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tinecu

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Posts posted by tinecu

  1. GOLD

    in Gold, FX, Stocks / Diaries & Blogs

    Posted

    Something I've been meaning to analyse is a UK House Price in Gold 'Offest' - the idea here is that you buy your house at the absolute bottom using the smallest deposit possible and hang on to your gold positions as both houses and gold rise in value.

     

     

    Let's look at what happened last time when gold was in a bull market:

     

    Gold averaged $675 in January 1980 when gold hit it's 1-day peak of $850 - converting this 'achievable' average gold price of $675 in January 1980 back into pounds using the following tables found below:

     

    http://research.stlouisfed.org/fred2/data/EXUSUK.txt

     

    This gives an exchange rate of 2.2641 for that month which gave an achievable gold price of £298 for those in the UK in January 1980.

     

     

    The Nationwide data says that the average UK house price in Q1 1980 was £22,677

     

    (House prices again peaked at around the time that gold peaked after a mini-boom that started in Q2 1977 - this is what you see on the Natiowide graph and it came after the 1973 peak in house prices due to to negative real interest rates and was followed by another recession in 1981)

     

     

    So to recap, back in January 1980:

     

    Average house price was £22,677

    Average gold price was £298

     

    That means that the average house was 76.1oz of gold.

     

     

    Here's the interesting bit :)

     

     

    Had you bought where the average house was 76.1oz of gold, you would have been buying around the peak of the housing market :lol:

    The late 70's mini-boom in house prices ended with a peak in Q4 1979 (just before gold peaked in January 1980) and prices fell in real terms for nearly 3 years until another bottom in Q2 1982.

     

    The bottom of the housing market after the 1973 crash came in Q2 1977 where the average house was £12,689 - offsetting this house price bottom with the gold price peak just 2.5 years later in January 1980 would have meant the average house was only 42.6oz of gold. :)

     

    As an example, lets say house prices bottom in real terms in Q2 2012 (could be even longer) and gold peaks about 2.5 years later in Q4 2014 - the best stratergy is to buy your house as near to the bottom as possible (as in Q2 1977, Q2 1982* and Q4 1995*) with the least money down if we've got decent inflation and hang on to as many gold positions as you can until the peak.

     

    That might be when interest rates start rising and the housing market begins stalling once again - 2014 is just a projection I have but no-one knows how bad this is all going to get and how much inflation will be created. But buying a house as near to the bottom as you can has got to be the best thing you can do - no point waiting for gold to hit a peak before you buy as that will likely be a peak in housing as well!.

     

    Catflap

     

    (* at the 1982 and 1995 lows you would have put the least money down on a house and everything else into the stockmarket)

     

    Interesting stuff. How does this plan look if you factor in the interest payments? As I recall IRs were high back then.

     

  7. UK House prices: News & Views

    in NEWS Commentary, 2021 & Beyond

    Posted

    May be so, but to make things worse, houses are selling like hotcakes here in Cambs. A friend of ours put their house on the market for £195k (from a peak price of £200k?!!??) and they have just Sold STC. There are loads of properties in Sold STC state in Cambridge.

     

    I just wish this house price crash hurried a bit, I want to get a house for my wife and kid at a reasonable price :(

     

    When the government has to cut higher education spending Cambridge will be slaughtered. In fact they collapse has already begun:

    http://www.home.co.uk/guides/house_prices_...mp;endyear=2009

     

    Companies are already shying away from joint R&D projects with the Uni cos they charge too much, esp. for admin.

     

    Sounds like your friend got lucky!

  8. GOLD

    in Gold, FX, Stocks / Diaries & Blogs

    Posted

    I reckon they have got at least 5000 tonnes by now, probable more like 7000 tonnes. In fact it wouldn't surprise me if they have the world's biggest gold reserve as of now. Who wants to bet on how much the Americans have in Fort Knox? 500 tonnes? :lol:

     

    I hope they (the Chinese) have taken delivery! :lol:

  9. GOLD

    in Gold, FX, Stocks / Diaries & Blogs

    Posted

    There is an interesting article on marketoracle showing how the gold price tracks the under or over valuation of the housing market, albeit with a 2 year lag. It cites a historic chart with future projections that if correct could see gold at $200 by 2012 due to deflation.

     

    :o

     

    I know everyone on this thread is very bullish about gold for several good reasons. I too have a position. However, I think it is good to take note of any bearish sentiments to get a balanced view.

     

    http://www.marketoracle.co.uk/Article10185.html

     

    What a terrible article.

    Andrew Butter is managing partner of ABMC, an investment advisory firm, based in Dubai ( hbutter@eim.ae ), that he setup in 1999, and is has been involved advising on large scale real estate investments, mainly in Dubai.

    Quite telling methinks. ;)

  12. GOLD

    in Gold, FX, Stocks / Diaries & Blogs

    Posted

    is it just me or does anyone else get quizzed by the banks when wiring funds over to goldmoney

     

    how did we sleep walk into state control

     

    its my money and I want to be able to do whatever i want with it without being forced to answer the questions

     

    Yep me too. I loath their prying. 'Money laundering' they say to me. Bloody hell, I think, perhaps if you'd scrutinised your own investments more closely we wouldn't be in this mess. :angry:

  13. GOLD

    in Gold, FX, Stocks / Diaries & Blogs

    Posted

    This is just another one of those low moments that makes me doubt my stash, but from experience... I have had this feeling a few times

    only to see gold price rocket. Perhaps I should buy a few more ounces while at this price.

     

    Deep down, I can feel gold is a very good choice, at least for my surplus cash, but I get a bit sea sick riding these volatile waves.

     

    I prefer to think that owning gold has revealed to me the volatile value of fiat currency, especially these days.

    An ounce of gold is now worth the same as it ever was!

  17. GOLD

    in Gold, FX, Stocks / Diaries & Blogs

    Posted

    ;)

     

    yep paper currencies are going to crash over the next few years - those who own gold will protect their purchasing power but its not going to be fun

     

    panic of 08 and collapse of 09

     

    Those poor English. If any people were dumber at finance than Americans, it was the English. While debt in the United States rose to an unprecedented 350% of GDP, in England it went to 500% of GDP. And now joblessness in Britain has risen above 2 million for the first time since 1997.

     

    Says it all really. :lol:

  19. GOLD

    in Gold, FX, Stocks / Diaries & Blogs

    Posted

    Lets see if I can make sense of this.

     

    OK, most obvious, Gold & Silver are rising rapidly.

     

    The Euro is rising against the US$.

    The Euro is rising against the JPY.

    The Euro is rising against the GBP.

    So the Euro is rising.

     

    The JPY is falling against: NZ$, EUR, but rising against: US$. Fairly stable against GBP.

     

    The US$ is falling against JPY, EUR, GBP (and even NZ$).

    So the US$ is falling.

     

    So today, so far, GoldUS$ just went up 945/890 = 6%.

     

    I guess that's what happens when you print lots of money.

     

    Fed pumps $1.2tn into US economy

    http://news.bbc.co.uk/2/hi/business/7951493.stm

     

    What a crazy day. I still haven't got used to this volatility. Maybe never will. ;)

  22. SILVER

    in Gold, FX, Stocks / Diaries & Blogs

    Posted

    Can someone explain to me why silver has vat on it but gold does not?

     

    At the moment I want to buy more silver but the vat thing really annoys me. Maybe that was the purpose of it?

     

    You could open an unallocated account with Bairds...no VAT unless you take delivery.

     

     

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