The property crash that will never come:

[blackjack21trader]

Until the 1970s, amount of currency in our World was limited by the quantity of gold. This is because in pre-70s, the US$ was pegged to the gold value. During that era, there were few advanced economies like Japan or Hong Kong in Asia. As a matter of factly, there were more under developed economies than developed economies. This system placed a limit on the advancement of technology and the growth in GDP in general. Because there were only such limited amount of US$ allowed in the global system. If you are discerning enough, you would realise the World did not make much advancement in computer technology until after the 70s. And herein lies the answer to this article I am going to enlighten you.

After the termination of US$ against gold, it means that gold is no longer a form of currency limiter. This gave the Central Banks much power to print paper currency. This is good as it removed the cap or limit on the amount of growth of GDP and also the research on the advancement of technologies. From the 70s till 2008, we saw remarkable progress in GDPs of emerging economies all around the globe. Standard of livings was increasing at a rapid rate in economies like China and India. If ever the US$ was still pegged to gold, this would not have happened. And how so ? Simply because there will not be enough US$ to circulate among these emerging economies. This is the arrival of the New Era: Post Bretton Woods.

So, after understanding correctly the function of liquidity in a global system, it would not be difficult to see what will happen next: The Arrival of the Golden Era...2012-2015. Which, I shall continue to explain in further details what is going to happen and describe what is the likely scenario in my next writeup.

To be Continued.

神龙股侠。
nil sine labore!

[DC33_2008]

Look forward to the Golden Era.

Until the 1970s, amount of currency in our World was limited by the quantity of gold. This is because in pre-70s, the US$ was pegged to the gold value. During that era, there were few advanced economies like Japan or Hong Kong in Asia. As a matter of factly, there were more under developed economies than developed economies. This system placed a limit on the advancement of technology and the growth in GDP in general. Because there were only such limited amount of US$ allowed in the global system. If you are discerning enough, you would realise the World did not make much advancement in computer technology until after the 70s. And herein lies the answer to this article I am going to enlighten you.

After the termination of US$ against gold, it means that gold is no longer a form of currency limiter. This gave the Central Banks much power to print paper currency. This is good as it removed the cap or limit on the amount of growth of GDP and also the research on the advancement of technologies. From the 70s till 2008, we saw remarkable progress in GDPs of emerging economies all around the globe. Standard of livings was increasing at a rapid rate in economies like China and India. If ever the US$ was still pegged to gold, this would not have happened. And how so ? Simply because there will not be enough US$ to circulate among these emerging economies. This is the arrival of the New Era: Post Bretton Woods.

So, after understanding correctly the function of liquidity in a global system, it would not be difficult to see what will happen next: The Arrival of the Golden Era...2012-2015. Which, I shall continue to explain in further details what is going to happen and describe what is the likely scenario in my next writeup.

To be Continued.

神龙股侠。
nil sine labore!

[devilplate]

His stocks duno can recover anot.....

[thomastansb]

Property always go up and down. There is no such thing call forever up or forever down. Usually about 10 years for 1 major crash. You can also say that is the amount of time people take to over-spent.

[land118]

think no crash, but minor correction...is what BJ21 is saying

[blackjack21trader]

In order to maintain the high liquidity level in the system to spur growth, interest rates have to be kept low for a considerable period.

This low interest rate environment is a leveraged opportunity cost, that is, it raises the purchasing power of the middle income and narrows the gap between the middle income and the wealthy. How so is it an opportunity cost?

It is an opportunity costs to those who are unable, unwilling or have failed to capitalise on this leverage factor. In short, those that capitalised on this opportunity will have a significant advantage of the lesser ones.

Property assets have their cycle, true indeed. But their current drop will not be below their previous drop. It is of a higher and higher lows after every cycle. The World will sail on by and a significant portion of the middle class will remain in the class due to inflationary asset values in the Golden Era. (2012-2015)

That is why I have no worries about my stock portfolio, which eventually the markets have to factor in this asset inflation rate.

To Be Continued.
神龙股侠。
nil sine labore.

[land118]

yes..., Golden Era - pls come

[buttercarp]

yes..., Golden Era - pls come

Yes, yes.....like the Tang Dynasty which was one of China's Golden Ages, lasted almost 300 years.

[blackjack21trader]

yes..., Golden Era - pls come

Yes, brother land118.. it will come.

