I met with an estate agent today to look at a few properties. He was very quick to tell me about the rise in UK property prices for the past four months (check Chart if you don't believe him....)http://www.statusireland.com/statistics/property-house-price-statistics-for-ireland/30/Nationwide-UK-House-Prices-United-Kingdom.html
Rather than rehash the same old stuff this article explores if this is a bear trap and also considers the inflation debate. The rise may be a bit of both.
http://www.moneyweek.com/investments/property/uk-house-prices-will-plummet-look-at-this-scary-chart-14664.aspx
I would just like to explore the dream world that is the Irish property market. The more mature UK market tanked 20% in 17 months to €163,000 (£147,746) before starting to climb. This is a more densely populated country with a real shortage of quality housing and strict but unambiguous, compared to Ireland planning laws.
Take the average Irish House price, it climbs to €311,000 and over the past 26 months has drifted slowly down 20% still 50% higher than UK property prices. Last November in our webpage http://www.vimtrading.com/toptips.htm we put a case that €123,375 was fair value.
Fair play to the Irish Government they have created the “soft landing” they predicted in the property market. With all their intervention and now with the monster that is NAMA it looks like it is going to be the long slow grind lower. But we will get there.
One is just being like a protective parent pointing out the benefits of Government butting out and allowing a natural correction. In the end of the day “the people want leadership” and politicians love doing stuff, anything that increases their perceived importance. Meanwhile poor old moaning Paddy will have to experience being raped twice along the way (that is once by buying an overpriced property and continuing to pay for it and then by bailing out the few that are creating and working the system).
I think I will stay renting for a while.
Wednesday, June 10, 2009
Monday, June 1, 2009
Compare gold in the 1970s to the 2000s
Gold multiplied 5 times from 1970 to 1975 $35 - $185.
Gold multiplied 4 times from 2001 to 2008 $256 - $1011.
From 1975 – 1976 there was a 50% retracement bring the price down to $103.50.
In 2008 gold corrected 44% of the 2000 to 2007 move, low $680.
From 1976 to 1980 gold multiplied nearly 7 times from $103.50 to a peak of $710 This parabolic move happened very quickly once the 1975 high was taken out and prices doubled in 1979.
So the question is how high can gold go? If it were to follow the late 1970s panic, prices could quickly go to between $3500 and $4000.
What I thinks is most bullish now about gold is the shallowness of the corrections. As mentioned above the 2008 correction was just 44% and again the recent correction Feb. to April was again just a 44% correction of what we will now label wave 1 of Three. If we are now in a wave 3 of 3 this is the most impulsive wave. Mybest count now is that the correction is over and gold is on its way to making new highs and possibly the parabolic move that many were predicting the last time it hit $1000.
Gold is a fear play and not an inflation hedge as many suggest. If this were so it would not have dropped from $710 in 1980 to $254 in 2001 while the buying power of the dollar halved.
A melt down in the bonds market may be the catalyst for this fear play. http://twitpic.com/6ekns
Gold multiplied 4 times from 2001 to 2008 $256 - $1011.
From 1975 – 1976 there was a 50% retracement bring the price down to $103.50.
In 2008 gold corrected 44% of the 2000 to 2007 move, low $680.
From 1976 to 1980 gold multiplied nearly 7 times from $103.50 to a peak of $710 This parabolic move happened very quickly once the 1975 high was taken out and prices doubled in 1979.
So the question is how high can gold go? If it were to follow the late 1970s panic, prices could quickly go to between $3500 and $4000.
What I thinks is most bullish now about gold is the shallowness of the corrections. As mentioned above the 2008 correction was just 44% and again the recent correction Feb. to April was again just a 44% correction of what we will now label wave 1 of Three. If we are now in a wave 3 of 3 this is the most impulsive wave. Mybest count now is that the correction is over and gold is on its way to making new highs and possibly the parabolic move that many were predicting the last time it hit $1000.
Gold is a fear play and not an inflation hedge as many suggest. If this were so it would not have dropped from $710 in 1980 to $254 in 2001 while the buying power of the dollar halved.
A melt down in the bonds market may be the catalyst for this fear play. http://twitpic.com/6ekns
Tuesday, May 5, 2009
Take Some Responsibility
19/01/09
On the 90th anniversary of the first Dail it may be a time to reflect and value the benefits of having a free and open society. It may also be a time to take a look at who are these people that we are always complaining about and blaming for all our misfortunes.
In a free democratic society such as ours, the Government is just a reflection of us. We who exercised our voting rights all had an input into who represents us and if we are having a problem with their actions, it may be time to exercise this right again and put in place new people, who will reflect where we as a nation want to go now.
A common argument in the past two elections is “we were bought”. On reflection of this it may be more honest to say, “we choose to be bought”. Who in their right mind was going to put in power a Government that was going to stop or control the party we were having? The party is now very much over and we have to bear the pain of the hangover.
