Gold and Silver or Property?

[valuecreator]

Hey valuecreator, how far in are we in Kondratieff winter? Midway? I was having another look at the four seasons diagram the other day

Hard to say, hey!

That's the point of all this money printing, can't mesure anything anymore.

I reckon by the amount of debt still in the real economy (the financial one is in la-la land), we're nowhere done yet.

We haven't had a REAL credit event that would push interest rates in the stratosphere, which is the next step.

Sure, I'll loan the suckers a bit of money at 20%.


All I know is when its gonna be over, everybody will be talking about how buying a house is the best way to lose money.

And the magazine covers will pimp the New Gold Rich.

Time to switch to real estate then.

But now gold is so cheap how can you pass on it?

 

[valuecreator]

I'll be dead before then or selling my stash for fiat.

sell gold, buy real estate, when the value is right. don't hold fiat for a second more than you need to.

the old money families call it the rule of 3.

the bulk of their wealth is:

1/3 gold

1/3 property

1/3 fine art

that's the stash.

everything else is to pay the bills.

"Price is what you pay; value is what you get" - Ben Graham

 

[mmm....shiney!]

I'll be dead before then or selling my stash for fiat.

sell gold, buy real estate, when the value is right. don't hold fiat for a second more than you need to.

the old money families call it the rule of 3.

the bulk of their wealth is:

1/3 gold

1/3 property

1/3 fine art

that's the stash.

everything else is to pay the bills.

"Price is what you pay; value is what you get" - Ben Graham

Might have no choice unless I can find value RE before it reaches 50.

Need cash flow in my retirement :/

Or maybe I won't be able to retire :lol:

 

[long88]

we started off with nothing (when we obtain loan, probably save up a deposit), so if the debt lose half its value.. then it is a good side to be on ?

the other problem with all of this things is.. the printing presses runs faster than the rate we earn the money, remember we are being paid in fiat as well.. not gold..

so every month, after you save up... you will find that it takes a lot more fiat to convert to gold/silver.. and eventually you will on the losing side.. as you cant catch on.. especially if you are on fixed income...

so what to do ? better be on the side that will benefit you .. or going against the bankster ?

i know which side i want to be...

the other benefit: if you can find positive cash flow... you can use the monthly earned fiat to help you obtain gold and silver(or anything else, as long as cash flow permit).. that is the best position to be on...

thoughts ?

how about 30 year loan... but the loan is paid off/helped paid by your tenant?

probably start off having to tip some money into the loan, in 1 to 2 years.. the loan become positive, and with the help of inflation.. price of rent goes up.. the process makes money for the landlord and banks... nothing wrong with that? or is this one way to grow poorer? as the landlord will be in debt forever?

remember the wording good debt and bad debt

I hear ya.

But I'm of the opinion that in the winter cycle all debt is bad debt.

read Kondratieff.

What they're doing right now is trying to make the 30's look like the 70's. won't work.


just my opinion.

sure it's nice to have somebody else to pay for your assets, but what's the point if the assets lose half of its value in a few years?

We're wired to think in nominal terms and value assets in funny money.

In the States, after it crashed 50%, investment now properties yield north of 17%.

in nominal terms.

 

[valuecreator]

remember we are being paid in fiat as well.. not gold..

I think that the core of the problem. Since we exchange our most valuable asset (time) for fiat, we have a tendency to value every asset in terms of fiat. Since they have ABSOLUTE control over fiat, they control our perception of asset values.

the fact is you are being paid in gold, or wheat , or oil, or tax vouchers, or woolies vouchers. fiat is just a medium of exchange, not a valuation tool.

for 2 sec. just pretend this a stock. would you buy?

Is oil that expensive after all?

Is corn getting cheaper or more expensive?

 

[bordsilver]

FYI. In case you newer guys haven't seen it s1lv3r has been doing a great running commentary of this topic for the past couple of years.

Skip ahead to about HERE

 

[valuecreator]

Bottom line:

If you sell your gold, I wouldn't buy RE. I would buy food.

"In a fight between yourself and the world, always side with the world." - frank zappa

If you find that you're getting paid less and less gold for the same work, maybe its time for you to change carreer.

 

[valuecreator]

FYI. In case you newer guys haven't seen it s1lv3r has been doing a great running commentary of this topic for the past couple of years.

Skip ahead to about HERE

excellent! Thank you.

I think it's funny that there's so many post in that thread talking about inflation, while the graph clearly show we are in a ongoing deflation (valued in gold).


winter is a bitch.

its all there:

http://www.scribd.com/doc/116141019/Thunder-Road-December

 

[mmm....shiney!]

Bottom line:

If you sell your gold, I wouldn't buy RE. I would buy food.

