alexreeve

The US debt is and will be a significant problem, but the US has made some significant moves in the right direction.

Really because it looks horrendous:

http://www.usdebtclock.org/

QE is there to lower longer term interest rates and get people to move from safety towards risk, If inflation is rising significantly then we can reason there is less reason to encourage risk taking or have lower longer term interest rates.

Can the US government keep refinancing their debt, and finance their deficit with interest rates at 5%? What about 10%? What about 20%? What is the point at which elevated interest rates become politically unacceptable? What happens to the Fed's balance sheet if the US government defaults on its debt obligations? I don't know the answer to these questions.

I think you have rather misunderstood the primary obligation of the central bank if you think they can completely ignore government funding needs to deal with inflation.

All those who were promising collapse of the dollar and prices to the moon have comprehensively failed to see the future correctly.

It's a fair point. I certainly thought the banking crisis would eviscerate both USD and GBP in short order. What I failed to appreciate was the ubiquitous nature of the problem. It did not occur to me that every significant central bank in the world could/would co-ordinate so effectively to prevent catastrophic exchange rate fluctuations.

However I still don't see any liquidation of the bad debt (and corresponding credit) that cannot be repaid. I do not see any progress towards a resolution to the financial crisis, just still growing imbalances.

Do you feel that the financial crisis is over, and we are seeing the green shoots of healthy recovery?

First bitcoins then gold coins. It's like someone is playing whackamole.

tho that doesn't necessarily mean they will go up in real terms.

I genuinely suspect we are in for a long period of extraordinary wealth disparity. However, oligarchs don't generally buy at the top of the market, do they? I can't help thinking there'll be a wash out first.

I was speaking to someone recently who has been looking to buy a family home in London. She earns £200,000+pa, and her husband maybe £50,000. Having eventually come to the conclusion that they could barely afford a slum-clearance terraced house of yesteryear, in a second rate location, they have elected to sell their small flat and rent for a couple of years to "see what happens". They are not big believers in an inevitable HPC or anything, they just acknowledge that they are priced out of anything they would want to own and are just hoping circumstances change, maybe get posted elsewhere or something. I don't see how property continues to go up from here, even in London.

I traded around my position by lightening up at the top yesterday and then buying back today, but I would prefer not to have to do this and just to see a clear uptrend form!

A chance to do it all again today.

Proud in the context of that axiom just means sticking out enough to snag things moving past, not as in prideful.

I'm not a fan of JS messianic imagery and rather culty language like CIGA. Still it is obviously popular with plenty of people. However he is just one of many gold based websites/newsletters that have a similar MO.

Ah right, nah I was talking about Glasgow. I don't know Guilford, what's it like?

Quite nice - http://www.heureka.clara.net/surrey-hants/gu-ford.htm

£800,000 to £500,000 ?

(Which graph?)

This one, which I thought your comment referred to:

Prices in Guilford over last 11 years

And Glasgow?

 

http://www.home.co.uk/guides/asking_prices_report.htm?location=glasgow&startmonth=10&startyear=2007&endmonth=01&endyear=2012

 

I guess the answer to BaB's question is because the nice areas (and looking at the data, nice properties) are doing OK. The not so nice, which rose the most 1996 to 2007, are not.

According to the graph in the link the detached properties have gone from over £800,000 to under £500,000. Far, far more of a drop than I have observed living pretty close to Guidford.

Given similar circumstances to 2008 it seems quite possible this correction is the first shoulder in a large inverse head and shoulders correction.

This is shaping up nicely, and profitably (so far).

Nope.

Not a no-brainer. More like a big-risker.The world is changing, and the way we live and where we live - and certainly what people pay for rent may undergo very dramatic change in the future.

So is giving your money to a pension fund to invest in mortgage debt and government debt etc

Do you really think the next 2-3 decades will be anything like the last 2-3 decades ?

No. For one thing, I don't think pension funds will be paying out money (sufficient that you can live on), in 10-20 years time. Not that I think buy to let is a slum dunk, but anything that allows you to retain control is better than easily broken promises for the future.

