This is a friendly, interactive exchange of information on all Real Estate related subjects. Follow on Twitter: @RETALKS


Moderator: admin

 
unicas
Real Estate Talker
Topic Author
Posts: 1426
Joined: Mon Feb 25, 2008 10:35 pm
Contact:

$5,000 Gold?

Tue Aug 09, 2011 3:51 pm

The West is close the point where its paper currency system is insolvent, and as a result gold is heading to $5,000 an ounce, according to the manager of a gold fund.

"If you think gold is high (now), wait until all and sundry exit dollar bonds.”

“A paper currency system ultimately ends in insolvency," said Ben Davies, the chief executive of Hinde Capital in an interview with CNBC.com on Tuesday. "We have arrived at this point in the West. So why own worthless paper?”

His belief that gold will hit $5,000 an ounce is not shared by many major players in the market. On Sunday, Goldman Sachs raised its 12-month price target for gold to $1,860 an ounce. In early trading Tuesday, spot gold hit a record $1,778 an ounce, before pulling back.

Goldman based its new target on low-inflation-linked U.S. 10-year Treasury yields , a weaker economic outlook in the U.S., the fact that gold remains well below its 1980s inflation-adjusted highs, and the national debt problems in the U.S. and Europe.

While there are plenty of gold bulls out there, few are as bullish as Hinde. On Friday, Ashok Shah, the CIO of London and Capital, told CNBC that emerging market sovereign wealth buyers looking to reduce exposure to the dollar could push prices significantly higher, but warned it will be difficult to call the level at which prices will level out.

"In essence, where does the clearing price ultimately equilibrate?" said Shah. "I think that's very hard to say.”

Hinde Capital's Davies believes the relationship between Asian exporters and Western debtors has led China and others to shun the U.S. dollar, as America and others attempt to use monetary policy to boost their ailing economies.

“(The second round of quantitative easing) was not a means to try stimulate the economy, although they hoped it would. But the transmission mechanism between markets and the real economy is broken," said Davies. "The real reason for quantitative easing was to stop bond market collapsing—where rising rates would crush an over indebted nation, both state and householders."

On the other side of this relationship are the creditor nations attempting to maintain dollar pegs to assist exports, fueling domestic inflation, according to Davies.

“(The Chinese) attempted to sterilize this currency rise by raising reserve requirements. But it is not working, as seen by the latest Chinese inflation numbers," he said.

Figures last week showed China's inflation rose to a 37-month high in July.

Davies believes the Federal Reserve got it wrong by attempting to pump cash into the system to avoid a liquidity crisis, as, he argues, they were not facing a liquidity crisis but a solvency crisis.

“Policymakers can't grasp the reality that allowing bondholders to default now, although horrendous for economies and employment," is a better option that defaulting later, said Davies.

“Individuals and private institutions are fleeing all fiat currencies into an asset that has no liabilities. This flight from insolvency is an exponential event," he said. "Gold is an inverse function of currency.”

Fiat currencies are those a government has declared to be legal tender, without any intrinsic value or backing by reserves.

“Asset markets lost their funding when (the second round of quantitative easing) ended," said Davies. "Deleveraging has only just begun, but for now I am sure markets will bounce as QE3 arrives globally.”

“If you think gold is high (now), wait until all and sundry exit dollar bonds," he said.
 
FuturePorscheOwner
Real Estate Talker
Posts: 371
Joined: Sun Dec 09, 2007 9:54 am
Contact:

Re: $5,000 Gold?

Tue Aug 09, 2011 5:06 pm

Yes your on to something to unicas, something to what most Goldbugs have been saying for years, including myself.
Gold is the defacto currency, paper money is shit, hence all of the real appreciation in commodities and real assets.

I am bullish on Gold and think that 10,000 isn't out of the question or $15,000.
 
eyesthebye
Real Estate Talker
Posts: 5863
Joined: Tue Jan 06, 2009 2:53 pm
Contact:

Re: $5,000 Gold?

Wed Aug 10, 2011 6:48 am

Yes your on to something to unicas, something to what most Goldbugs have been saying for years, including myself.
Gold is the defacto currency, paper money is shit, hence all of the real appreciation in commodities and real assets.

