Compound growth in house prices over ?

[DANNO178]

Originally Posted by Ugg

@Danno178- you fail to understand one thing about gold versus property..


Gold doesn't pay rent and gold doesn't keep the rain from hitting your head.

You can't grow food on gold.

Better to own property as an assett it at least has a utilitarian application.

So your saying it went all in one ear and then straight out the back door.

I would rather own an appreciating asset than a depreciation asset .

[DANNO178]

Originally Posted by IDT

I dont share this opinion of the gold standard being any good. Its a useless commodity in the real world, can't eat it, can't burn it to keep warm or run machines nor can you build with it. That is why it didnt work to have the dollar tied to it. Worse still if I a country floods the world with new gold it presents more faults than share trading.
Open market, with all of its faults, evens the playing field. The fact that the american system was corrupt has never surprised anyone. What the surprise was is that so many fell for the ruse. When the dollar value was tied to gold things were no better, remember there great depression?
The only measure of strength in an economy is the level of unemployment. Only problem that comes from low unemployment is that it more often than not results in a labor government who screw it buy taxing the life out of those who provide the jobs. But thats another topic all together............

Unfortunately this was not an opinion to be shared , so you dont have any choice , what was stated was facts , plain and simple .

[DANNO178]

Originally Posted by mostly_broncos

The gold standard was fine in the US until 1913 , the year they created the federal reserve. The true gold standard was suspended during world war one and never returned. After that war gold got mixed in with the pound sterling and the US dollar and crony capitalism really took off.

It was the federal reserve that killed the US dollar. The central bank began over printing gold certificates until they far exceeded the amount of gold in the whole world . They realized they had to end it because people might figure out there wasn't enough gold if large numbers of certificates were turned in for redemption.

Here is a link where someone took the time to inventory the number of gold certificates and compare that to the gold reserves.

http://www.moonlightmint.com/bailout.htm

I was trying to keep things simple for everybody , so I did not go back that far , I already have people complain and ask to condense things cause they could not spend five minutes reading something that they may learn or benefit from .

[Dr Jekkyl]

Originally Posted by DANNO178

Somebody asked me to explain it in detail , and then others whinge it is too long , I thought I condensed it enough for all to understand clearly .

My comments were in jest, my friend.

I thought you did a pretty good job actually.

[b0son]

Originally Posted by DANNO178

You see the reason gold is real worth is because somebody had to discover that gold , that had to mine it , refine it and then mint it , all that worth is embedded in that coin .

What about strawberrys? They have intrinsic value, someone had to have the farm to grow them, someone had to harvest them, someone had to get them to market etc etc. Yet the price of strawberrys hasnt gone up in years.

Why is gold special? It strikes me that for a completely arbitrary reason, everyone rushes to gold for a safe investment because everyone else rushes to gold. What if instead, people all decided to put their money into silicon? Or iron? Or polyethylene?

[Yellow_Festiva]

Originally Posted by DANNO178

I was trying to keep things simple for everybody , so I did not go back that far , I already have people complain and ask to condense things cause they could not spend five minutes reading something that they may learn or benefit from .

Thanks for posting your long replies.

While I agree with a lot of it, I still don't agree that gold is the messiah we must all bow down to.

However, I got badly burnt in the past for not diversifying my investments, perhaps I should look into taking all my eggs out of the real estate basket.

Cheers again,

Jason

[SteveJH]

Originally Posted by b0son

Why is gold special? It strikes me that for a completely arbitrary reason, everyone rushes to gold for a safe investment because everyone else rushes to gold. What if instead, people all decided to put their money into silicon? Or iron? Or polyethylene?

Diamonds (Carbon), Silver, Platinum etc.

[zilo]

Originally Posted by DANNO178

So your saying it went all in one ear and then straight out the back door.

I would rather own an appreciating asset than a depreciation asset .

Am pretty sure we are like minded to a point....
(and I just sucked a dozen eggs while typing )

But am pretty sure real estate is a dead duck and cash liquidity is king at the moment.

(that includes gold assetts...)

[zilo]

Originally Posted by DANNO178

Did you even look at it . Could not be clearer.

Houeshold mortgage debt is now double what is was in 2005 , does that mean anything.

All my friends and family have much lower mortgages than in 2005.

So doesn't refelect the state of the universe to me....sorry.

[IDT]

Originally Posted by DANNO178

Unfortunately this was not an opinion to be shared , so you dont have any choice , what was stated was facts , plain and simple .