Very simple logic as this: Show you an example:

If you have $1M cash, with an inflation rate of 6%,
1 year later, it will be worth $940,000 in real purchasing power terms.

So, is it not logical to take a little risk/some risks to invest in assets like property and blue-chips ?

At least a year later, the capital rise in asset value could help you hedge the inflation rate.

Of course, now the developers are at their weakest taken into consideration the perceived risks level in the global economic environment. But is it not also the best time to bargain the best price for yourself? I know of one smart buyer managed to bargained a $1000psf mass market condo from a developer for only $800psf just a few days ago.

Good Luck.

神龙股侠。
nil sine labore!

[ysyap]

Golden era for buyers or for developers or for everybody? Most agree that 2012/3 might see a price correction in our property prices. Is that golden or just a silver lining in the already sky high property prices?

[blackjack21trader]

Golden era for buyers or for developers or for everybody? Most agree that 2012/3 might see a price correction in our property prices. Is that golden or just a silver lining in the already sky high property prices?

good question- a stimulating query. well, i guess we have to ask if the price is high relative to what or who. relative to disposable income- whose disposable income and how much is it. is the price still relatively high after you put aside inflationary rate or projected inflationary rate of say 5-6 % ?

then after you sold ur current asset, can you find a similar priced asset with similar attributes ? same location ? slightly smaller in size ( not more than 500sqft difference ) ? same neighbors ?

well, i would have to seek inspiration from my third eye. To be Continued.

[land118]

Yes, brother land118.. it will come.

Very simple logic as this: Show you an example:

If you have $1M cash, with an inflation rate of 6%,
1 year later, it will be worth $940,000 in real purchasing power terms.

So, is it not logical to take a little risk/some risks to invest in assets like property and blue-chips ?

At least a year later, the capital rise in asset value could help you hedge the inflation rate.

Of course, now the developers are at their weakest taken into consideration the perceived risks level in the global economic environment. But is it not also the best time to bargain the best price for yourself? I know of one smart buyer managed to bargained a $1000psf mass market condo from a developer for only $800psf just a few days ago.

Good Luck.

神龙股侠。
nil sine labore!

Bro BJ21, I am with you on property (medium-long term) and selected blue-chips ..

[DC33_2008]

You are not wrong to say that. The property trend is obvious. Just have good holding power and leverage on someone's money.

good question- a stimulating query. well, i guess we have to ask if the price is high relative to what or who. relative to disposable income- whose disposable income and how much is it. is the price still relatively high after you put aside inflationary rate or projected inflationary rate of say 5-6 % ?

then after you sold ur current asset, can you find a similar priced asset with similar attributes ? same location ? slightly smaller in size ( not more than 500sqft difference ) ? same neighbors ?

well, i would have to seek inspiration from my third eye. To be Continued.

[Jadey]

Very simple logic as this: Show you an example:

If you have $1M cash, with an inflation rate of 6%,
1 year later, it will be worth $940,000 in real purchasing power terms.

So, is it not logical to take a little risk/some risks to invest in assets like property and blue-chips ?

At least a year later, the capital rise in asset value could help you hedge the inflation rate.!

logical or not, it really depends on timing and also if the price correction is deep enough. If property price doesnt correct by more than 15%, I would rather put my $1m into other assets such as gold and blue-chips, or even penny stocks.

How fast can Singapore property rise within a year? 5%? 10%?, and how many years can it continue to grow as this rate before government intervention?


.

[blackjack21trader]

logical or not, it really depends on timing and also if the price correction is deep enough. If property price doesnt correct by more than 15%, I would rather put my $1m into other assets such as gold and blue-chips, or even penny stocks.

How fast can Singapore property rise within a year? 5%? 10%?, and how many years can it continue to grow as this rate before government intervention?


.

---deleted to protect novice readers----

LOL

[DC33_2008]

Invest 1 million in Gold and Blue Chips now? or you have already put in?

logical or not, it really depends on timing and also if the price correction is deep enough. If property price doesnt correct by more than 15%, I would rather put my $1m into other assets such as gold and blue-chips, or even penny stocks.

How fast can Singapore property rise within a year? 5%? 10%?, and how many years can it continue to grow as this rate before government intervention?


.

[Jadey]

Invest 1 million in Gold and Blue Chips now? or you have already put in?

gold is a cumulative long term invest which I have build up over the years. So far its return is not worst than investing in property actually. only difference is that you cant leverage with gold.

blue chips? Now is not the time

[shauntanzs]

Everyone is talking n waiting for 2012/2013. With so much liquidity waiting on the side line, I do not think the correction will be anything deep. Probably 15% max?