I am bullish on Gold and think that 10,000 isn't out of the question or $15,000.
gold is not currency - it's speculative. No different than when speculators were buying beanie babies and flipping them when they topped out in value. I don't remember seeing anyone at the grocery store trading beanie babies for vegetables and cereal.
the cure for higher prices is moving to a destination with lower prices
 
User avatar
instigator
Real Estate Talker
Posts: 978
Joined: Thu Nov 26, 2009 11:49 am
Contact:

Re: $5,000 Gold?

Wed Aug 10, 2011 8:58 am

you cant rent gold.

as well i've heard mortgage bonds are relatively safe.
 
User avatar
jesse1
Real Estate Talker
Posts: 5097
Joined: Mon Feb 18, 2008 12:51 pm
Contact:

Re: $5,000 Gold?

Wed Aug 10, 2011 9:01 am

you cant rent gold.
Yes. It doesn't do much but sit there. Even with old boring cash someone's using it for something, even if it's buried in your back yard. True story.
 
azenis
Real Estate Talker
Posts: 90
Joined: Mon Feb 25, 2008 3:48 pm
Contact:

Re: $5,000 Gold?

Wed Aug 10, 2011 3:00 pm

$5000 gold is only possible if USD tanked at least 3:1 vs CDN (assuming CDN stays constant)

But it wouldn't matter at that point since deflation would come before that. A stage where people simply don't spend money. The more you hold, the more valuable it becomes.

Even if I own a lot of gold, I wouldn't want sth like that. What's $5000 good for if no one wants to buy? I'll keep leaving my 3 TT gold bars as decoration. :D

But gold price is so inflated right now... it surpassed the price of Platinum!!

I'd suggest gold holders to assess when would be a good time to take some profit.
Lackltter, my BLOG on economy/RE!
 
User avatar
Lady Luck
Real Estate Talker
Posts: 2310
Joined: Sun Jun 20, 2004 9:51 am
Contact:

Re: $5,000 Gold?

Wed Aug 10, 2011 7:03 pm

I am thinking about finally selling gold and buying real estate in Hawaii. These low prices RE are becoming very attractive. I think that the rental cash flow and appreciation potential will surpass the gains of gold.
 
unicas
Real Estate Talker
Topic Author
Posts: 1426
Joined: Mon Feb 25, 2008 10:35 pm
Contact:

Re: $5,000 Gold?

Wed Aug 10, 2011 8:40 pm

by Lady Luck » Wed Aug 10, 2011 7:03 pm

I am thinking about finally selling gold and buying real estate in Hawaii. These low prices RE are becoming very attractive. I think that the rental cash flow and appreciation potential will surpass the gains of gold.
I am just the opposite, I finally start to think gold rush may have just started. I wish I could unload some real estate to buy gold. I never liked gold as an investment vehicle. But it is how the masses think, regardless right or wrong, that move the market. I think the masses are like clueless ants now, gold is becoming the only sure thing left.
 
eyesthebye
Real Estate Talker
Posts: 5863
Joined: Tue Jan 06, 2009 2:53 pm
Contact:

Re: $5,000 Gold?

Wed Aug 10, 2011 9:42 pm

by Lady Luck » Wed Aug 10, 2011 7:03 pm

I am thinking about finally selling gold and buying real estate in Hawaii. These low prices RE are becoming very attractive. I think that the rental cash flow and appreciation potential will surpass the gains of gold.
I am just the opposite, I finally start to think gold rush may have just started. I wish I could unload some real estate to buy gold. I never liked gold as an investment vehicle. But it is how the masses think, regardless right or wrong, that move the market. I think the masses are like clueless ants now, gold is becoming the only sure thing left.
the moment I buy gold is the moment it starts heading down. Metal, you ought to pray I don't become a gold bug
the cure for higher prices is moving to a destination with lower prices
 
User avatar
vancouverowner
Real Estate Talker
Posts: 266
Joined: Fri Aug 06, 2010 1:21 pm
Contact:

Re: $5,000 Gold?

