Wednesday, January 7, 2009
When measured in gold, this is already the worst house price crash in history
"I don't know if this sell-off in sterling has been orchestrated, but it suits the government. The economic downfall doesn't look nearly so bad measured in weakened sterling as it does in, say, dollars. House prices are down some 15-20% from the highs, depending whose figures you use, measured in sterling. But measured in gold, this is already the worst crash in history, as the chart below shows. [Chart 1]. What's more, this crash still has a lot further to go. In this chart, having risen by the most, London prices look set to fall by the most: [Chart 2]. My step-father doesn't like gold, because, he says, it doesn't pay any interest. I reminded him that tomorrow the Bank of England is set to cut interest rates again. Paper currency paying as much interest as gold, who'd've thought it?"