...which would explain why the aussie govt wants to do SFA about whaling.
Gold vs Property
- Thread starter House_Keeper
- Start date
...which would explain why the aussie govt wants to do SFA about whaling.
or Tibet, or Timor, or Aceh, or Sudan, or the Mossad, or detained RIO employees........
we still try to punch above our weight, and the rest of the world knows it.
Thx TC.
Winston, A good example is the very next mornings grains report from here,...
http://www.forexyard.com/en/news/GR...wheat-corn-soybeans-higher-2010-02-26T181659Z
........"CHICAGO, Feb 26 (Reuters) - U.S. wheat, corn and soybean futures rose sharply on Friday as a falling dollar spurred investments in grains as a hedge against inflationary pressures, traders said.
Wheat posted the biggest gains at the Chicago Board of Trade, rising 2.9 percent, despite plentiful supplies around the world and poor prospects for U.S. supplies on the export market. Corn futures hit their highest level in more than six weeks.
"Everyday the grains are following the dollar," said Tomm Pfitzenmaier, partner at Summit Commodity Brokerage in Des Moines, Iowa. "That is lower and that is bouncing the crude oil, bouncing the gold. I think that is kind of leading the grain markets higher".........
It looks like any commodity is a hedge against the falling US dollar.
Wheat prices on CBOT rose, the US dollar dropped. Equals no change to me.
See ya's.
Of course, grain would be a terrible thing to use as a hedge against inflation, because you then have to put up with the normal month to month and year to year fluctuations in price. Same with most other commodities.
There is twice as much wheat in the world now than 2 years ago thanks to 2 big global crops, so the price has halved. But there is only a tiny amount more gold in the world now than 2 years ago, so gold is a good hedge.
See ya's.
There is twice as much wheat in the world now than 2 years ago thanks to 2 big global crops, so the price has halved. But there is only a tiny amount more gold in the world now than 2 years ago, so gold is a good hedge.
See ya's.
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I'm unsure who Press Dispensary is, maybe a wire service, but this is the start of a release from them:
PRESS DISPENSARY - Thursday, Feb 25, 2010 - The UK Pound is on the brink of a collapse which will herald a downturn worse than 2008/9, it could well happen within weeks and the British government is powerless to prevent it. And this in turn will foreshadow a global economic winter that could come before the end of 2010 and make the last two years seem like a mild spring day.
This is the dire prediction of the legendary George Soros' former business partner, respected billionaire financier Jim Rogers, together with millionaire investment adviser and best-selling author Dr Marc Faber and the controversial millionaire trader and coach Vince Stanzione, ahead of their keynote appearances at next month's Global Trading Day seminar in Westminster.
We all know Marc Faber as Dr Doom, but while Jim Rodgers is down on the USD he is not normally a doom merchant. I don't know Vince Stanzione.
PRESS DISPENSARY - Thursday, Feb 25, 2010 - The UK Pound is on the brink of a collapse which will herald a downturn worse than 2008/9, it could well happen within weeks and the British government is powerless to prevent it. And this in turn will foreshadow a global economic winter that could come before the end of 2010 and make the last two years seem like a mild spring day.
This is the dire prediction of the legendary George Soros' former business partner, respected billionaire financier Jim Rogers, together with millionaire investment adviser and best-selling author Dr Marc Faber and the controversial millionaire trader and coach Vince Stanzione, ahead of their keynote appearances at next month's Global Trading Day seminar in Westminster.
We all know Marc Faber as Dr Doom, but while Jim Rodgers is down on the USD he is not normally a doom merchant. I don't know Vince Stanzione.
I like food commodity investment as comparing to other commodity like metals, the downside of a new GFC will be much more limited and the upside of prices looks better. For Australia in particular you would have the exchange rate advantage as well as the AU$ would follow more closely the metal commodity prices. If farmers in Australia makes money with this exchange rate and high AU$ and borrowing costs they are a quite safe investment.
Britain's borrowing habit puts it in the 'PIIGS'
http://www.thisismoney.co.uk/news/article.html?in_article_id=499795&in_page_id=2
Euro in danger as Greek crisis deepens
http://www.thisismoney.co.uk/markets/article.html?in_article_id=500274&in_page_id=3&ct=5
George Soros warns Euro could fall apart
http://www.thisismoney.co.uk/markets/article.html?in_article_id=500124&in_page_id=3
30 second guide about George Soros
http://www.thisismoney.co.uk/30-second-guides/article.html?in_article_id=484658&in_page_id=53611
http://www.thisismoney.co.uk/news/article.html?in_article_id=499795&in_page_id=2
Euro in danger as Greek crisis deepens
http://www.thisismoney.co.uk/markets/article.html?in_article_id=500274&in_page_id=3&ct=5
George Soros warns Euro could fall apart
http://www.thisismoney.co.uk/markets/article.html?in_article_id=500124&in_page_id=3
30 second guide about George Soros
http://www.thisismoney.co.uk/30-second-guides/article.html?in_article_id=484658&in_page_id=53611
Well the thread titile is "Gold vs Property".
And YIP has paid ads claiming that "gold will pay your mortgage".
What is obvious is that the mortgage or LOC pays for the gold.
Gold has not outperformed leveraged RE.
If you bought $1,000,000 of RE in 2001 with a 10% deposit of 100K, you would now have >$1,500,000 and fairly CF nuetral.
So in the last 10 years your 100K has gone up 500% (on paper) with minimal holding costs. And in a dead RE market your liquidation value would still be ~300%.
Anyone tried going to the bank and say "I got 100k cash and want to buy $1mil of gold, can you lend me 900K?" and see their reaction? If you do please get it on video.
A major characteristic of property is that it has much more collateral value than gold. Even now many banks will give a no doc loan for 60% of equity hardly any questions asked. Try that with gold.
Inflation hedge? The loan in itself is a hedge for inflation.
"hedge as it is a crisis hedge"
This line is used often as a scare tactic, but exactly what type of crisis? There are many.
The common has long life canned food valued higher than gold.
A few hundred bux goes a long way there.
If war breaks out...well in countries at war US cash is better than gold.
But what about China? China is still on avg almost 100 yrs behind the G8 in terma of "financial development". Is that not obvious?
As for Soros and those others, they came out barking & yelling the demise of the US$, which I bought, sold, and bought again. My one claim to fame, I kicked George's A$$ on the US$
and of course Schiff (all in public forums).**and ftr, no they were'nt my investments just ones I remember well, and there's plenty others.
As for Soros and those others, they came out barking & yelling the demise of the US$, which I bought, sold, and bought again. My one claim to fame, I kicked George's A$$ on the US$ and of course Schiff (all in public forums).
**and ftr, no they were'nt my investments just ones I remember well, and there's plenty others.[/QUOTE]
How do you know that what they are saying and what they are DOING is the same.
If they are traders they might create positions first and then make public comments to profit from their positions.
and of course Schiff (all in public forums).**and ftr, no they were'nt my investments just ones I remember well, and there's plenty others.[/QUOTE]
How do you know that what they are saying and what they are DOING is the same.
If they are traders they might create positions first and then make public comments to profit from their positions.
there is a lot of spruiking on those currency issues, this is what soros MAte Jim rogers has to say:
link
this was few days after some press reported:
Pound could collapse "within weeks" warns ex-Soros partner
Very good point.
But they did go "on the record" across all media when e/u was ~1.4 and aud/usd ~ .90. I also went "on record" with a usd "buy now!" against all pairs in Jun 08, covered a few mths later, small long and short early this year again.
Maybe they were trying to protect their short USD positions, or maybe looking to get a bigger position at a cheaper price. Either way, it's there and timestamped
and publicly makes them very wrong. Though Soros always admits his mistakes, the other are not good enough to do that.Then you have Buffet who buys into gov. protected securities, cries all over the media for gov support and pumps them all he can. World's best investor? Yeah right, more like the world's greatest insider.
Of course this is trading more than investing.
I'll also refer to my IMF post:
Going slightly off-topic...
Apparently there have been some very big bets taken by hedge funds that the Euro will fall to parity with the US Dollar in the not too distant future. Soros is linked to this group.
I don't think that the Euro is about to break up, and Greece is being somewhat intransigent when it comes to making budget cuts. But the upshot of this is likely to be closer economic governance of the EU when the dust settles, and probably more of the Bundesbank's DNA in the ECB. Given the debt problems of recent years, that might not be a bad thing.
Apparently there have been some very big bets taken by hedge funds that the Euro will fall to parity with the US Dollar in the not too distant future. Soros is linked to this group.
I don't think that the Euro is about to break up, and Greece is being somewhat intransigent when it comes to making budget cuts. But the upshot of this is likely to be closer economic governance of the EU when the dust settles, and probably more of the Bundesbank's DNA in the ECB. Given the debt problems of recent years, that might not be a bad thing.
Alan Kohler makes mention of this a bit in his weekly wrap. Just a tidbit,...
............"End of the welfare state?
There is also something deeper at work that has little to do with the Global Financial Crisis.
The purpose of the EU was to end the French/German/British animosity that had caused so many wars and so much misery over the years, including one war that went for a hundred years (1337 to 1435) and the two dreadful world wars of the 20th century.
Along with the creation of European Union went the North Atlantic Treaty Organisation (NATO) which was designed to stop the expansion of the Soviet Empire.