Thu Aug 11, 2011 8:23 am

by Lady Luck » Wed Aug 10, 2011 7:03 pm

I am thinking about finally selling gold and buying real estate in Hawaii. These low prices RE are becoming very attractive. I think that the rental cash flow and appreciation potential will surpass the gains of gold.
I am just the opposite, I finally start to think gold rush may have just started. I wish I could unload some real estate to buy gold. I never liked gold as an investment vehicle. But it is how the masses think, regardless right or wrong, that move the market. I think the masses are like clueless ants now, gold is becoming the only sure thing left.
I think PMs have a long way to go but I do believe we are near a cycle top.

Interested in hearing what kind of property and where in Hawaii.

Palm Springs is not as nice but I like the fact that you can drive there.
 
User avatar
Lady Luck
Real Estate Talker
Posts: 2310
Joined: Sun Jun 20, 2004 9:51 am
Contact:

Re: $5,000 Gold?

Fri Aug 12, 2011 10:12 am

Interested in hearing what kind of property and where in Hawaii.

Palm Springs is not as nice but I like the fact that you can drive there.

That is a good reason to consider Palm Springs. I really like that Hawaii appeals to international investors and vacationers, it seems like a better hedge to me. Plus I love the ocean and warm breezy climate. I am looking on the smaller islands at ocean view /front condos that allow vacation rentals. It is a challenge finding one that is openly for sale, most are REO bank owned.
 
gse36
Real Estate Talker
Posts: 1451
Joined: Sun Feb 20, 2005 9:20 pm
Contact:

Re: $5,000 Gold?

Fri Aug 12, 2011 11:19 am

Interested in hearing what kind of property and where in Hawaii.

Palm Springs is not as nice but I like the fact that you can drive there.

That is a good reason to consider Palm Springs. I really like that Hawaii appeals to international investors and vacationers, it seems like a better hedge to me. Plus I love the ocean and warm breezy climate. I am looking on the smaller islands at ocean view /front condos that allow vacation rentals. It is a challenge finding one that is openly for sale, most are REO bank owned.
what is wrong with REO bank owned? I thought that would be pretty attractive (in terms of pricing and motivation). I could understand staying away from short sales (hassle, waste of time, etc).

thanks
 
User avatar
Lady Luck
Real Estate Talker
Posts: 2310
Joined: Sun Jun 20, 2004 9:51 am
Contact:

Re: $5,000 Gold?

Fri Aug 12, 2011 4:53 pm

what is wrong with REO bank owned? I thought that would be pretty attractive (in terms of pricing and motivation). I could understand staying away from short sales (hassle, waste of time, etc).
thanks
These properties are often sold "as is" with no disclosure statement. If I was familiar with the building that would be O.K but usually I am not. Learning as I go.
 
tdma800
Real Estate Talker
Posts: 2977
Joined: Wed Jan 23, 2008 9:12 am
Contact:

Re: $5,000 Gold?

Sat Aug 13, 2011 6:42 am

Interested in hearing what kind of property and where in Hawaii.

Palm Springs is not as nice but I like the fact that you can drive there.

That is a good reason to consider Palm Springs. I really like that Hawaii appeals to international investors and vacationers, it seems like a better hedge to me. Plus I love the ocean and warm breezy climate. I am looking on the smaller islands at ocean view /front condos that allow vacation rentals. It is a challenge finding one that is openly for sale, most are REO bank owned.
why would you buy down there? how will you collect the rent? instead get something like this http://www.youtube.com/watch?v=8LL2jyxjk7o ----the only area in Metro Vancouver where there's a growing population and a limit on the building space available.
 
gse36
Real Estate Talker
Posts: 1451
Joined: Sun Feb 20, 2005 9:20 pm
Contact:

Re: $5,000 Gold?

Sat Aug 13, 2011 1:58 pm

what is wrong with REO bank owned? I thought that would be pretty attractive (in terms of pricing and motivation). I could understand staying away from short sales (hassle, waste of time, etc).
thanks
These properties are often sold "as is" with no disclosure statement. If I was familiar with the building that would be O.K but usually I am not. Learning as I go.
Okay thanks thats what I was thinking. But I would think you can still do your due diligence (inspection, etc), and it would probably be more reliable than a disclosure statement?

Of course if you are buying sight unseen it would be more risky.

Who is online

Users browsing this forum: Google [Bot] and 25 guests