Danno I hope you are up for some debate on this. How is the gold standard being better a fact? your comments were biased. You go on about the gold standard as it was the be all and end all. You never once mentioning its failings. How Governments and the rich have manipulated its value for hundreds of years every bit as much, if not more, than they do the dollar today. They would hoard to push up its value and flood markets to reduce its value. Each of the major wars, not just WWI and WWII have proved it didn't have the strength it claimed. i.e Germany pre WWII went from massive unemployment and debt to massive power without it (power of the people even iof insane). Gold just like printed dollars was/is only ever as valuable as what you can buy with it. That is the only fact.

You also mention oil as an indicator of the true value of money. Why then, from global perspective, has there been so little investment in alternate or renewable energy? Why is renewable energy a dirty word to the ubber rich? The fact is the availability, hence price, of oil is manipulated in exactly the same way gold was when it was the "standard".

Common sense says to tie the value of money to a single, or even a few, commodity/ies (such as gold or oil) is nonsense. Trading of paper monies, whilst not perfect, opens control to the value of the dollar to many more forces/factors and in turn making it fairer. Incorruptable, not at all, but much harder to corrupt all the same.

[DANNO178]

Originally Posted by Dr Jekkyl

My comments were in jest, my friend.

I thought you did a pretty good job actually.

How about less Jekkyl , more Hyde

[DANNO178]

Originally Posted by b0son

What about strawberrys? They have intrinsic value, someone had to have the farm to grow them, someone had to harvest them, someone had to get them to market etc etc. Yet the price of strawberrys hasnt gone up in years.

Why is gold special? It strikes me that for a completely arbitrary reason, everyone rushes to gold for a safe investment because everyone else rushes to gold. What if instead, people all decided to put their money into silicon? Or iron? Or polyethylene?

What about strawberries you ask. Well surely you know that anybody can grow strawberries just about everywhere. Yes even in the snow country, where I have seen hydroponic setups . I used to grow some as a kid in primary school . But the difference is you cant grow gold like you can strawberries or I would have been doing that instead and so would.everybody else. I wont even mention the silicon comment , or it may involve asking your age or telling you that when you reach high school you may want to study economics . Comon buddy surely you could come up with something better than these comments if you are going to put pen to paper.
What is so special about gold , nothing really except for the fact that it is real money , paper is not real money and thats why the value of nothing is disspearing faster than ever before . But none of you even knew that , cause your all sleeping , may as well be , but one day you'll all wake up and reality will kick in hard and fast.

[DANNO178]

Originally Posted by Yellow_Festiva

Thanks for posting your long replies.

While I agree with a lot of it, I still don't agree that gold is the messiah we must all bow down to.

However, I got badly burnt in the past for not diversifying my investments, perhaps I should look into taking all my eggs out of the real estate basket.

Cheers again,

Jason

Not a problem , gold is not the messiah , it is just real money , plain and simple , you will all come to realize this eventually. Just like many of you did not realize how scwrewed the world economy was and that your house price was guaranteed to come down when you were all told over three and a half years ago. Oh the joke comments that flew around then , when again you were all sleeping and had no idea but have now woken to that reality . Well gold is another reality for which you will all be awoken to . 100%.

And yes Jason , you are now realising to not have all your wealth in one basket is the better choice. Let me just tell you all now that most wealthy people would laugh at someone who had all your wealth tied up in one thing.

For example I own gold , Firstly I know that gold will go up more than house prices , but I only own a couple of kilos . I dont have all my wealth tied up in it. If you must know I would advise buying silver as it will go up more percentage wize than gold . And thats why I own a quarter of a tonne of the stuff . I knew that gold will go up more than houses and that silver sould go up more than gold. I also know that some gold mining stocks will go up more than silver , and have covered a few of those. I could have purchased half a tonne which I was nearly going to do , but I felt I would be tying to much wealth and that i had a good position and to not be too greedy , I was doing it mainly to protect my wealth not to get super wealthy , so you neex to stay focused. If you start to open your eyes Jason you will soon see that property is a shocking invesment and much more so these days. You can make your money work in so many different ways for you . Realestate will now only set you back in the current climate for whose knows how many years . I would be taking money out of there , as mentioned and proved youf now being double dipped for whi h you did not know last week , if you wait til everbody else knows it will be to late . You need to position yourself so you are not so exposed to the downside and look for some upside. I would buy gold.or silver over a house and.I am sure many would feel the same even though they dont actually act and that is the problem , act now before it is too late.

