Wednesday, January 7, 2009

Gold vs Sterling...

Source: Money Week

 'Why you should hold on to gold'
By Dominic Frisby Jan 07, 2009
...If you look at how gold has traded vs sterling since Gordon Brown sold our gold, you will notice a distinct staircase pattern. It shoots up, then consolidates at the higher level, then shoots up.
Price of gold in sterling
...Based on this repeating pattern, since we have just had a sharp shot up – and this could continue for a short while longer - a period of consolidation is now likely, before the inevitable march to £1,000 an ounce and beyond. But I would not sell a flake of your physical gold yet. It is your insurance - if sterling implodes, you'll need it.

...When measured in gold, this is already the worst house price crash in history

I don't know if this sell-off in sterling has been orchestrated, but it suits the government. The economic downfall doesn't look nearly so bad measured in weakened sterling as it does in, say, dollars. House prices are down some 15-20% from the highs, depending whose figures you use, measured in sterling. But measured in gold, this is already the worst crash in history, as the chart below shows.

UK house prices in ounces of gold

What's more, this crash still has a lot further to go.

In this chart, having risen by the most, London prices look set to fall by the most:

UK, London & Scottish house prices in ounces of gold

No comments: