There is no bubble in the property market, it’s an inflation bubble.
I want to give you an example that proves the problem in the property market is an illusion orchestrated by the Banks and Governments. By working together they fleece the people of their hard earned money, which is by design to keep us on the treadmill for most of our lives. I can give an example that proves that house prices are not rising in price, but in fact the prices are in a long term down trend. In Australia we switched over to a decimal currency system in 1966, to celebrate this event the Royal Australian mint released a round 50 cent coin made of 80% silver and 20% copper, it's weight was 13.28grams. So 3 of these coins have a total combined weight of 39.84 grams, so at 80% silver this gives you total of 31.87 grams or just over 1 troy ounce of silver. The next 50 cent coin minted was in 1969, but this time the coin was a twelve sided coin made of copper and nickel; both have a face value of 50 cents. I will calculate how many silver 50 cent coins it takes to buy the average house based on the silver price of that year, then followed by how many copper/nickel coins it takes to buy the same house. My calculations are broken into 5 year increments starting in 1975. Both these coins have the same legal tender face value of 50 cents and are only separated by 3 years, as no 50 cent coins were minted in 1967 or 1968. So here are my figures.
House price................Silver 50 cent............Copper/nickel 50 cent
1975 - $34,300..............32,156 coins..............68,600 coins
1980 - $68,850..............6,215 coins................137,700 coins
1985 - $88,350..............31,404 coins..............176,700 coins
1990 - $194,000............81,971 coins..............388,000 coins
1995 - $196,750............92,226 coins..............393,500 coins
2000 - $287,000............100,819 coins............574,000 coins
2005 - $520,000............173,333 coins............1,040,000 coins
2010 - $630,000............93,796 coins..............1,260,000 coins
2015 - $750,000............112,500 coins............1,500,000 coins
2017 - $1,124,000.........142,000 coins............2,248,000 coins
2017 Total face value.......$71,000.....................$1,124,000
So as you can see, Sydney house prices have barely budged since the start of the new millennium when priced in silver. Now if you look at the constant acceleration in house prices when priced in fiat dollars you get the sense that house prices only go up, but when priced in silver the same house has been in a downturn since 2005. If you use the face value of the silver coins, then the house price is just a mere $71,000, so the price has not gone up in more than 40 years.
The stark difference of houses priced in silver compared to inflated fiat currency shows the utter destruction of our purchasing power isn’t just scary, it’s down right criminal.
Please leave any questions you may have and I will answer them the best I can.