[DANNO178]

Originally Posted by Ugg

All my friends and family have much lower mortgages than in 2005.

So doesn't refelect the state of the universe to me....sorry.

Sometimes you say something half intelligent and then other times are left wanting.

Sorry but your friends and family dont reflect the state of the universe.

Household mortgate debt is double what is was in 2005 , this year we have had the biggest job losses in history , then biggest number of buisiness goi.g bankrupt .

What your comments show is that you choose to disreguard reality to compansate for the decisions you made and paints your picture much clearer to me .

[DANNO178]

Originally Posted by IDT

Danno I hope you are up for some debate on this. How is the gold standard being better a fact? your comments were biased. You go on about the gold standard as it was the be all and end all. You never once mentioning its failings. How Governments and the rich have manipulated its value for hundreds of years every bit as much, if not more, than they do the dollar today. They would hoard to push up its value and flood markets to reduce its value. Each of the major wars, not just WWI and WWII have proved it didn't have the strength it claimed. i.e Germany pre WWII went from massive unemployment and debt to massive power without it (power of the people even iof insane). Gold just like printed dollars was/is only ever as valuable as what you can buy with it. That is the only fact.

You also mention oil as an indicator of the true value of money. Why then, from global perspective, has there been so little investment in alternate or renewable energy? Why is renewable energy a dirty word to the ubber rich? The fact is the availability, hence price, of oil is manipulated in exactly the same way gold was when it was the "standard".

Common sense says to tie the value of money to a single, or even a few, commodity/ies (such as gold or oil) is nonsense. Trading of paper monies, whilst not perfect, opens control to the value of the dollar to many more forces/factors and in turn making it fairer. Incorruptable, not at all, but much harder to corrupt all the same.

Debate , come back and see me when you gathered a group of the greatest minds on the planet so I can have a little fun . Very amusing....

Gold is real wealth , paper is not . Gold is gold and paper is paper when its not backed by gold . Oil was three dollars a barrel for forty years in a row until they took the standsrd away completely in 1971. Nothing to debate but thanks for the jokes .

[Work Horse]

Just back away fellas and try not to make eye contact...

[b0son]

Originally Posted by DANNO178

What is so special about gold , nothing really except for the fact that it is real money

And yet even one of the richest men on the planet wont invest in it. http://www.forbes.com/sites/steveden...nvest-in-gold/

“Why do you think gold bugs get so irate? Because they really do come out. If you go on CNBC and say that bonds are kind of a poor investment, people don’t get mad at you. You don’t hear from the Treasury. You can knock almost any investment and nothing happens. But when you talk about gold it’s different. Of course that says something about their motivation for ownership. They want people to agree with them. They want everybody to get so scared they run to a cave with gold. Caves might be a better investment than gold. At least they’re not producing more caves all the time. So they want people to be as afraid as they are. Incidentally, they’re right to be afraid of paper money. Their basic premise that paper money around the world is going to be worth less and less over time is absolutely correct. They have the correct basic premise. They should run from paper money. But where they run to is the mistake.”

BTW, you never actually answered the question - why is gold special. In fact you completely missed the point. Ironic that you spent so much time trying to come across clever, yet comparatively little of it actually being clever.

Troll.

[gcg2503]

Why is it that these property / investment threads always get derailed by megalomaniacs?

Serious question.

[b0son]

Originally Posted by gcg2503

Why is it that these property / investment threads always get derailed by megalomaniacs?

Its a ****ing contest centred on 'i can make more money than you'.

I'd take him with a grain of salt. A few months back he was thinking of getting property but had to turn to a real estate agent for advice. Not what you'd expect from someone who thinks they know everything about economics. My guess, he recently went to some gold zealots seminar and wants the rest of us to drink the kool aid too.

[IDT]

Originally Posted by DANNO178

Debate , come back and see me when you gathered a group of the greatest minds on the planet so I can have a little fun . Very amusing....

Gold is real wealth , paper is not . Gold is gold and paper is paper when its not backed by gold . Oil was three dollars a barrel for forty years in a row until they took the standsrd away completely in 1971. Nothing to debate but thanks for the jokes .

