of the few ways to actually look at this over the longer term.

Now, perhaps like many on here, I have held the view that houses are massively overpriced - and perhaps due to fall by around 30%. However based on the long term and the crazy 100 fold increase since 1952 - could they trend very much lower??? So while I'm hoping for a fall, I don't want to see an 80% drop!