[devilplate]

Either slight correction of 1-5% or a big crash of 20-30%

But i believe not much meat to have big crash.....up another 20% followed by a big crash wud be vy nice

[DC33_2008]

Now gold is $1818. Physical Gold has no dividen but have GST. If US$ drop further. Furthermore

gold is a cumulative long term invest which I have build up over the years. So far its return is not worst than investing in property actually. only difference is that you cant leverage with gold.

blue chips? Now is not the time

[Jadey]

Everyone is talking n waiting for 2012/2013. With so much liquidity waiting on the side line, I do not think the correction will be anything deep. Probably 15% max?

I am waiting for some major shake up in the banking industry. once european banks starts to pull funds out of Asia and Singapore, there will be major retrenchment...prime rental market will collapse, so will price.

[howgozit]

gold is a cumulative long term invest which I have build up over the years. So far its return is not worst than investing in property actually. only difference is that you cant leverage with gold.

blue chips? Now is not the time

Forgive my novice question.

How do you get returns from gold? I thought you need to capitalise the appreciation right? Which brings you back to square 1 before you buy again at a presumably lower price (plus 7% gst with physical gold). If you don't sell but accumulate long term without selling, it is averaging up the price of your holdings.

How is that better than say property or blue chips where apart from capital appreciation there is rental and dividends to be considered.

Thanks!

[howgozit]

If you have $1M cash, with an inflation rate of 6%,
1 year later, it will be worth $940,000 in real purchasing power terms.

So, is it not logical to take a little risk/some risks to invest in assets like property and blue-chips ?

At least a year later, the capital rise in asset value could help you hedge the inflation rate.

The argument of inflation rate is one of the main driving forces that is sending Singaporeans banging on the doors of developers to buy a property.

But if you look at the overall appreciation of Singapore property in the last 5 years, you will see that property price increases far far outstrips the inflation rate. Take note that property prices are not captured in the CPI but rental charges are.

To me, it means that people are paying too much for property. By buying on an uptrend to an already inflated property price we are self-fulfilling the prophecy of "hedging" the inflation. Spelling potential financial disaster in the future.

If our fundamentals are right, we should at least see a tapering or plateu of the property values if not a decline for real wages to catch up before we can see a robust and sustainable growth in the property prices.

[devilplate]

The argument of inflation rate is one of the main driving forces that is sending Singaporeans banging on the doors of developers to buy a property.

But if you look at the overall appreciation of Singapore property in the last 5 years, you will see that property price increases far far outstrips the inflation rate. Take note that property prices are not captured in the CPI but rental charges are.

Y only consider last 5yrs?

Y not consider a bigger picture and longer period from 1997?

[howgozit]

Y only consider last 5yrs?

Y not consider a bigger picture and longer period from 1997?

If consider since 1997, I think property price increase vs inflation is even more dramatic mah....

[devilplate]

If consider since 1997, I think property price increase vs inflation is even more dramatic mah....

Where got....

U taking 2005/06 which is the bottom just before px starts to chiong up.....before tat been flat since 2000

Every yr inflation 3-5% leh

Compounded inflation since 97 will be?

If wana play cheat and make the figures nicer, choose mid 96 whereby ppi was at the peak lor....whahahaha

[devilplate]

Hmmm....did a check....i tink yearly inflation only about 1.5% since 97.....lol

Tats vy low! Hahaha

[howgozit]

Where got....

U taking 2005/06 which is the bottom just before px starts to chiong up.....before tat been flat since 2000

Every yr inflation 3-5% leh

Compounded inflation since 97 will be?

If wana play cheat and make the figures nicer, choose mid 96 whereby ppi was at the peak lor....whahahaha

Ok... hahaha you've got a point.

Btw, the average inflation rate since 1962 is 2.73%, sorry I don't know how far back to go would make a good comparison. I just think that paying an escalating price to "hedge" the inflation of current already inflated prices may not be a good idea. Just my 1cent

[hyenergix]

Singapore is now much more developed, n stable compared to US and EU, even China. An oasis in a desert... A harbour in a storm... We will b attracting more immigrants n hot money.

[kane]

How about measuring property prices relative value against a meal in a food court in the last 10 years?