HousePrices double every X no of years- so last X years went up 300% correction?

Thrugelmir

SilverStandard wrote: »

What about silver not gold?

Like in this video

http://www.youtube.com/watch?v=nXPKdUWd6Lk&feature=quicklist





http://www.moneyweek.com/investments/property/uk-house-prices-will-plummet-look-at-this-scary-chart-14664.aspx

How many ounces of silver for the average UK home?

Regular readers will know that another chart I'm fond of posting, shows the ratio of the average UK House Price to Gold - in other words, how many ounces of gold it takes to buy the average UK home. Tom Fischer of Heriot-Watt University has kindly sent me the same chart, but for silver:

Here is a log version of the same chart.

When silver spiked to $50 in 1980, you could buy the average UK house for one thousand ounces of silver. A thousand ounces of silver now costs about £10,000, while the average UK house is now about £150,000.

If you were a Mastermind contestant then you would fail hopelessly on your choosen subject.

Markets are influenced by factors often at the time undetected or unknown. Not just the basic econmoics of supply and demand. People themselves have agendas. In the same way that the Chinese are currently buying up raw metals, and in effect controlling supply and prices.

The history of silver is dominated by the Hunt Bros. Suggest you take a few minutes to read before amending your sig.

The Hunt Brothers and the Silver Bubble
Brian Trumbore
President/Editor, StocksandNews.com
[FONT=Arial,Helvetica,sans-serif]In 1973, the Hunt family of Texas, possibly the richest family in America at the time, decided to buy precious metals as a hedge against inflation. Gold could not be held by private citizens at that time, so the Hunts began to buy silver in enormous quantity.[/FONT]
[FONT=Arial,Helvetica,sans-serif]In 1979 the sons of patriarch H.L. Hunt, Nelson Bunker and William Herbert, together with some wealthy Arabs, formed a silver pool. In a short period of time they had amassed more than 200 million ounces of silver, equivalent to half the world's deliverable supply. [/FONT]
[FONT=Arial,Helvetica,sans-serif]When the Hunt's had begun accumulating silver back in 1973 the price was in the $1.95 / ounce range. Early in '79, the price was about $5. Late '79 / early '80 the price was in the $50's, peaking at $54. [/FONT]
[FONT=Arial,Helvetica,sans-serif]Once the silver market was cornered, outsiders joined the chase but a combination of changed trading rules on the New York Metals Market (COMEX) and the intervention of the Federal Reserve put an end to the game. The price began to slide, culminating in a 50% one-day decline on March 27, 1980 as the price plummeted from $21.62 to $10.80. [/FONT]
[FONT=Arial,Helvetica,sans-serif]The collapse of the silver market meant countless losses for speculators. The Hunt brothers declared bankruptcy. By 1987 their liabilities had grown to nearly $2.5 billion against assets of $1.5 billion. In August of 1988 the Hunts were convicted of conspiring to manipulate the market.[/FONT]
[FONT=Arial,Helvetica,sans-serif]One other experience in the silver bubble worth noting, according to author Edward Chancellor ("Devil Take the Hindmost"), is the experience of an official at the Peruvian Ministry of Commerce, employed to hedge his country's silver production, who lost $80 million by illicitly selling silver short. Said Chancellor, "Although a relatively small sum for a sovereign nation, it was an omen: the 'rogue trader' had appeared on the modern financial scene."[/FONT]

http://www.buyandhold.com/bh/en/education/history/2000/hunt_bros.html

HAMISH_MCTAVISH

mbga9pgf wrote: »

With Wage inflation of 3% and neutral house prices, it would take 11 1/2 years tro return to the long run trend set from 1940-2000

Well thats an interesting statistic.

Would you care to share the detailed calculation with us? Or will you just be leaving the soundbite up there and expecting us to believe it?

Thrugelmir

HAMISH_MCTAVISH wrote: »

Well thats an interesting statistic.

Would you care to share the detailed calculation with us? Or will you just be leaving the soundbite up there and expecting us to believe it?

I assume the calculation excludes the more recent 7% compound increase from 2000. Something which I noted a while back but property bulls like to overlook. As the real long term average is not 2.9% after adjusted for the credit boom.

Certainly a decade to sort out the current mess doesn't seem unreasonable as a time span.

HAMISH_MCTAVISH

Thrugelmir wrote: »

I assume the calculation excludes the more recent 7% compound increase from 2000. Something which I noted a while back but property bulls like to overlook. As the real long term average is not 2.9% after adjusted for the credit boom.

Certainly a decade to sort out the current mess doesn't seem unreasonable as a time span.

:rotfl:

Ah, I see.....

So the long term average, if you take the start and end data points from WW2 (can't imagine why property prices would be depressed then:rolleyes:) to right after the big property crash of the 90's, would be lower than today.

There are not enough :rolleyes::rolleyes::rolleyes::rolleyes: on MSE to adequately show my disdain for such a flawed calculation. Talk about cherry picking the data points!!!!!!!!!!

Also, it's probably worth mentioning that the major housing indices do not go back as far as 1940, so how would he know? The earliest national average house price data we have is from the early 1950's, which showed average house prices at around 4 times male full time earnings, versus 4.3 times today.

Thrugelmir

HAMISH_MCTAVISH wrote: »

:rotfl:

Ah, I see.....

So the long term average, if you take the start and end data points from WW2 (can't imagine why property prices would be depressed then:rolleyes:) to right after the big property crash of the 90's, would be lower than today.

There are not enough :rolleyes::rolleyes::rolleyes::rolleyes: on MSE to adequately show my disdain for such a flawed calculation.

Talk about cherry picking the data points!!!!!!!!!!

Then for a straightforward read I suggest Niall Ferguson - "The Ascent of Money". Will help fill in some obvious gaps in your knowledge. :beer: