Priceless, because I don't see others talking about this.
The problem I have with these charts is the regions are huge and very diverse - Wales has always been several different economies bolted together by geographical accident. Even over the period from 1995 there have been severe effects on these economies (and the demographics of the areas) caused by the external forces of the EU, Welsh Assembley, UK govt and their green policies.
Amazing. But so shrouded in mystery for most people -I only understand it a bit thanks to you -that it’s almost meaningless.
No one is taught the difference between price and value, in fact we are actively encouraged to believe that they are the same thing. Many problems flow from that misunderstanding I think.
The same for inflation. It is, no more no less, the increase in the supply of money. Prices rise because more money is chasing the same quantity of goods and services. With specie-backed currencies, prices fell in Britain, the US etc through the whole 19th century, there was spectacular economic growth and whole societies were lifted out of poverty. Deflation, for over a century, yet we are told deflation must be avoided at all costs.
I believe that's because those at the top make thier money from banking. Inflation is then a positive because the assets the money are secured on will appreciate in terms of the fiat currency. Plus they get the interest payments of course.
I wonder if anyone has done longer term graphs back to when the £ was on the gold standard? Be interesting to see how much house prices changed by in period say 1800-1918
For the US, wtfhappenedin1971.com has loads of graphs. The site does what it says on the tin, showing the effect of Nixon finally breaking any link between the USD and gold.
I have long been a fan of returning to a gold or silver-backed currency, at the very least as a store of value, ever since I bought my house. It is a typical Edwardian terrace. When new it cost around £400 (when a pound was a gold sovereign). When I bought it in 2008, I worked out that the purchase price was approximately the same as 400 sovereigns. Its value in gold was almost unchanged in a century!
That’s when UK house prices peaked (in gold terms). Though gold had moved against the dollar in sterling terms it was still very cheap. The pound was above $2 then.
Actually, though it’s counterintuitive, buying assets at high prices is often a good strategy because new highs normally lead to more new highs.
It also depends on what your existing position is if you don’t own any gold or bitcoin, then in my view you need to get a position if you already have a position, then it’s different
Thanks Dominic - same trend in the WM and hope for the Dorset dream. If nothing else this has maybe persuaded my wife to wear more gold jewellery as her contribution to getting off the fiat standard! 🤣🤣🤣
This a great post Dominic, just stumbled on it. UK average property now down to 120 oz of Gold from the 150 oz all the way back in Jul 24!! Uk property looks very cheap, esp when able to leverage and collect some rent. It's a faff to own compared to gold but given a lump sum now would you just pile into bricks and mortar now or is it a bit more nuanced?
Yes, indeed price and value are very different things.
Dominic Frisby has high value, but you can get him at a very low price
Still cheap at twice the price 😊😊😊
Priceless, because I don't see others talking about this.
The problem I have with these charts is the regions are huge and very diverse - Wales has always been several different economies bolted together by geographical accident. Even over the period from 1995 there have been severe effects on these economies (and the demographics of the areas) caused by the external forces of the EU, Welsh Assembley, UK govt and their green policies.
Still very interesting though, thanks
Stunning charts. They remind us of the strength of gold and the inherent weakness of fiat.
Indeed.
Amazing. But so shrouded in mystery for most people -I only understand it a bit thanks to you -that it’s almost meaningless.
No one is taught the difference between price and value, in fact we are actively encouraged to believe that they are the same thing. Many problems flow from that misunderstanding I think.
Yes, indeed price and value are very different things.
Dominic Frisby has high value, but you can get him at a very low price
Ha ha. I thought that’s a nice thing to say. I wonder who made that comment…then I saw it was you. Fair though.
The same for inflation. It is, no more no less, the increase in the supply of money. Prices rise because more money is chasing the same quantity of goods and services. With specie-backed currencies, prices fell in Britain, the US etc through the whole 19th century, there was spectacular economic growth and whole societies were lifted out of poverty. Deflation, for over a century, yet we are told deflation must be avoided at all costs.
I believe that's because those at the top make thier money from banking. Inflation is then a positive because the assets the money are secured on will appreciate in terms of the fiat currency. Plus they get the interest payments of course.
I wonder if anyone has done longer term graphs back to when the £ was on the gold standard? Be interesting to see how much house prices changed by in period say 1800-1918
Yes there was no debt in the market then and most people rented so the data might not reveal that March. Schroeder’s I think did a study
For the US, wtfhappenedin1971.com has loads of graphs. The site does what it says on the tin, showing the effect of Nixon finally breaking any link between the USD and gold.
Thanks Dominic. Fans of gold pricing may also enjoy this USA site I've used for years. International commodities priced here too. Enjoy
https://pricedingold.com/
Thank you.
I have long been a fan of returning to a gold or silver-backed currency, at the very least as a store of value, ever since I bought my house. It is a typical Edwardian terrace. When new it cost around £400 (when a pound was a gold sovereign). When I bought it in 2008, I worked out that the purchase price was approximately the same as 400 sovereigns. Its value in gold was almost unchanged in a century!
Amazing. What a great story.
Okay, but why the peak in gold per house around 2004/2005? If this is something that could happen a lot, it might be a problem.
That’s when UK house prices peaked (in gold terms). Though gold had moved against the dollar in sterling terms it was still very cheap. The pound was above $2 then.
With gold at peak - it's not a good time to buy it - do you agree?
Actually, though it’s counterintuitive, buying assets at high prices is often a good strategy because new highs normally lead to more new highs.
It also depends on what your existing position is if you don’t own any gold or bitcoin, then in my view you need to get a position if you already have a position, then it’s different
Thanks DF. On looking at it again I have around 10% so perhaps I don't need to buy. But I do like the shiny stuff...
April 2024 %ages - so they will have changed:
PHGP (bought 2015) - 4%
Barrick gold - 1.25%
physical gold - 4%
xbt bitcoin - 0.19%
xbt etherium - 0.14%
That’s mind blowing.
Hi Dominic - I presume that the West Midlands Price / Gold ratio chart follows the trend of the other UK regions? Cheers Stuart
Yes it’s in the article now. It got deleted before.
Thanks Dominic - same trend in the WM and hope for the Dorset dream. If nothing else this has maybe persuaded my wife to wear more gold jewellery as her contribution to getting off the fiat standard! 🤣🤣🤣
This a great post Dominic, just stumbled on it. UK average property now down to 120 oz of Gold from the 150 oz all the way back in Jul 24!! Uk property looks very cheap, esp when able to leverage and collect some rent. It's a faff to own compared to gold but given a lump sum now would you just pile into bricks and mortar now or is it a bit more nuanced?