That is what I would need to sell my gold for, you can't eat gold.

My plan was to sell most of my stash sometime in about 5 - 12 years time and trade it (and borrow $$$) for RE that would bring in a steady stream of income once I'm of retirement age (65). I was hoping the RE market would have corrected by then (5 years), and gold would be trading at about AU$3000oz or more. I'm worried we'll be turning Japanese though before we reach the 100oz of Au for ave home ratio (let alone your 50oz ratio) , if this were the case, I will have to buy a small dog and my superannuation policy plans will be severely restricted. If what you say pans out, that RE will be untouchable for 20 years, then I'll be dipping into my super just to live. A disgusting thought. Blah.

Plan B is buy a commercial property and lease it from our super fund - at least we won't starve (food is our business). Won't leave much of a legacy for the kids but at least I'll have something to do when I'm 73. Although looking after the grandkids and going fishing was what I was thinking more. Oh well, another 25 years of rolling cutlery, I'll be rolling cutlery in my fucking coffin if your 20 year RE outlook comes to fruition valuecreator. :lol:

 

[valuecreator]

very interesting, thanks for sharing that.

I should specify that after a 50% drop in Australia, RE would be good if you wanna rent it and yield 15%. Just that there will be no cap appreciation for a good 10 years. Rents would sky rocket. And that's how RE is supposed to be anyways.

One thing trading taught me is to be ready for any eventuality and to set it up to make money either way.

Even though what I imagine is coming is a MASSIVE wealth transfer (Super + RE kaput), I think it's possible that we chug along kicking the can for waaaay longer anybody can see.
So I'm set up for that as well. It IS possible that RE drops 60% + in real term and nobody notice. (they're already down 20% in 3 years and I see no panic). all the same at the end.

Still I can't shake that feeling that the Gman is about to get nasty, so I have to go with that.

As an aside, I'm house-sitting right now for a guy who was in charge of IT for 10 years for one of the biggest Super funds out there.

Before leaving, he told me that he just cashed in all his Super, penalties and all.

"Do you know something I don't?", I asked him.

He just winked. And the he left for Europe

 

[long88]

that property drop has happened in US, if the end result was cash flow positive.. you achieve that in us property already.

the wealth transfer is already happened. now we are talking about SFR going up in price in most of the state because of the finance easily available + flock of investor coming in...

i know someone who bought SFR, $40k each, now easily reach $100k, and still have the monthly $1000/month rent coming in.

now the million dollar question.... where is the next opportunity...

we can discuss and plot graph of the past.. and find a story that will fit the graph or what you mind want to see, but that doesnt add our wealth.

and "do you know something that i dont" please share...

very interesting, thanks for sharing that.

I should specify that after a 50% drop in Australia, RE would be good if you wanna rent it and yield 15%. Just that there will be no cap appreciation for a good 10 years. Rents would sky rocket. And that's how RE is supposed to be anyways.

One thing trading taught me is to be ready for any eventuality and to set it up to make money either way.

Even though what I imagine is coming is a MASSIVE wealth transfer (Super + RE kaput), I think it's possible that we chug along kicking the can for waaaay longer anybody can see.
So I'm set up for that as well. It IS possible that RE drops 60% + in real term and nobody notice. (they're already down 20% in 3 years and I see no panic). all the same at the end.

Still I can't shake that feeling that the Gman is about to get nasty, so I have to go with that.

As an aside, I'm house-sitting right now for a guy who was in charge of IT for 10 years for one of the biggest Super funds out there.

Before leaving, he told me that he just cashed in all his Super, penalties and all.

"Do you know something I don't?", I asked him.

He just winked. And the he left for Europe

 

[valuecreator]

now the million dollar question.... where is the next opportunity...

IMHO Food, Energy, Water and... Gold juniors.

The fundamentals for potash are just mind-boggling medium term.

why not SFR in Aus soon enough?

I just can't stand tenants. Freaking circus hard to scale up.

 

[long88]

hi valuecreator..

i myself waiting for sfr in aus... if it is making +cash flow.. i will put my name on it...

in terms of fundamentals need for human, it has always been in demand... but whether or not it will make us rich in this life time.. or rise fast enough for us to enjoy the benefit of it.. that's another question..

now the shale oil things in US and UK.. that looks like it will make some new bubble there.. be ready for call options.. or cfd it...

that's where the money to be made (disclaimer: i havent put my money where my mouth said on the shale oil stuff, but property i have a few).

do you have a lot of position in potash, since you mention it ?

now the million dollar question.... where is the next opportunity...

IMHO Food, Energy, Water and... Gold juniors.

The fundamentals for potash are just mind-boggling medium term.

why not SFR in Aus soon enough?

