UK in recession, buy in Spain instead?

Pitby

Not sure if this will work, but scroll down the page and look at the one year and five year charts of gold in sterling. Its trully frightening.

http://www.goldpreciousmetals.com/charts_historic_gbp.asp

You should see that gold has gone up 50% in sterling terms in the last year and by 4 times in the last five years. However to be correct gold has not changed in value, gold is money and paper pounds have gone down by 50% in the last year etc.

This message was last edited by TJ222 on 1/29/2009.

Whoops, mixing my recessions up there.  The 90s crisis was when we pulled out of the ERM.  The 80s crisis was the one Maggie pulled us out of (inherited from the Labour party) and she was dead set against the ERM.  It was Major's lot that created the ERM debacle in 1992.  Sorry bout that.

Maybe it's me but are some people missing the point?

Ok! You buy gold, in order to buy gold you have to have money in a bank. When you sell this gold, you have made some money on the gold and your money, plus the extra money goes back into your bank account.

During this period of time that you hoard your gold in a cave, or burry it in the garden, or just purchased gold on the futures market so that you get some pieces of paper that SAY you own gold, can you truthfully say that you have 'enjoyed' your gold?

"Ah yes!  We booked some cheap flights on easy jet and flew out to our gold and had a wonderful week’s holiday sitting on top of it! We do this six or seven times a year and plan to retire to our gold."

or

"Yes! We had a fantastic holiday thanks. We sat around our house and spent two weeks watching the price of gold go up and down and decided to sell our pieces of paper that SAID we owned gold and made some money. Going to do it again next year. Great fun had by all the family."

Property IS a sound investment that you and your family can enjoy for many, many years! It is a tangible asset that can be passed on from one generation to another and during all that time one generates fond memories of the times spent within your home, whether you live there or just go on holiday, it's your home!

However, if you just want to MAKE MONEY, then go and speculate on the futures market like all the other greedy people who just like to make money turn into more money as quickly as possible.

Me, I just want myself, my wife and my family to enjoy our lives together and see our investment grow over a long term, a tangible asset that we can leave to our family , and all the time we USE IT, we ENJOY IT, whilst we LIVE in our house, our home!

So you mean I can't just sit on top of all my gold and pretend to be Midas for a week?  Darn it.  I was so looking forward to lugging those big bars from one end of a cave to the other just to hear that satisfying sliding sound.  That's it, I'll have to flog it all my gold off and do a Gordon by getting the worst possible price I can get.  Oh, just realised, my total gold assets consist of my wedding ring but if I cut off the wife's finger I'll have the wedding ring, engagement ring and eternity ring so I can triple my assets.

And talking of Gordon (which we weren't, but why let anything get in the way of a good thread drift) he was visiting a school in Scotland and the kids were discussing the meaning of words.  The word "tragedy" came up.  "OK," says Gordon, "who can tell me what a tragedy is?"

Little Sue: "If my friend got run over by a tractor in the field and died, that would be a tragedy"

"No," says Gordon, "that would be an accident.

Little Billy "If my school bus went over a mountain and all the kids inside were killed, that would be a tragedy"

"No," says Gordon, "that would be a great loss".  "Anyone else tell me what a tragedy is?"

Little Johnny, "Well, if you were in an aeroplane and a friendly fire missile took it out and killed you and Alistair Darling and half your cabinet, that would be a tragedy"

"Well done," says Gordon, "and why would that be a tragedy?"

"Well," says little Johnny, "it would be a tragedy because it would be no great loss and probably wouldn't be a bloody accident"

Pretty big thread drift here, but seems like fun and vaguely relevant:

One of the most enduring mysteries in cinema history has been solved.

For 40 years, film fans have pondered what happened to Sir Michael Caine's gang at the end of The Italian Job.

The movie ended with the back of the bus laden with gold bullion perched over a chasm in the Alps, and Sir Michael's character Charlie Croker says: "Hang on a minute lads - I've got a great idea."

However, the riddle of how they could have extricated the gold - and themselves - from the cliff-hanger scenario has never been solved - until now.