But these things had to be backed by popular support because the countries doing them were democracies. The militarism of NATO and the Cold War, plus the bureaucratic blanket of the Common Market and then the EC and then the EU and the euro, along with the loss of well-loved sovereign currencies, would never have succeeded in their aims of ending war and containing communism without broad support.
As a result the welfare state was invented – the idea of “cradle to grave” protection, especially in Europe.
In part, what we are seeing with the budgetary strains in Europe is the unravelling of the welfare state created in Europe after the defeat of Germany and Italy in 1945 to ensure that it never happens again.
The reason it’s collapsing is not the recession and debt-funded stimulus designed to prevent it, or that the animosity between France, Germany and Britain have returned. It is the fact its demographic underpinnings are no longer valid.
People used to die not long after age 65 and they certainly didn’t want to work after that time. Now most people are living into their 80s and are useful workers well after 65. Just look at Robert Gottliebsen.
Also there was a baby boom after 1945, which meant that when the establishment of the welfare state was into full swing in the 1960s and 1970s, the population bulge was working and paying taxes.
What’s more, the people who were retiring then had put up with appalling deprivations and made great sacrifices during he Depression and the War, and were entirely deserving of a generational transfer so they could live a comfortable old age.
All that has changed now. The baby boom generation is reaching retirement age and the younger generations don’t want to support them – and can’t for that matter.
The welfare state is under both moral and fiscal pressure and must change and adapt. It’s a theme we will explore in the months ahead, and try to work out what it means for you"..........
See ya's.
Good point topcropper.
Australia, with its superannuation system, seems better prepared to handle an older population. We have more migrants that keep the population growing & younger as well.
Australia, with its superannuation system, seems better prepared to handle an older population. We have more migrants that keep the population growing & younger as well.
Hope you didn't get that tidbit from the same source that gave you the impression Soros said "sell gold"
You think? Our rate is only 9%. Even if you work 40 years at an average of $50,000 a year you'll only have $250,000 (rough calculation with 5%pa growth). That won't go far.
Now I know after 20 years you'll be earning more but you won't start off on $50,000 either. And that's $250,000 in todays money. It won't be worth much in 40 years time. Even if it's double you'll be in trouble.
We are way behind when it comes to compulsory super. I couldn't find stats. Sorry
You're probably right about super. Contributions are on the low side. In Singapore they are 20%.
I think the govt asked for a review of super contrib and the treasury advised them that they calculated that contrib levels were high enough. Not sure how they worked it out though. That was last year I think.
I think the govt asked for a review of super contrib and the treasury advised them that they calculated that contrib levels were high enough. Not sure how they worked it out though. That was last year I think.
Not sure what it has to do with "Au vs RE" but here's my connection:
increasing super mean decreasing spedable income, which means decreasing borrowings purchasing power, and increasing defaults.
Won't happen for a while imo
increasing super mean decreasing spedable income, which means decreasing borrowings purchasing power, and increasing defaults.
Won't happen for a while imo
that's a good point PB.....as long as what you buy with the loan holds its value when inflation stops.
Thnx.
The idea is that you pay back the loan with devalued dollars after.
So as long as it's not CF- then any inflation works in your favour for the amount of loan you have and RE you own.
As for the underlying asset holding it's value, well that's why I haven't bought much laast few years because I did'nt think it would.
And if it does'nt, and the IP is NG, then it's like a whole stack of leverage hitting you from all sides. Expesnses rise, rates rises, bills rise, value decreases, rents can't keep up, banks won't lend more etc etc.
Hence my conservative approach to LVR last few years. Had I been wrong, it's easy (and better) to buy up again in an established uptrend.
I'm starting to see "inflation" appear in RE mags, but imo it's written about by those who ain't old enough to have lived through it, and can only look at chart & data and make their own conclusions based on never living through it and their predetermined article outcome.
It's easy to look at a chart of the 70's & 80's and extrapolate how RE went up XX% for X years.
But unless you look at the whole financial situation it's useless, meaninless and potentially disastrous.
The 70's are still the second only to the 30s in terms of economic depression.
At the end of the 70's the price shot up as speculation grew feeding on itself.
And then droppped like a rock. So the "experts" reckon that an equivalent bubble should bring a much higher price today adjusted for inflation. How can it get more speculative than that?
In some terms it's true that gold may hold out against inflation, but why would an RE investor by gold and not reduce LVR is beyond me, and can only be speculative.
From www.thepeoplehistory.com/1945.html
How Much things cost in 1945
Average Cost of new house $4.600.00
Average wages per year $2,400.00
Cost of a gallon of Gas 15 cents
Average Cost for house rent $60.00 per month
Average Cost New Car $1,020.00
Mens Shirt $2.50
Now you can say the numbers may just about add up now being avg house 138k, avg wages 72k but where's the cost of holding gold, and a 4% rent yield for property?
And if you leveraged into property at 50% LVR how would it turn out in 2010?
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