Property crash on horizon
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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%?
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%?
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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.
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.
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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….
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….
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. :-)
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. :-)
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$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.
$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.
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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
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
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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.
Switzerland have seen the light, they're basically shorting the euro and going long on Gold.
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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.
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.
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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
Stock ownership: Who benefits? - Salon.com
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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!
The Fiat currency system we currenty have is flawed but so is the Gold standard!
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It was 1971 under Nixon that the dollar broke away from Gold properly.
Why Did the U.S. Abandon the Gold Standard? | Mental Floss
Why Did the U.S. Abandon the Gold Standard? | Mental Floss
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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!
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!
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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.co...-1-1-trillion/
And here no less than Mervyn King and Greenspan admit QE is useless:
http://www.zerohedge.com/news/2015-0...ntral-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/2015-0...les-hit-record
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.co...-1-1-trillion/
And here no less than Mervyn King and Greenspan admit QE is useless:
http://www.zerohedge.com/news/2015-0...ntral-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/2015-0...les-hit-record
Last edited by Threethirty; 22nd Jan 2015 at 16:48.
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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.