Property crash on horizon

[airplaneridesrfun]

Retire now and go home, or work 5 more years to make the amount I could lose in the property market? Interest rates are about to rise, and I'm fearful what the goat will bring. Any insight?

[McNugget]

Or.... Sell up?

Book the profits, wait for the crash, re-invest; all while earning.

[Hellenic aviator]

Or take some advise from the 'Oracle of Omaha':

Buy when everyone else is selling.

“We’ve put a lot of money to work during the chaos of the last two years. It’s been an ideal period for investors: A climate of fear is their best friend … Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.”

Don’t buy when everyone else is buying.

“Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance,” The obvious corollary is to be patient. You can only buy when everyone else is selling if you have held your fire when everyone was buying.

Value, value, value.

“In the end, what counts in investing is what you pay for a business-through the purchase of a small piece of it in the stock market-and what that business earns in the succeeding decade or two.”

[Threethirty]

It's game over for the world economy if not this year; then next year. They won't raise interest rates that's nonsense, how the hell can they! They can't even pay off their 18 trillion dollar debt, plus interest and unfunded liabilities now. Besides anything else, the banks that own the Federal Reserve rely on the easy money, they make cash on the spread between the zero per cent rate and the treasury rate, you don't think they will allow this to be cut off do you?!
Oil prices will carry on dropping, the next thing financial instruments linked to oil commodity prices will blow up and it's 2008 again. Why do you think the psychopaths at citi bank just put 333 Trillion dollars worth of derivatives on the FDIC insured tax payer balance sheet in the US. Yes it's all coming down the tracks.
The USD dollar is rising not because it's economy is strong but because it's economy is screwed. Apart from money printing it has nothing. The much talked about American corporate success story is down to share buy back schemes from QE and from working existing employees into the grave. Anyone going back to American carriers is in for a rude surprise.
The USD will be pushed out of energy transactions, the petro dollar will die. More and more are engaging in RMB trade settlements, who the hell wants to do business with a country which has zero financial discipline?! In the end they will not be able to export inflation, nobody's wants worthless T bills in exchange for real goods. The world is going back towards a gold trade standard. If you haven't got gold you're screwed, this is exactly the position western nations find themselves in: Gold sold off, relying on fraudulent paper crap to patch over their fraudulent economies, bailing out bankers mistakes the whole while.
I'm not for one minute saying that the rest of the world is much better, but China still manufactures crap and Russia has raw materials. The US, meanwhile, has shale which is now useless with low oil prices.
As for Hong Kong, well, it's been an obscene bubble for way to long, it's high time reality settled in, delayed only due to rampant money printing since 2008 and the bailing out of zombie banks, alongside mainland Chinese shysters laundering money.

[Frogman1484]

Wow threethirty that is one skewed point of view!

First of all QE ended nearly 12 months ago and started winding down almost 24 months prior to that. So no collapse from that!

The Usa is one of the biggest producers of oil/gas but their economy is not a oil economy like Russia and Saudia . A low oil price will actually play into the USA economy's favour.

If you bought T bills in the past in another currency than you the USD you would have loved the currancy gain. Second, the T Bill pays you 4 % . How much has your gold paid you? If you bought T bonds when the AUD was at 1:1 you would be +20% up. Gold ???

Gold standard will never ever return! Firstly there isn't enough gold to go around to cover all of the debt..so forget about it.
If you bought the S&P index tracker in 2009 you would have doubled your money...gold???
Yes property in HKG will correct sometime in the future just like it did in the past but it will not be the end of the world.

... Off to parknshop to buy more tin food for my survival stash!:ok:

[fdcg27]

There's no sense in letting things like facts get in the way of a good argument to advance down to the local pub.
The US economy entered the firey furnace in 2008 and has now emerged from it. US economic growth is susprisingly strong, and this isn't some sort of illusion.
The EU is not even half way through it, and their journey will be convoluted due to the insane single currency spread over many radically different governments and economies.
Most parts of Asia are only now feeling a little heat.
Anyway, if not for the US market, where do you suppose China and the rest of Asia would dump their goods? If not for the implicit expectation of US protection, how long would the oil bearing sheep national governments of some of the OPEC states survive?
You might ask the government of Kuwait about that.

