Friday, April 27, 2007

Nice diagram

Inverse liquidity piramid

Notice how property is the 2nd worst asset to hold in liquidity terms.

I have just switched 80% of my gold unit trusts to Tresury Bills this morning.

Posted by sold 2 rent 1 @ 11:50 AM (2903 views)
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6 thoughts on “Nice diagram

  • It is a very pretty diagram I grant you – but it asks the question why gold is the best investment, and then provides no actual answer! Should we simply be convinced by the pretty colours? 🙂

    I see commodities are low on the list – gold would just be another commodity if humans hadn’t been using it for currency for thousands of years though, do remember that – gold is only different to anything else thanks to history; it’s just a metal after all. It’s “pretty”, maleable (so can easily be made into jewellery) and relatively rare, so our society has prized it a bit more than other “stuff” we dig up from the ground. Gold – BUY! BUY! BUY! ……. Gold – SELL! SELL! SELL! Your own postings suggest gold is not necessarily much better than stocks or houses or whatever. Sentiment could turn against it in the same way as anything else – I’m not saying it’s likely that we’ll all wake up tomorrow and say, “gold is actually rather ugly, I prefer the look of lead”, but do remember that every country in the world has a fiat currency, so your gold is only “worth” bits of paper now (severing the gold standard works both ways). I don’t really believe people will give up on gold of course, but it’s not impossible – food for thought at least.

    Also, sorry to be a party-pooper, but I have to join some other postings and point out that this isn’t “investor’s forum website”, it’s – this diagram doesn’t say anything about the current UK housing market; it doesn’t even say anything about the state of the wider economy; it’s kind of not relevant in this arena therefore, I’m afraid.

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  • Apologies if that sounds a bit harsh, not trying to be mean.

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  • sold 2 rent 1 says:


    No offence taken.

    I realise that this is not one of my better postings but to say that it is not relevant in this arena is prejudging how events will actually unfold.

    One of the reasons I like HPC so much is that it is a bearish site that doesn’t have too many restrictions on the topics discussed. Just because my views are extreme and slightly away from the core topic doesn’t mean they are less valid for discussion. Most of my posts will get positive replies so there is evidence that they are relevant.

    Joining an “investor’s forum website” would be a waste of time as the herd mentality is currently in a bull run.

    Remember, 6 months ago the mainstream press had a consensus opinion that house prices will only ever go up. That appears to be changing now.

    This site has had a consensus view that HPC will happen with a likely reduction in prices in the range of 20-30% for quite some time. It is only by pushing the boundaries of the core topic that this consensus view gets challenged. If no boundaries are pushed then the consensus view will be reinforced and we will be in a herd mentality of our own which is closed to new ideas.

    For this reason I will post whatever I think is relevant.

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  • OK, fair enuf! 🙂

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  • No man is an island, and neither are house prices. In this sense the thing that brings about HPC might be nothing to do with houses directly, i.e., the number of available units per population. S2R1 doesn’t need me to defend his cause; however, I see his posts as long-range weather forecasts – we’re all looking for the storm clouds on the horizon. This may be more speculative than looking in an estate agents window, but it’s a lot more fun and educational.

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  • Whilst not directly on topic it still seems relevent. I am saving up for a house at present and like many this depends on there being a correction in prices. In the meantime my savings need protecting. I’m more of a gut instinct person than theory follower, but this information gives me some comfort in that my money is currently all in the safe zone.

    Thanks s2r. Keep them coming.

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