John Godwin, 39, an IT manager from Godalming, Surrey, beat 2,000 other entrants in a competition organised by the Royal Society of Chemistry (RSC) to work out how it could have been done, in a time limit of 30 minutes.

His strategy is designed to redistribute weight, involving knocking out windows, draining the fuel tank, and loading extra ballast (rocks) on to the front of the bus.

With various windows broken, a member of the team could be lowered from one of them to let the air out of the front tyres, to make the coach more stable.

Croker could then have used an access panel to get to the fuel tank, near the rear of the vehicle, and remove its drainage plug.

One man could then safely leave the coach, and pass ballast in to weigh the vehicle down at the front. The gold could then be moved to the front and taken off.

Mr Godwin adds: "What happens then? Separate problem I suppose, but waiting for a passing motorist and either hijacking (feels quite bad) or buying their vehicle with stolen gold (still feels bad, but less damage and no blood) would see the men on their way to Switzerland..."

The lengths people will go to for gold, eh? (even in fictitious movies!)

My friend Mercedes, who runs an Estate agency in Algeciras, says that there ae lot of gangas ( bargains) at the present moment. I guess it is the same everywhere.  Adn a good negotiation will bring you to a much more reduced price.

Best regards,

Maria

Dear All,

fantastic sunny day but freezing with an East wind coming from somewhere very cold.

Lots and lots of gangas and doom except in Dubai.

Mortgaged up to the hilt, but curiously no negative equity, not a bit of it.

Strange, very strange.

Regards

Norman

TJ222 - this is all going well over my head! I thought the price of gold, was the price of gold, and didn't think of sterling gold or us dollar gold!

All I'm saying is that when I bought my apartment just off Crawford Street, W1 in 1985 for 35,000 sterling (!!) had I spent that 35,000 sterling on gold at the same time (what was it, about 300 US t/ounce?) I believe the investment in the apartment would have turned out to be a better one. Indeed, I sold it for 99,500 sterling in 1988. So what is a one bedroom apartment in central London selling for now, even in this market?

I'll take a 600-700per cent (and that may even be underestimating the market price at the moment) over a 300 percent increase in my investment, over the same period, any day.

Maybe investing in gold coins, etc., is different, I don't know.

I know I'm being very simplistic, but, well, it is Pitby speaking!!

(And Normansands - ask the thousands of people that have been laid off here and can't get jobs and are just leaving their cars - and car loans, loans, any debt! - at the airport as they leave the country about doom and gloom.  I'm sure they think differently to all those interviewed by PM on that show last night!)

http://www.overseaspropertymall.com/regions/middle-east-property/uae-property/dubai-property/dubais-bubble-has-officially-burst/

New prices being cut by 40% - imagine if you had paid full price!

With oil down from 140$ to under 40$ I imagine property is not going to be the only thing going bust.

Pitby

Good question. If you do a bit of research you will discover that gold and silver are the only real forms of money that have stood the test of time, so rather than the price of gold, you should be asking how many ounces you get for a pound or dollar.

The problem with currencies is that its a reverse beauty contest, whilst it may appear that the euro is going up against the pound, in reality both are falling, its just that the GBP is falling faster. Gold shows you what is really going on, the fact that you now get around 40% less gold for your pound indicates how much damage NuLabour is doing to the pound. Sadly I fear its just getting going.

The reason you did well in 1984 was by chance you bought just before a period of above trend growth after the crash of the 80s. You can make money from property but you need to buy when the price is below trend and sell when its above trend. Since the long term trend is a little over 2% per annum, buy and hold is never going to make you money in real terms.

http://www.nationwide.co.uk/hpi/historical/Jan_2009.pdf

Go to page three and look at the long term real house price trend.

Looking at the boom in the late 80s you will see that from the peak in 1989 it took until 1996 for prices to reach a bottom, ie best part of 6 years. So the boom which ended in 2007 will likely not bottom out until 2013.

What you will also notice is that prices don't just return to trend when they boom, they go way way under. Property in Spain and the UK is going to go so much lower than people think as the boom turns to half a decade or more of bust.

Thank you Pitby,

 I think the programme hinted at it  but explained that negativity just was not allowed officially.

A bit like the ex-pat club here but without the same sanctions.

Given your knowledge can you explain Dubai's finances?

I rather thought that they were just spending my petrol money, but I thought the programme suggested that they were dependent on foreign investment, did I mis-hear?

Thanks

Norman

I know this is WAY off thread, and also may be highly controversial.....but did any one else wonder whether The World, four miles offshore, that Dubai is creating, included a Palestine? And if so, being as how Dubai is an Islamic State, and as such should be highly sympathetic to the plight of the Palestinian people, has it never occured to Sheik Moneybags that his obscene wealth could perhaps be put to better use?

Thanks for the explanation, TJ222, and I see your point.  But I also see the Techno's point, in that if you have invested money into a property to live in and use, long term, and not for a quick profit, then there has to be a positive, profitable side to that "investment"?  It's common sense that, unless it's with money you can afford to lose, you don't trade in any commodity believing that you can only make a profit, because it can go either way, obviously.  But if you are investing in property long term, without real thought about how much you are going to sell it for in the future, how do you put a value on your use of that property? If we get over the "profit margin" scenario and look at the utilisation and enjoyment value, how do we put a value on that, especially if we don't want to sell but want to keep our property?  Whether it's 2% pa or 20%, does it really matter to those who are living in or holidaying in their own property?  It's all relative really.  My view anyway!!  I did mention that I wasn't a rocket scientist, didn't I????

Normansands, Dubai hasn't really relied on oil revenue for some time and has very little oil.  It relies heavily on foreign investment and tourism.  Rumours abound here about Abu Dhabi (cash rich and about 100 years of natural gas reserves amongst other things!) already owning the Burj Dubai and other Dubai "assets" by bailing Dubai out.  That said, they apparently have over $250 Billion in assets so aren't worried about their $90 billion debt!  But we all know that an "asset" is only worth as much as somebody else wants to pay for it, don't we????

Ah, but Abu Dhabi still can't buy Kaka, can they?

re: investment, a quick Google reveals that the definition of the term can vary so I think that proves that it's all down to your personal point of view:

investment - the act of investing; laying out money or capital in an enterprise with the expectation of profit (e.g. TJ222)

investment - the commitment of something other than money (time, energy, or effort) to a project with the expectation of some worthwhile result; (e.g. TechNoApe)

investment - the ceremonial act of clothing someone in the insignia of an office; the formal promotion of a person to an office or rank

OK, forget the last one, not really relevant here!

!!  I must admit, when my husband and I saw that report about Man City/Abu Dhabi wanting to by Kaka we both wanted to stick our fingers down our throats!!!  It is just obscene and totally demeans the whole profile of football, or any sport!  They just cannot keep it real can they??  I'm so glad it was turned down.

As the world seems to be falling into disaray and it seems all want to become a policitcian (maybe only for their pensions) I thought the following might be of interest!

SOCIALISM-you have 2 cows, you give one to your neighbour

COMMUNISM-you have 2 cows, the state takes both and seels you some milk

NAZISM you have 2 cows, the state takes both and shoots you

BUREAUCRATISM you have 2 cows, the state takes both, shoots one, milks the other..and then throws the milk away

CAPITALISM you have 2 cows you sell one and buy a bull, your herd multiplies and the economy grows, you sell them and retire on the income

SURREALISM you have 2 giraffes, the government requires you to take guitar lessons

AN AMERICAN CORPORATION you have 2 cows, you sell one and force the other to produce the milk output of four cows , then you hire a consultant to anaylse why the cow has died

WALL ST CAPITALISM you have 2 cows so you sell 3 of them to your publicly liste company using letters of credit opened by your best firend at the bank, then execute a debt / equity swop with a firend who is "arms length away" so that you get all 4 cows back with a tax exemption for 5 cows, the milk rights of 6 cows are then transferred via a third party to an offshore company base din the Caymans which is secrtetly owned by the majority shareholder who sells all 7 cows back to your listed company. The annual report atates that your company owns 8 cows with the option on one more , you sell 1 cow to purchase a new preseidient of the US , leaving you with 9 cows and then expect the public to buy your bull!

