Depending on which date you took the exchange rate, it was as low as 66c in Jan 2009 where today its over 103c genx, can you do the housing calculation again in USD and see if it looks more similar to to your gold calculations?
Do you mean price the purchase and sale of the property in USD? Sure.
Assuming a 100 notional.
Quote:
19% for Sydney over 3 years is 6.33% flat which is a compound rate of 5.96%. Which isn't even keeping up with the interest, much less inflation.
So, purchase at 66 USD, sell at 122.57 USD, 28% flat ... something less than that for compounded annually. If I was still in the US, now would be a great time to sell Australian property, lock in those gains. This is exclusive of council rates, depreciation and other expenses and offsets.
Now lets take the same 100 AUD notional and put it in a term deposit. Assume 7%,6% and 5.5% for the three years. Again purchase at 66 USD, withdraw at 123.24, risk free. Again this is exclusive of transaction costs and fees. Looks like the Exchange/Interest Rate Parity holds up.
If you were funding the above investments, I suspect your funding rate would be higher on the property than the deposit.
Yes, I wrote "per year". It was an error on my part. I meant to write "70% over the last 3 years".
Quote:
Gold didn't increase priced in AUD terms over three years. You are correct. However, I never said it did. I didn't specify the currency in my original post. Woops, I made a mistake."
"Whoops, I did it again..."
Twice in one thread. GenX is turning into the Britney Spears of posters.
First of all, I haven't bought the gold yet, I am planning on buying the gold. And yes, when I buy the gold, in Australia, I will be hedging both against inflation and the AUD.
Gold didn't increase priced in AUD terms over three years. You are correct. However, I never said it did. I didn't specify the currency in my original post. Woops, I made a mistake.
You embellished my error with your choice of currency. .... I'll stop pushing your buttons now ...
Woops, I made a mistake.
Indeed.
I don't care what gold you buy or what buttons you thought that you pressed, you made a statement that gold increased by 70% per annum over the last three years. It had nothing to do with what you might do in the future.
I've read several of your posts on other threads. I found them informative. I don't think that you need to resort to any bullshit to get your points across.
I've read several of your posts on other threads. I found them informative. I don't think that you need to resort to any bullshit to get your points across.
Thanks. I was taking aim at sydneyite and went off half cocked.
Promise to stop posting after 11PM so I don't post any more bullshit.
No rule ... just noting that both bulls and bears cherry pick what measurement/timeframe they use so the data fits their conclusions.
I guess you have to choose A timeframe. I also have spent a fair amount of time in the last 15 years not residing in Australia.
I don't really think of myself as a bear, more as a realist, but I guess in the new world of absolutes, if you are not a bull, you must be a bear.
In fact, more than a realist, I am probably a bargain hunter. I never understood why people become more eager to buy as the price goes up. In every other facet of their life, they wait for the price to come down.
They don't wait for televisions to increase in price to start buying. They don't wait for cars to increase in price to start buying. Why do they get so giddy to buy when house prices are going up?
The answer can only be that they believe that the price will continue to go up forever. Why do actual work when all you have to do is borrow money and then receive free money for ever?
Surely this defies the laws of physics. One cannot patent a perpetual motion machine, but you are free to disseminate it's equivalent in the form of a belief in never ending and perpetual capital gain. There should probably be a law against even saying that houses always go up, because it's an obvious fraud.
And now the RBA has lowered interest rates, because the property industry and the speculators and the loan originators want to do what every degenerate gambler in history does when they are losing. They double down. But unlike the degenerate losers that inhabit the Star Casino, who can only lose everything they own, the current crop of degenerates want to use my taxes, and their children's taxes, and my childrens taxes borrowed from the future, just for one last roll of the dice, one last spin at the table. Anything to get that dopamine rush back in their head, just like the first free money they made in the property market.
So, I wait. There will be some kind of reversion eventually. Of course, unemployment might be at 25%, inflation at 22% and my job will require me to say 'Xie xie, ke ren' a lot when it eventually arrives, but arrive it will. Who knows, I may even be a buyer, if the price is right.
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