I just can't stand tenants. Freaking circus hard to scale up.

 

[valuecreator]

do you have a lot of position in potash, since you mention it ?

I hear you about the cash flow.

No position. Just finished unloading all the paper. I do not own any single paper asset anymore (besides cash under under the doghouse).

IMO RE is a paper asset.

i'm in the process of figuring out how to sell shovels to the miners and ferts to the farmers.

Shale sure is a hell of a bubble. Hope you have a good exit strategy. Daily reckoning has been doing good work on that.

i'm a strong believer in the compound interest equation. I'm in a situation that as long as I don't lose money, my grand kids are taken care of.

 

[nonrecourse]

Housing/Real Estate

Given its status as a"real" asset, housing/real estate normally outperforms during theinflationary (Summer) period of a long wave. An obvious conclusion, therefore, is that when inflation picks up in this "abnormal" Winter phase, housing/real estate is certainto outperform. However, my sense is that it could be slightly more complicated.Real estate/housing is (generally) a leveraged asset.

Real Estate /housing is generally a leveragedassetDuring previous Summerphases of a long wave, the economy was much less leveraged than it is now. We are inthe midst of Winter and economies are overleveraged, hence even a relatively modestrise in interest rates could risk a significant volume of defaults in this asset class. Aperiod of economic hardship could also limit credit availability with a knock-on effecton the ability of housing/real estate markets to clear.

Commercial real estate could also facefurther challenges from a new round of crisis in the financial services sector and the cannibalisation of the retail sector from therising share of on-line sales. In summary,

In my opinion, prime and near-prime real estate are likely to outperform the sector. It's not just the PIIGS It might be a real asset.but it's also a leveraged one

^^^^^^^^^^^^^^^^^^

There is some merit in this analysis. The ideal gearing ratio with real estate is 30% of your asset base. Bullion is the hedge and a small business with no employees other than direct family is a reciep to survive whatever comes.

Kind Regards
non recourse

 

[Willow]

^^^^^^^^^^^^^^^
plus a fair few points.

 

[Tabbitt]

[email protected] we are cosidering doing this in Vic as a hedge against the SHTF senario, maybe there are other ss members interested.

 

[Tabbitt]

Just mulling the idea of purchasing into agricultural land should the ratios swing favourably towards PMs. If any other young lads (or old too) wanna consider going in a share post transition, hit me up.

We are considering this scenario in Vic as a hedge against a SHTF situation, two of us have sold our houses so this topic is extremely interesting, my gut feeling is that property must drop in 2013, as unemployment rises, I am not an economist, but my view is if Europe is being driven into depression by the bankster cartel, and Europe is China's biggest customer, and a lot of Aus income comes out of selling rocks to China then we must get sucked into the bankster nightmare as well.
In my work I service retail and I have just completed 2 months working through country Vic and its not flash with cash, I think that there will be a lot of lay offs after Christmas and property values will begin to drop as those with too much exposure have to sell. So I think PM's are entering their cycle and RE is moving down, at least in VIC anyway.
PS the amount of prime dairy farms for sale in Gippsland some with oceanviews, was staggering, I haven't seen anything like this in the five years that I have been doing this work. And don't forget that 2013 is the year of the SNAKE, another word for Bankster!

 

[valuecreator]

Know When to Hold 'Em Know When to Fold 'Em

Just too much risk at the top.

pm in one hand, cash in the other for this stage of the game.

in a SHTF you don't want paper promises (that's what property is, a piece of paper with a promise on it)

property rights, like any rights, are in fact privileges. So few understand that in the future freedom will be at a premium.

I don't believe in SHTF or conspiracies, just in business plans.

The one being implemented right now is the transfer of your wealth to the Gman and their bankster owner.

"a small business with no employees other than direct family" is a beautiful thing. under the radar cash flow.

 

[Pirocco]

I doubt this has a universal answer that works well for everybody.
My personal approach was a big stock of spare parts, clothes, food, candles, lighters, anything that doesnt perish or only after a long term, that I can buy already now instead of over some years. I replenish this stock on the fly.
The rest goes to a myriad silver coins, but limited to certain weights and purities.
I would avoid to buy a house as an investment. It's an all or nothing, and the house market is the biggest debt driven market there is, under severe govt regulation and corresponding cost. A jar silver coins, as direct or indirect medium of exchange, bought together by careful buying, appears to me as the best method. Of course, if the price remains at paperdriven up levels, and I accumulate too much euros to feel comfortable, I'll look for other stuff. Ex in past months I bought quite some house stuff. Stuff that everybody can use, so quite marketable - easy to sell or barter.
But as said, that is based on my situation now and expected in the future, not yours. You should be able to figure out a plan for your own case.