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G0ldfinger's GOLD Thread: Longer Term Aspects

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TRIPLE POST for housekeeping purposes.

 

I believe this chart is correct, especially since the 1980 top of over $800 lasted only a couple of days or so, while we have been north of $1,600 for a long time now, so the average annual price of gold in 1979-80 was much lower (than $800). Do I think it's time to get out? No, not really yet. I've always said that the former lows are places to watch out for, but as well that this financial crisis is so much larger and that we need to look at other indicators as well.

 

I see no reason why the average U.S. house built in the middle of nowhere in the hope for cheap oil/energy, good employment, a stable dollar, and lots of cheap debt for property speculation should not lose much more value compared to gold.

 

Watch out for sub-50-oz prices.

 

US housing to gold ratio now same as 1979 low

 

http://danielamerman.com/articles/2011/GHRatioC.html

Ratio1.jpg

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TRIPLE POST for housekeeping purposes.

 

What do you think of the inflation adjusted gold chart?

That one is also correct IMO using government CPI-inflation. The reason is the same, the average in those years was much lower (around the spot prices of today, I guess) than the singular spike. See also the chart below for an illustration. Naturally, the same caution applies: this is one singular measure for relative value, which is also skewed because of the use of hedonistic government adjustments to CPI - similarly the property:gold chart is somewhat skewed because of the extent of the US housing crisis (there was no such crisis in 1980).

 

On a government CPI-adjusted base, and on a house price base, taken as is with no other information, it looks as if a top in gold was close, but if I look at the corresponding monetary data I can just laugh at that idea.

 

http://gold.approximity.com/1979-1980/Gold_USD_CPI-adj.html

Gold_USD_CPI-adj.png

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TRIPLE POST for housekeeping purposes.

. . .

I see no reason why the average U.S. house built in the middle of nowhere in the hope for cheap oil/energy, good employment, a stable dollar, and lots of cheap debt for property speculation should not lose much more value compared to gold.

 

Watch out for sub-50-oz prices.

GF, I agree with you!

 

Ratio1.jpg

 

(the chart shows: source

In gold terms, an average single family home in the United States can now be purchased for only 18% of its pre-bubble price in 2001. The term "pre-bubble" merits emphasis: the average house can be purchased at an 82% discount (in ounces of gold) not from the peak real estate values of 2006, but the much lower home prices of 2001, before the real estate bubble began.

 

These numbers are based upon the Gold / Housing ratio, which is a measure of relative value between gold and real estate. When we take the $171,900 current median national price for an existing single family home (per the National Association of Realtors) and divide by the $1,785 price per ounce of gold as of November 15, 2011, we come up with a Gold / Housing ratio of 96, meaning it takes 96 ounces of gold to purchase an average single family home.)

 

His measure of "an average single family home" will include many homes in the suburbs, and even some McMansions in the outer ring suburbs.

 

As I have said elsewhere, I think some of these home will be "headed towards becoming firewood" when Peak Oil prices really hit the US economy and finally the average American wakes up an realises that he/she will need to change their living arrangements (to small homes and flats) situated closer to their places of work.

 

Under the circumstances of a $12, $15, or $18 gasoline price, many American suburbs are not going to be viable at all, and the homes located there may wind up abandoned, as many homes in places like Detroit have been abandoned, as people move away to other locations.

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Hi everyone.

 

Thanks for all the messages that I have received over the past few days. I read your message too, DrBubb. Thanks for that.

 

I don't have time for drama right now, and I also have not posted much recently anyway because I am simply too busy. So, here is the deal: I will take a little break until (most likely) after Easter, and once I feel like posting again, I will decide how and where I am going to do this from now on.

 

I also want to thank for the invitations to other forums (sometimes I feel like some kind of football star or so :) ), but I will first take my break and then see. I have no hard feelings (not to Bub or GEI) at the moment, and I haven't followed the discussion recently if there has been any. Maybe, if I want to start posting again, I should do it on more than just one forum? Maybe not all types of discussions can be borne by one forum? Maybe this is where all the 'problems' are coming from?

 

Anyhow, I'll have a little break, and then we'll see.

 

GF

 

 

P.S.: There is a new update of the Approximity charts. Everything is right on target.

 

http://gold.approximity.com/since1885/DJIA-Gold-Ratio_LOG_GUESS.html

DJIA-Gold-Ratio_LOG_GUESS.png

 

http://gold.approximity.com/since1930/UK_House_Prices_in_Gold_LOG_GUESS.html

UK_House_Prices_in_Gold_LOG_GUESS.png

 

http://gold.approximity.com/since1970/Gold_Price_to_External_Debt_Equilibrium_Price.html

Gold_Price_to_External_Debt_Equilibrium_Price.png

 

http://gold.approximity.com/since1985/Gold-Silver-Ratio_GUESS.png

Gold-Silver-Ratio_GUESS.png

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Best of luck GF

 

 

 

 

Yes, GF, All the best in what ever you decide to do. Many thanks for your posts Iv found a lot of them very useful.

 

I hope that you pop by from time to time to have a read on what is going on here.

 

Good Luck.

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This chart is the one that did it for me. And it came from nowhere pretty bloody quickly, right into that little green bubble. I'll never forget not being able to move quickly enough though not through want of wanting to. A picture tells a thousand words-thankyou GF.

Please keep Approx up to date, 'that is all ye need to know', IMHO.

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Update available: http://gold.approximity.com/gold_charts.html

 

Chart of the month (May 2012)

It is interesting to see how the DJIA:Gold chart seems to acknowledge technical levels, despite of it being no directly traded asset but instead the ratio of the prices of two very distinct market objects, namely gold and the Dow Jones Industrial Average. The ratio now stands at the 8.0 level, and it will be interesting to see whether it will be able to

go higher, or whether it will be reflected downwards to indicate a worsening economic reality in the U.S. As a comparison, a chart since 2008 shows how the 10.0 level played a similar role for the ratio back in 2009...

 

DJIA-Gold-Ratio_120427.png

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Interesting chart.

 

Thanks, as always for posting it

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Good to see you posting here again GF.

 

Without your balance, this place was starting to look like a recently acquired Silverstein property that just had its insurance doubled. :)

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