[crwkunt roll]

Hong Kongs' property crash has been coming for the last 5 years. :zzz:

[B-HKD]

Hong Kongs' property crash has been coming for the last 5 years.

:D:D:D:D:D:D

Kinda early for the yearly Fragant Harbour Doomsday announcement.

[OK4Wire]

I'd rather be 3 years too early than 5 minutes too late.

Froggy: it sounds like it's not just others who have a skewed view! I agree the gold standard won't come back, but only because every government that is broke (all of them?) needs to be able to print money to cover up the cracks.

Yes, one would have doubled their money if one had invested in the S&P500 in 09, definitely more than gold. But you are really just data-mining to suit your case. For example, an investment in the S&P from 07 to now would have yielded a total of 30%, whereas gold in the same time frame managed 35%

[ByAirMail]

Ah, pilots and finances. I paid of an apartment in the time some sat in D.B Plaza predicting the "crash".

[Bangaluru]

Threethirty...... yep
Frogman...... You're in for a surprise. The last few years are an anomaly. Value will return.

[Frogman1484]

ok lets look a lot longer back in history.

1980: Gold price $850, S&P 338

Gold today $1228 S&P 2023

Gold went up by 144% and the S&P 598%

Add the dividends to that and it as they say...it cr@ps all over your gold investment:ok:

No matter how you spin it, Gold is not a good inflation hedge and does not beat a well diversified portfolio on the long term!

As you can see all you needed to do was buy the S&P tracker and you would be better off than gold.

Did you know that gold is only worth 3% of what it was worth during the Roman times.:ok:

[Threethirty]

QE only "stopped" last year, except it didn't. When QE3 was finished in October of last year the bank of Japan picked up the reigns monetising everything in sight. In fact they did this the very day after the announcement of the end of QE, coincidence not. Other than this interest rates are still at the zero bound, this is providing pure monetary heroin for all the speculators in the finance world, borrowing cheap, leveraging to the hilt and booking the profits in the repo market. So no QE hasn't ended, I didn't even mention the buying of treasury bills by the the EU and I'm sure the fed is still shovelling money to banks behind the scenes to get the dodgy derivatives off their balance sheets. The US economy is a basket case, the lies of 3% GDP are just statistical and accounting trickery. Look at the real unemployment rate of 22%, look at all the people on food stamps, look at the number of recent lay offs at coca cola, Sears, CAT, etc. The stock market does not represent the real economy it's phoney. They are trying to hoodwink the masses into thinking that due to the rise that everything is ok but it's not ok. It's being propped up by the Fed in after hours stock buying events, as soon as it looks like it's going to fall the Feds plunge protection team is there to the rescue, must...end...in...green. The 1% are doing well in the US but that was always so, like Bangalaru said we're in for a huge shock, the chickens are about to come home to roost and all of the bogus lies and statistics will be exposed for what they are.

http://www.zerohedge.com/news/2015-01-13/despite-gas-tax-cut-airlines-see-tumbling-traffic-outsource-us-jobs

And finally the plunge protection

http://www.zerohedge.com/news/2015-01-13/meet-person-who-will-determine-if-market-fair

[OK4Wire]

Did you know that gold is only worth 3% of what it was worth during the Roman times

What a load of codswallop!

I'm shooting from the hip here, 'cos it's late and I'm largely piised (and too tired to look up some references), but you are totally wrong.

Gold is WORTH almost exactly the same now as it has throughout history.

One ounce will buy you about the same number of loaves of bread now as it did then; it will buy you a good suit now, as it did in the Roman times.

That's the point: it remains a store of value, in spite of what pieces of paper and promises any government tries to print.

I am quite confident that my successors (should I have any) will be able to spend an ounce of gold in 300 years time anywhere in the world; not so the equivalent USD1230!

[Threethirty]

In 300 years time if we're still here, the USD would have gone down in the history books in terms of how irresponsible nations conduct their finances. I'm sure by then, however, it'll be a totalitarian cash-less society and not a place you'd want to be!

[bringbackthe80s]

Ahahahaha Threethirty you are taking life wayyy too seriously man!
If we really are that screwed then why worry, the whole of the world will be anyway so nothing much you can do, we' ll work something out.
If not -as is very likely!- then keep going and enjoy today instead of formulating dramatic scenarios! Just avoid getting yourselves in a million dollar debt for that nice house or car and go with the flow.

Remember this world is the hands of lobbies, not politicians and surely not people, they love their banks and bonuses, this system will eventually collapse..not soon though!

[Loopdeloop]

airplaneridesrfun, are you new here? We all know that the market increases during CNY and traditionally the "Sky is falling, sell, sell, sell" thread is started in March!

[ACMS]

Oh no not this again??

Honestly do some of you want the world to end? Because you sure as **** talk up the negative crap....

[Boeingrestricted]

Threethirty
"In 300 years time if we're still here, the USD would have gone down in the history books in terms of how irresponsible nations conduct their finances. I'm sure by then, however, it'll be a totalitarian cash-less society and not a place you'd want to be!"

well:
The USD(=FED. REServe) is being OWNED by 5 families literally. It is a private bank and has nothing to do with the US and when JFK tried to implement the silver based USD by executive order 11110 in 1963 to enable to transfer the right to print USA money by the treasury. Well ,I guess you know the rest " a magic bullet ". And no more family bloodline remaining. And they are all German by the way those owners of THE money (just like George Soros, actually gyorgy Schwartz. And the Queen of England/Holland/Spain etc. etc.).

Regarding gold(money) versus fiat currency: well fiat currency is paper, controlled wealth through governments so by trusting them you have no
control over your wealth. On the other hand gold or better money has intrinsic value, rendering the individual to have direct control over her/his
wealth.

Fiat currency solves many issues for governments in order to be able to tax you etc. etc.,

[wheels up]

Quote:
One ounce will buy you about the same number of loaves of bread now as it did then; it will buy you a good suit now, as it did in the Roman times.

...but you can buy a hell of a lot more iPhones now with an ounce of gold than you could during Roman times.

[tommoutrie]

the iClaudius, stevius jobbius's first product

[airplaneridesrfun]

Et to brute! So said the flight crew body of CX to RH as he mentioned they deserve nothing in 2013!

Now, back to housing. Are bank valuations a direct function of purchasing power in Hong Kong (I.e. Interest rates, income, etc), or are they really what they are 'worth'? How can banks in Hong Kong determine what property should be selling for? It seems to me they are more interested in selling long term loans, and if they want the market to crash then they have the tools to facilitate the downturn.

I'm not holding any anonymous user to it, but any educated predictions on where the overall market will be at the end of the year? + 15%, -30%, +100%, -45%?

[Frogman1484]

Nobody can tell you for sure what will happen to the property market in HKG.

All you will have is personal opinion.

My opinion is...it all depends on what happens to the US interest rates. If they go up quicker than expected I think you will see a decline in the price. How much I'm not sure.

[Frogman1484]

Warren Buffett is Right to Hate Gold
By Cullen Roche · Tuesday, September 23rd, 2014

I really liked this piece by Matt DiLallo on why gold is so hated by Warren Buffett. He provides the juicy details, but I’ll give you the quick and dirty rundown:

Gold is an unproductive asset.
Gold is valuable largely because people believe it’s valuable.

It’s not that Buffett is an ideologue or just on some anti gold rampage. I think there are some logical and great lessons to be learned here:

We build wealth by increasing our own production. That is, we become more valuable to others within society when we do things that they find valuable. This is why society rewards great innovators and people who tend to work hard.
Betting on commodities like gold is often a bearish bet against human productivity and innovation. When you buy a block of gold you are essentially buying an insurance asset whose value will increase if the value of dollars collapses or falls. In other words, you are betting directly against the ability of US workers to produce and maintain the value of the dollar.
Betting on gold is largely a bet on faith. That is, you are betting on the idea that someone else will believe gold is more valuable in the future. Although gold is valuable to some degree as a commodity there is also a substantial portion of the population who wants to own gold because it is viewed as money or protection against paper money. I’ve referred to this in the past as a “faith put”, a premium in the price that inflates its value due to sheer faith.

I don’t mean to rant against gold. I just think that there are some fundamental reasons to keep gold in the proper perspective when we consider its value as a portion of our asset holdings. In my view, it’s not the type of asset you want to build a portfolio around due to the aforementioned thoughts….

[Dan Winterland]

As a long term investment, gold will always lose out against others. But treat it like a currency, then you can trade like you would any FOREX deal. Gold used to predictable and you could anticipate the falls and rises quite easily. These days, hedge funds use it as a buffer and there's no doubt that the gold price is being manipulated and consequently much less easy to predict. It's far more of a gamble.

However, it's still possible to make money and there will be a lot of people who made a stack on yesterday's $30 rise. :-)

[Pilot Chris]

$1 worth of gold bought in the year 1801 and held= $55 value in 2014

$1 worth of stock bought in the year 1801 and held= $11,000,000 in 2014.

Gold is good for a temporary hedge only- you can't invest in a commodity, only speculate.

[airplaneridesrfun]

which stock was that?

[Threethirty]

Is that why Germany and Holland just requested all of their Gold back from the Federal Reserve. It is the only investment with value, stocks can be wiped out in an instant.

[Pucka]

Breton woods etc?

[Frogman1484]

Read about the Great Depression and how the gold standard made things worst.
The read about the 1930's in Europe and see how the gold standard made things worst.

Simply put when the people took their notes to the central bank and asked for the gold in return. This caused the bank to raise the interest rates so that they did not run out of gold. We all know that when times are tough the rates should go down not up.

That is one of the many reasons that the gold standard was not a good idea:ok:

[Threethirty]

At least they weren't able to print money in 1933, thanks to the GLD standard, like they do today. In 1933 banks went to the wall just like they should have in 2008.
Switzerland have seen the light, they're basically shorting the euro and going long on Gold.

[Frogman1484]

So, if you are on the gold standard, how do you stimulate the economy if you have a recession or a slowdown?:confused:

[ASH1111]

That's funny, but very telling of this generation. If all you understand, or have been taught is keynesian economics, that would be a logical question. You will be surprised to know there is a whole other side of economic theory that is rarely taught anymore because it puts the control of the economy in the hands of the consumers and free markets, and out of the hands of government printing presses.

My father has two Ph.D's in Economics, and has a very hard time holding tenure at the University because he refuses to teach keynesian economics.

[boxjockey]

An unlinked fiat currency is destined to fail.

box

[Threethirty]

Frogman, QE doesn't revive the economy it boosts the casino otherwise known as the stock market. Only the richest in society have a portfolio, so QE basically finds it's way into the pockets of the already rich. Not sure of this, look at Japan's abysmal track record with QE since the 90's. It's telling that the US did the best economically in the 50's and 60's with no QE in sight but it hadn't shipped most of it's industry to China then of course.

Stock ownership: Who benefits? - Salon.com (http://www.salon.com/2013/09/19/stock_ownership_who_benefits_partner/)

[Frogman1484]

The US left the gold standard in 1933. Every country that was in a deep depression recovered as soon as they left the gold standard. Germany, France and a hand full of European countries stayed on the Gold Standard for another 6 years...we all know how that finished. Spain that was not on the Gold Standard did not have a ressesion!

The Fiat currency system we currenty have is flawed but so is the Gold standard!

[Threethirty]

It was 1971 under Nixon that the dollar broke away from Gold properly.

Why Did the U.S. Abandon the Gold Standard? | Mental Floss (http://m.mentalfloss.com/article/12715/why-did-us-abandon-gold-standard)

[Frogman1484]

this is from your article.

Why did the U.S. abandon the gold standard?

To help combat the Great Depression. Faced with mounting unemployment and spiraling deflation in the early 1930s, the U.S. government found it could do little to stimulate the economy. To deter people from cashing in deposits and depleting the gold supply, the U.S. and other governments had to keep interest rates high, but that made it too expensive for people and businesses to borrow.So in 1933, President Franklin D. Roosevelt cut the dollar’s ties with gold, allowing the government to pump money into the economy and lower interest rates.“Most economists now agree 90 percent of the reason why the U.S. got out of the Great Depression was the break with gold,” said Liaquat Ahamed, author of the book Lords of Finance. The U.S. continued to allow foreign governments to exchange dollars for gold until 1971, when President Richard Nixon abruptly ended the practice to stop dollar-flush foreigners from sapping U.S. gold reserves.

So as you can see the Gold Standard is not the answer for the future!

[Threethirty]

The states is a great country but I think it's political and financial sphere stinks to high heaven. If achieving 18 trillion dollars worth of debt that will never be paid back is a good thing why doesn't every nation do it? Why do you even pay tax dollars with this in mind, after all what's the difference between 18T and 36 when the numbers get this huge. Can you imagine the interest on that debt alone IF interest rates rise.
It will never end, it'll be debt and money printing to infinity and like I said it doesn't revive the real economy, it serves as a get out of jail free card for fat cat bankers and rich stock owners. That's what the USA has become: a corrupt oligarchy, home to bent corrupt politicians/bankers on the take, meanwhile the people who are actually working for a living are getting squeezed big time.
The deficit grew by almost a trillion last year and it shows no sign of abating. I have a hunch that interest rate rises will not happen but if they do it'll be very short lived. Like you said this is a nation built on QE. No one apart from Japan is serious about investing in Treasuries, this leads me to believe the Fed will carry on monetising the debt using QE and zero interest rates, the very definition of a Ponzi scheme. The problem arises when other nations with accounts in the black stop taking the bully seriously. (Edited on the news that the ECB have just launched another round of QE madness, US surely to follow later in the year)

The real US deficit:

http://davidstockmanscontracorner.com/washington-accounting-magic-us-deficit-483-billion-new-borrowing-1-1-trillion/

And here no less than Mervyn King and Greenspan admit QE is useless:

http://www.zerohedge.com/news/2015-01-21/european-central-bank-set-unleash-massive-round-quantitative-easing-central-bank-hea

Finally this is where you're QE money ends up, hint, its not in Joe Six Pack's pocket:

http://www.zerohedge.com/news/2015-01-21/its-1-world-and-youre-not-it-christies-sales-hit-record

[Trafalgar]

I wouldn't worry too much about interest rates. The US debt is so large that any rise in rates (other than a token 1/2 - 1%) would bankrupt them in no time. Rates will probably stay low for years. The only real factor that will affect HK prices is how much excess liquidity is coming into the HK banking system. As long as China does not crater, that won't change much either. I don't see much of a correction in HK prices unless something completely unexpected happens. Possible...but I would bet on a slow increase over the next decade.

[Threethirty]

I agree wholeheartedly.

[Numero Crunchero]

What's that Marc Faber joke? He has predicted seven of the last four recessions. The same goes for predicting property or stock or commodity crashes.

We are in a unique time - all governments are running fiat currencies - almost no government can afford to be held accountable for all its' debts and commitments, like a business would, so for the forseeable future it is quite likely that interest rates will stay incredibly low. It is that, or major governmental defaults on obligations.

So to make predictions of what will happen is not really possible as - frankly - nothing like this has ever happened before? Sure we have had isolated countries print money(Germany 1930s, Zimbabwe etc) but not the US, Japan, and Europe. And China does too both through printing excess Yuan to keep it's USD exchange rate low, and consequently driving up its' own money supply, but also in its on book and off book lending.

So we are living in interesting times - but hey, I have no way of predicting the future either. So I am just going to buy things the day before they crash, like any good pilot would!

Anyone got an Alpaca farm or Vineyard for sale???

[Threethirty]

Pisses me off when these central bank dickheads say they're trying to kick start inflation, have they tried paying for anything recently other than tipping waiters at Davos! Inflation in everything bar oil is very real. Truth is they're trying to inflate away bad gambles from the run up to 2008.

Great articles below Numero:

http://www.zerohedge.com/news/2015-01-22/when-ends-everybody-gets-hurt-and-end-uncomfortably-close

http://www.zerohedge.com/news/2015-01-22/now-begins-greatest-heist-bernanke-bailed-out-wall-street-september-2008

[boocs]

Dent Research - Capitalizing on the Predictive Power of Demographics (http://www.dentresearch.com/)

b.

[OK4Wire]

It's great to see so many Austrians here!

http://en.wikipedia.org/wiki/Austrian_School

BTW, NC, you are no doubt right about the Marc Faber joke, but at least he got some right; how many recessions have the perma-bulls forecast??:ok:

[Frogman1484]

Mark Fabre is a joke! If you listen to him you wouldn't even leave your house as the sky will fall on you.

He might have got luck with calling a few recessions but how many bull markets has he missed? :ugh: