Vancouver real estate priced in gold ounces!

[Anonymous]

http://youtu.be/j6ZuPmd1whQ



This is the Vancouver, Canada, real estate market, priced in ounces of gold. We see in the 1980's when gold shot up, and interest rates spiked, that property values actually declined in terms of gold. Followed by a market crash. We see the exact same thing happening right now, interest rates can't be brought lower to prop up the Canadian property market--in addition, Canada has no more gold! America has no more gold! The Western world has no gold! This has been workable, as the gold market has usually been traded in the paper futures market. Bullion banks could sell as much gold as they wanted and they would not have to worry about running up because nobody ever demanded the physical. But as the paper markets start to crack, we have more and more people demanding physical gold. JP Morgan and the COMEX are running on empty, and cannot fill the orders for physical gold. It does not matter what the paper price of gold is--if you don't have it in your hands, you don't have anything of value! Gold cannot be suppressed much longer, and this will either destroy the entire paper financial system, or they will have to do something crazy like 20-40% interest rates, in order to detract attention away from gold. This will obviously crash the real estate market.

 

[Thomas Beyer]

Who cares about the gold to real estate relationship. What does it tell me if gold is 40% under or 30% over of "where it should be" ? That gold will go up, or real estate down ?



Both go up and down with inflation, but how much is unclear. Both go up and down with supply and demand.



Gold has no societal value. It just look pretty. It produces no income. It is hard to leverage. yes, it can be a proxy for money. But it cannot be artificially deflated in value like money, thus it has no political value.



Real estate, on the other hand, provides jobs, it has societal value, it provides shelter, it can be leveraged, and it can provide perpetual income for the owner !



There is no real estate bubble in Canada, except some tiny distortions due to overbuilding, in GTA condos and perhaps Vancouver condos, but even those fly off the shelf in good locations close to transit if properly priced.



Buy an apartment building ( or condo or single family home or commercial property) in a solid city in a decent location instead: it is like gold with a yield .. And a far higher return assuming some degree of leverage say 30% down and a 70% mortgage. Was better the last 10, 20 or 50 years and will be better the next 10, 20 or 50 !