We are now also blaming the loose lending policies of the banks. Throughout the most of banking history the complaint was how difficult it is to get money from banks and if we could only get the money what a return we would make. Well we got the money with very few questions asked and we blew it on overpriced property and on consumer goods. Sadly, this is probably the last time for a few generations that such easy credit will be available. Why? Because the vast majority do not know how to use credit so the people most likely to get it in the future are the people that can.
So the moral of the above few paragraphs is simple. TAKE RESPONSIBILITY for your own actions. We were more than happy to take credit for all our Celtic Tiger Successes. It is now time to decide if we want a free and open society where anyone with the desire to succeed can, or go back to a society of being told what to do and be provide for by a crony corrupt over-sized government.
So if we chose the free open society where do we go from here? Some of the complaints we now have about this government are very real. While the majority of people are big enough to say they made poor decisions and are willing to take the pain, it is out of order that the sales people of the scheme i.e. the Government and the bank get off with Golden Parachutes. We must also not accept Local Authorities buying housing from their developer friends for 2007 prices. These are just some of the reflection that we may not like about ourselves.
We must accept quickly that we had a property bubble that is now deflating but not yet burst. Commercial property and housing must correct quickly like the stock market, which is now free to rise if we can show that we are a nation worth investing in. We need to lay down a marker than the New Ireland is not a place that accepts and reward corrupt salespeople and unethical business managers. We must value that we are a hard working productive society and take our learning from the tiger years and produce real economic growth. If we continue to deny reality we will quickly have a brain and body drain to Australia, Canada and the rest of the world.
Individually we need to take responsibility for all the decision we made. We as a nation have milked the last out of the “being oppressed for 800 years” story. Our government is just a reflection of the people it represents. If you don’t like their action, first look at yourself and then at the people around you. We hired them and we can fire them so forget the “we were fooled” rhetoric. Identify the direction you want to go or look for and support a leader with that vision. The majority of us are led by a few. Hopefully there is a visionary out there than can bring together a team to bring our nation to the next growth phase.
Vincent O Connell
Killorglin,
Co. Kerry.
On the 90th anniversary of the first Dail it may be a time to reflect and value the benefits of having a free and open society. It may also be a time to take a look at who are these people that we are always complaining about and blaming for all our misfortunes.
In a free democratic society such as ours, the Government is just a reflection of us. We who exercised our voting rights all had an input into who represents us and if we are having a problem with their actions, it may be time to exercise this right again and put in place new people, who will reflect where we as a nation want to go now.
A common argument in the past two elections is “we were bought”. On reflection of this it may be more honest to say, “we choose to be bought”. Who in their right mind was going to put in power a Government that was going to stop or control the party we were having? The party is now very much over and we have to bear the pain of the hangover.
We are now also blaming the loose lending policies of the banks. Throughout the most of banking history the complaint was how difficult it is to get money from banks and if we could only get the money what a return we would make. Well we got the money with very few questions asked and we blew it on overpriced property and on consumer goods. Sadly, this is probably the last time for a few generations that such easy credit will be available. Why? Because the vast majority do not know how to use credit so the people most likely to get it in the future are the people that can.
So the moral of the above few paragraphs is simple. TAKE RESPONSIBILITY for your own actions. We were more than happy to take credit for all our Celtic Tiger Successes. It is now time to decide if we want a free and open society where anyone with the desire to succeed can, or go back to a society of being told what to do and be provide for by a crony corrupt over-sized government.
So if we chose the free open society where do we go from here? Some of the complaints we now have about this government are very real. While the majority of people are big enough to say they made poor decisions and are willing to take the pain, it is out of order that the sales people of the scheme i.e. the Government and the bank get off with Golden Parachutes. We must also not accept Local Authorities buying housing from their developer friends for 2007 prices. These are just some of the reflection that we may not like about ourselves.
We must accept quickly that we had a property bubble that is now deflating but not yet burst. Commercial property and housing must correct quickly like the stock market, which is now free to rise if we can show that we are a nation worth investing in. We need to lay down a marker than the New Ireland is not a place that accepts and reward corrupt salespeople and unethical business managers. We must value that we are a hard working productive society and take our learning from the tiger years and produce real economic growth. If we continue to deny reality we will quickly have a brain and body drain to Australia, Canada and the rest of the world.
Individually we need to take responsibility for all the decision we made. We as a nation have milked the last out of the “being oppressed for 800 years” story. Our government is just a reflection of the people it represents. If you don’t like their action, first look at yourself and then at the people around you. We hired them and we can fire them so forget the “we were fooled” rhetoric. Identify the direction you want to go or look for and support a leader with that vision. The majority of us are led by a few. Hopefully there is a visionary out there than can bring together a team to bring our nation to the next growth phase.
Vincent O Connell
Killorglin,
Co. Kerry.
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