Results 1 to 7 of 7

Thread: The Difference between Gold and Real Estate

  1. #1

    Default The Difference between Gold and Real Estate

    http://libertyisnow.blogspot.com/201...al-estate.html

    The Difference between Gold and Real Estate
    by Alex Merced

    Is there a gold bubble? This seems to be the questions that media pundits are pushing more and more now, so I thought I'd like to discuss some of the fundamental differences between Real Estate and Gold as far as it's bubbliness (I'm making up words). Many people critique gold proponents saying that saying that gold will continue to go up is like the real estate proponents pre-bust saying real estate will always go up so here are somethings to think about.

    Asset Mobility

    Gold is a very mobile assets, I can have it stored and I can carry it around with me no matter where economic activity is moving people geographically. Homes on the other hand are not easily mobile, I just can't pack up my house and take it with me wherever I go. In this case if economic activity moves somewhere else geographically it's hard for me to sell it so I can pursue where growth and jobs are because others are doing the same driving down demand for my particular house. This is a problem that's non-existent with gold.


    Supply

    During the height of the housing bubble there was a lot of housing construction going on which increases the supply which lowers the price of any good, and despite all the inflation from the central banks these last few years the supply is still repricing itself versus the money supply. You can't manufacture gold, it can only be mined and the amount that can be mined is essentially fixed so this kind of inflation of the gold supply is not possible as it was in housing so it's relationship versus the money supply is a one sided relationship mainly changing when money supply changes since the gold supply grows slowly and stable.

    Liquidity

    Gold is fungible (one ounce of gold is generally no different than the next), which makes Gold much easier to trade in markets and base futures, Funds, and other investment vehicles on. This creates a liquidity in the gold market when combined with it's other features makes it a very appealing store of value. Houses on the other hand is a heterogeneous good, meaning every house is a unique product which must find a particular buyer which can be difficult depending on several geographical factors outside of the house itself (neighbors, local schools, local economy).

    Growing Demand

    More and more of countries we thought were part of the third world are becoming industrialized so the access to medical professionals like dentists are increasing and so is the demand for luxuries like jewelry both which use large amounts of gold. Not only is there a growing consumer demand, but also many central banks are beginning to purchase gold and strengthen their reserves as the US Dollar undermines it's reserve currency status which central banks will most likely hold indefinetly reducing the supply of gold effectively for other uses. Houses on the other hand have shrinking demand since there is a glut in the supply from the excessive construction during the boom, and many people rather rent or share living space till economic prospects allow people to expect the ability to maintain a bigger home.


    Overall, in the future some of these factors may change, this the current state of things and as long as this is the case I'll continue hold and purchase gold and other natural resources.
    Alex Merced - A Champion of Freedom
    ------------------------------------------------------------------

    HAYEKFORUMS.COM
    - Economics and Philosophy Discussion and Debate


    ALEXMERCEDFORUMS.COM
    - Libertarian Community and Discussion


    Donate to Help Alex Merced promote Liberty Full Time


    FACEBOOK PAGES YOU SHOULD LIKE



  2. Remove this section of ads by registering.
  3. #2

    Default

    Hey man good post...especially about the supply there. That really does unravel the whole Gold is in a bubble mantra. Supply is fixed....makes all the difference.

  4. #3

    Default

    He gets it. Might I also had, Gold has some strange properties. Maybe there are other reasons it has been held in high regard since before the "Dawn of Man" before "anyone" can remember.

  5. #4

    Default

    The Difference between Gold and Real Estate
    Ya' can't stick 20 acres of land in a suitcase and haul ass.

  6. #5

    Default

    thanks, glad you liked it
    Alex Merced - A Champion of Freedom
    ------------------------------------------------------------------

    HAYEKFORUMS.COM
    - Economics and Philosophy Discussion and Debate


    ALEXMERCEDFORUMS.COM
    - Libertarian Community and Discussion


    Donate to Help Alex Merced promote Liberty Full Time


    FACEBOOK PAGES YOU SHOULD LIKE

  7. #6

    Default

    bump cause of gold drop
    Alex Merced - A Champion of Freedom
    ------------------------------------------------------------------

    HAYEKFORUMS.COM
    - Economics and Philosophy Discussion and Debate


    ALEXMERCEDFORUMS.COM
    - Libertarian Community and Discussion


    Donate to Help Alex Merced promote Liberty Full Time


    FACEBOOK PAGES YOU SHOULD LIKE

  8. #7

    Default difference

    gold is all shiny and real estate is all dull and dirty.
    The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

    "Who would be free, themselves must strike the blow." - Byron

    "Who overcomes by force, hath overcome but half his foe." - Milton






Similar Threads

  1. Gold is Better than owning Real Estate
    By Schifference in forum Personal Prosperity
    Replies: 21
    Last Post: 06-12-2014, 12:43 PM
  2. Where would you buy real estate?
    By Dianne in forum Personal Prosperity
    Replies: 21
    Last Post: 05-14-2013, 04:11 PM
  3. Economic: Real Estate
    By TIMB0B in forum Ron Paul: On the Issues
    Replies: 0
    Last Post: 02-22-2011, 11:41 PM
  4. Replies: 0
    Last Post: 04-09-2010, 10:41 AM
  5. Why the rush to GOLD, and not holding out for Real Estate?
    By Lord Xar in forum Personal Prosperity
    Replies: 20
    Last Post: 10-07-2008, 04:18 AM

Select a tag for more discussion on that topic

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •