Tuesday 14 June 2011

Your Home Priced In Gold Has Declined 80% Since 2001

An interesting perspective on what has been happening to fiat currency, from Business Insider

Gold had a great decade. Housing did not. Put them together and you get a dramatic trend.

The gold it took to buy a house in 2001 -- 600 ounces -- could buy six houses today.

Declining real estate prices continue to be a concern for investors. For some perspective on the magnitude of the decline in home prices, today’s chart presents the median single-family home price divided by the price of one ounce of gold. This results in the home / gold ratio or the cost of the median single-family home in ounces of gold. For example, it currently takes a relatively low 106 ounces of gold to buy the median single-family home. This is dramatically less than the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down over 80% from its 2001 peak (to a level last seen in 1980) and remains well within the confines of a six-year accelerated downtrend and continues to close in on its 1980 trough.

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