Set gold free. Let it rise to whatever price. let it achieve is only role. The best store of value. Let it reclaim its role which has been kept hidden from a couple of generations. Keep global fiats as a unit of account and medium of exchange.

Gold Sovereigns and Britannias are already not subject to VAT or CGT in the UK. How do you propose they are set more free to be a store of value?

i own only some gold now and a great bundle of usdollars

You say that like it's a bad thing.

Given similar circumstances to 2008 it seems quite possible this correction is the first shoulder in a large inverse head and shoulders correction.

I quite like some of these kinds of youtube videos. I think there are enough verifiable ancient oddities present around the world that are not easy to reconcile with the orthodox view of mankinds societal and technological development. Some can be very interesting as ideas, but far too many try to cloak themselves in the "respectability" of science by claiming scientific proof that simply does not exist.

That video earlier about RH- genes??? It kicked off with the caption "If man evolved from apes, how come there are still apes around today?" Really, how can you take anything from that point seriously? The conventional theory is that man shares a closer common ancestor with apes than with other living creatures, not that humans are descended from modern Chimapnzees !

Sorry, but I think you might still be missing the point. (Although yes, the main point is we all have s**t loads of debt).

 

We, like the US, bailed out our banks, but that money is assumed to be coming back (for both us and them).

It is because the UK banks are a much larger percentage of UK GDP than the US bank are to their GDP that makes the headline figure which includes this, look so bad.

 

Hence the distortion (which is far far worse for Eire for example).

 

When these figures are taken out, I think we are much more similar.

Assumptions like that caused the whole sorry mess in the first place.

I remember when a $20 move up in an hour elicited pictures of rockets, now not even a comment...

http://www.zerohedge.com/article/kitco-charged-massive-tax-fraud-scheme-business-viability-question

Kitco Charged With Massive Tax Fraud Scheme, Business Viability In Question

One of the targeted sites was the downtown Montreal location of Kitco, a major buyer and seller of gold. A note on the floor of its office on Thursday said that “operational constraints” had forced the service counter to close this week." It is unclear if this alleged tax fraud bust means Kitco could be out of business shortly

I'm sure there will be plenty of interest in aquiring the company's talent; Jon Nadler for example...

If I may PD?

 

I'm starting to think we may look back on this point in the future as being the point where the non-property obsessed masses caught on.

 

Reading the 'Debate house prices' part of the UK's mighty MSE forums is a very different universe. Promoting PMs is almost criminal (threads get voted off!), but putting your money in a bank account isn't.

A strong BTL bull element doesn't help skewing every other thread, but nothing is done about such pollution.

I get the same **** from most expat Brits here, even when I don't want to talk about it! (At gatherings I increasingly seek the refreshing company of middle-aged Germans ).

Housing is a lot more relevant to peoples' needs though. Everyone needs a house (whether to buy or rent), so house prices are important to everyone. Gold is only relevant to those with savings, which is shockingly rare amongst the people I know. Maybe the reaction on MSE simply reflects that.

 

No wonder HPC hated goldbugs!

Not just HPC

http://www.moneyweek.com/investments/property/gold-price-and-uk-house-prices-04909

What's the most controversial topic we've ever tackled? You'd think it might be something about exploiting rising food prices. Or bankers' bonuses. Or even vice stocks.

 

I doubt any of you would have guessed: "the ratio of gold and silver to house prices". Yet that is the subject that holds the record for reader comments by a long chalk.

I can hear my property mad neighbour's words: "Gold? What use is that? You can't get an income from it."

I like the way Zero Hedge refer to gold simply as "the inedible metal".

Be helpful if people could give a hint which bit of the country they are in when commenting on their local market.

 

I'm not too far from Guildford in Surrey and I would describe the market as down 10% from peak in 2007 - but flat for the last year or more. Not that many transations - but not stagnant by any means - and, as always, good houses in good areas are still fetching top prices.

 

I'm not saying things won't change - for my kids' sake I hope they do.

I'm in Woking (right next to Guildford). I get a similar feel but with more variance by type, so flats are down more like 20%, low end housing 10%, better houses unchanged. But Woking has a huge supply of flats recently built and under development.