A FRENCH CORPORATION you have 2 cows , you go on strike and block the orads because you want 3 cows

A JAPANESE CORPORATION you have 2 cows you redesign them so they are 1/10 of the size of an ordinary cow and produce 20 times as much milk and then create a tv cartoon called "Comkimon" and market it worldwide

A GERMAN CORPORATION you have 2 cows you re-engineer them so that they live for 100 years, eat once a month and milk themsleves

AN ITALIAN CORPORATION you have 2 cows, but you dont know where they are so you go to lunch

A RUSSIAN CORPORATION you have 2 cows you count them and realise that you have 5 cows, you count them again and realise that you have 25 cows, you then stop counting cows andf open another bottle of vodka

A SWISS CORPORATION you have 5000 cows none of them belonging to you and you charge their owners for storing them

A CHINESE CORPORATION you have 2 cows you have 300 people milking them, you claim you have full employment and high bovine productivity, you arrest all newspeople who reported the real situation

AN INDIAN CORPORATION you have 2 cows are truly blessed and look after them very carefully

A BRITISH CORPORATION you have 2 cows , both are mad!

AN IRAQI CORPORATION  everyone especially the usa think you have lots of cows although you ell eveyone you have no cows, no one beleives you so they bomb the crap out of you anyway and invade your country, you still have no cows but at least you are now part of a democracy

AN AUTRALIAN CORPORATION you have 2 cows, business seems to be great so you go for a beer to celebrate

A NEW ZEALAND CORPORATION you have 2 cows the one on the left looks very attractive........................

All in all complete and udder bull*****

(no offence meant to any cows or the countries beholding them)

Not only was it turned down, they got Craig bloody Bellamy instead! Just deserts I say.

Wage caps for footballers, and lower price tickets?

Discuss.

Roberto, just  saw you post re Palestine/the World.  I didn't even know there was a Palestine on the World development!!  But, just so everyone knows how the goverment works here, there are businesses who are instructed to contribute a percentage of their profits to thee Gaza cause!  My friend is a manager of a well know mall here and has received instructions that, during the Dubai Shopping Festival (happens every year and is a big rip off!) they have to contribute a percentage of their profits to Gaza - HAVE TO!  Cannot choose to!  Brings to mind years ago here, when every air ticket you bought contributed 10Dhs to the PLO. 

Spain is more appealing by the nano-second!!

I didn't say there is a Palestine there - I wondered if  there is, and if so, was wondering whether maybe Dubai might invite any who didn't vote for a terrorist organization with the clearly stated intent of provoking a more powerful military neighbour into war, to take up residence there? I would expect any Islamic State, as indeed any humane society, to be sympathetic to the plight of  innocent Palestinians, but I was suggesting perhaps offering a safe refuge for victims, rather than funding a futile war.

See what you're saying Roberto.  But have you ever known the Arab nations to actually unite for a cause (save for exploiting their oil interests or banning certain products because of a cartoon)?  It's just so much easier to offer funds - and not just from their own coffers, but raising it from their residents - and schools!

Getting back on thread, it's interesting to see from posts, dotted around the forum, that people are still buying/planning to buy in Spain, for holiday/permanent residence at some point.  It just goes to show that even with the recent exchange rate pessimism/property price drops (could be the incentive!), etc., it doesn't seem to have deterred those from wanting to buy and relocate there. (I just noticed some new members' posts). 

""The oldest currency also the safest
How would I play the weakness of sterling today? Well, I've recommended it before, but I'll recommend it again - at a time when no currency around the world really shows any signs of being attractive, gold is your best bet for preserving your wealth. It might be denominated in dollars, but all that means is that if the dollar weakens, the gold price in dollars will rise accordingly.

You can buy gold physically through a bullion dealer, or if you like, or you can gain easier exposure to it through a London-listed exchange-traded fund (ETF) such as ETF Securities Physical Gold (PHAU).

As long as uncertainty and fear hangs over the financial markets, it should do well. And when people are no longer crying out for gold, the good news is that your other investments will be doing so well that you won't mind the price of the yellow metal falling.

John Stepek is editor of MoneyWeek""