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Gold housing ratio falls to historic low
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2012 Mar 3, 12:07pm 32,088 views 77 comments
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REpro
2012 Mar 7, 6:24am
The day of hyperinflation is rapidly approaching.
The only FED can decide if this has financial sense for them.
Dan8267
2012 Mar 7, 8:49am
Gold's popular phase is just getting started.
Then it should be damn cheap to get insurance to cover losses on gold speculation. I'm willing to give up 10% of my real profits in gold speculation in exchange for a guarantee that I will take no real loses. Go find me an insurance company that will sign this deal and back it up with adequate cash reserves.
Here, you want a rundown on what the United States is facing:
If Patrick doesn't allow you to see it, it's to your own detriment.
You see, this time it's not different. All fiat currencies go to zero. In 1850, $20 was a lot of money, a lot of money. That was a little less than 1 ounce of gold.
tdeloco
2012 Mar 8, 1:42pm
You can compare purchasing price of gold with anything: Silver, McMansion, Big Macs or Coffee Beans. Gold is overpriced. Am I buying gold? Hell yeah!
Gold is high because people are worried big time! If, by some divine intervention, economic problems go away overnight, Gold will surely drop like a rock. Until our economic worries go away, I'll dedicate a small part of my savings to gold.
dunnross
2012 Mar 8, 6:50pm
Go find me an insurance company that will sign this deal and back it up with adequate cash reserves.
Your insurance is called - "put options". You can buy put options on GLD.
Dan8267,
How many people do you know who own Gold?? How many people owned nasdaq and real estate when we hit bubble levels??
freak80
2012 Mar 8, 11:43pm
The "Peter Schiff Factor" is already priced into the gold market. People are buying gold based on fear. Want proof? Gold is advertized on right-wing web sites and certain AM radio shows.
Gold will eventually mean-revert.
REpro
2012 Mar 9, 1:24am
How we can be so sure that by buying gold certificates is real gold behind? The same people control gold supply as money supply. If money can be created from a thin air so as gold. Nobody really have access to see it or have gold bars shipped to his home.
tdeloco
2012 Mar 10, 4:23am
Not so sure. When they get worried, like when stocks tank, gold sells off.
Sometimes it moves opposite of the stock market. Other times, Gold drops when stocks drop. I suppose it depends on the nature of the news that triggers the rise or drop. Worries about the broad economy make people buy gold.
Gold chart for the year 2011.
Dow Jones 2011.
Gold moves opposite of stocks from August to September as the U.S. lost AAA rating. Similar movements in November due to EU drama. At the end of the year, stocks were moving up while gold was moving down. Comparing the beginning of the year to the end, both gold and stocks are up.
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http://www.financialsense.com/contributors/daniel-amerman/2011/11/18/gold-housing-ratio-falls-to-historic-low
This must mean something to the gold bugs doesnt it?
As shown at "Point A", on an average annual basis, there was a previous modern ratio low of 99 ounces of gold to buy a house when gold reached its financial crisis peak valuation in 1980. Real estate was remarkably cheap relative to gold - and real estate investment would outperform gold by a huge margin over the 21 years to come.
"Point B" occurred in 2001, with the Gold / Housing ratio reaching a high of 543 ounces of gold being needed to buy a single family home. Gold was remarkably cheap relative to real estate - and gold asset prices would outperform real estate asset prices by a huge margin over the 10 years to come.
The current price of gold (as of November 15, 2011) is reflected in "Point C", which shows a Gold / Housing ratio of 96 ounces of gold being needed to buy the average single family home. This is only 18% of the 543 ounces required in 2001. Real estate is once again remarkably cheap, when compared to gold.
#housing