Greatest minds, pffft. If that was so why then are we not on your gold standards still? Everything has a value, explain to me why linking the value of all things to a single commodity is a good thing? You fail to mention supply and demand in your arguement? The fact that there has been a massive poulation boom across the globe? The industrialisation of the third world? Apparently none of which have contributed to the value of the dollar and everything else. Its all because the unhinging of the gold standard. If thats what you believe than you ignorance is only equaled by your arrogance.

[GTPete]

There are 3 sides to every story.

Warren Buffets view on the current rush to gold below.

Mumbai: Warren Buffett, known as the sage of Omaha, has his own way of making a convincing argument. Here is an extract from his letter to shareholders that reveals what Buffett thinks about investing in gold.



• Gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True,gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.



• What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As “bandwagon” investors join any party, they create their own truth – for a while.



• Over the past 15 years, both Internet stocks and houses have demonstrated the extraordinary excesses that can be created by combining an initially sensible thesis with well-publicized rising prices. In these bubbles, an army of originally skeptical investors succumbed to the “proof” delivered by the market, and the pool of buyers – for a time – expanded sufficiently to keep the bandwagon rolling. But bubbles blown large enough inevitably pop. And then the old proverb is confirmed once again: “What the wise man does in the beginning, the fool does in the end.”



• Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.



• Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?



• Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.



• A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons).



• The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond. Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.

[BA GT-HO]

That is a good read ^

I remember predictions from our mate that there would be a 'crash' in housing by now, sure prices have corrected (which was needed in my opinion) but there doesn't seem to be much panic out there.

[Dr Jekkyl]

Originally Posted by BA GT-HO

That is a good read ^

I remember predictions from our mate that there would be a 'crash' in housing by now, sure prices have corrected (which was needed in my opinion) but there doesn't seem to be much panic out there.

Are you referring to Dave?

Thankfully, he was not totally correct but I do think he was on the right track.

There is no other word to describe the Australian property market than BUBBLE.

Really we are seeing a 'slow melt' scenario pan out:
- prices are in real terms decreasing or flat at best
- housing credit growth is very low by historical standards
- the shortage myth has been busted
- many investors are not realising the capital gains 'promised' to them and so will be looking to sell
- we are not in a high job growth period

Really, it is probably the best outcome the nation could have hoped for.

[BA GT-HO]

Bubbles tend to burst quickly not slowly melt away. Bubble is a term that is overused.

[b0son]

Originally Posted by BA GT-HO

Bubbles tend to burst quickly not slowly melt away. Bubble is a term that is overused.

+1

The property market has for the most part, been on a slow burn since 2004. Some parts of the market have gone up, others down. Overall, nowhere near the level of growth preceding 2004.

Immediately after 2004, the term bubble was justified. But its 2012, and prices havent gone up anywhere near as much as income....

[Dr Jekkyl]

Originally Posted by BA GT-HO

Bubbles tend to burst quickly not slowly melt away. Bubble is a term that is overused.

You know, I think you are right.

So will from now on refer to it as the housing balloon; inflated by favourable demographics, short sighted policy and cheap credit then partially deflated by a credit crunch before being re-inflated (beyond previous levels) by more poor policy and now slowly deflating as the conditions that drove the previous inflation no longer persist.

Deflation will replace melting as the analogy.

[ebxr8240]

If the housing market has dropped as much as they say??
How come my rentals have gone up $150 the last 5 years...
Possibly too low in the first place ??
It depends when and where you invest also ...

[b0son]

Originally Posted by ebxr8240

Possibly too low in the first place ??
It depends when and where you invest also ...

Rents were stagnant through the boom.. there were so many investors entering the market. Rents only started to climb once the boom was well and truly over.

[DANNO178]

Mornin all . Noticed I was given a little holiday yesterday and have not looked to see the message . I don't feel like responding to any comments right now but I would like to give some of you a little eye opener.

Some of you may remember when property at Cranbourne in Melbourne was looked at . In about april last year when you went to realestate .com.au typed in cranbourne , clicked on houses only and clicked on surrounding areas , there was 2,200 houses for sale, when I did this 5 minutes ago there was 5443. Now I don't know if some of you have followed other areas as was suggested , but in my own area there is now 30% more property on the market than there was this time last year when I put my house on the market.

[b0son]

Originally Posted by DANNO178

in my own area there is now 30% more property on the market than there was this time last year when I put my house on the market.

To use your own argument... your suburb doesnt necessarily reflect the state of the universe.