The Phaserl


The Gold Top & The Housing Bottom

by John Aziz, Azizonomics:

In April, I noted that I thought the gold bull market is over. Since then, gold has fallen over 10% down to below $1400 today. That’s quite a severe correction.

Today, I found an interesting graphic showing that the gold price peaked out while housing bottomed out, and since then, the two have gone in opposite directions:

Correlation, of course, is not causation, but this is an interesting association. Gold flourished on the back of a deep and severe correction in the housing market. Demand for gold as a countercyclical alternative asset proved very strong in the years when very few other assets and asset classes were performing, and prices soared.

So it stands to reason that a large number of individuals putting their money into gold in the boom years were putting their money there because of risks and losses in other markets and areas, and because of the belief that gold was a safe, antifragile asset for troubled times. In 2011, according to Gallup, a plurality of Americans considered gold to be the best asset class to own — something of a psychological bubble that has been burst as prices have fallen.

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3 comments to The Gold Top & The Housing Bottom

  • aa

    where does this 26 year old weenie get his information. my favorite was a 2011 gallop pole showed that majority of americans considered gold to be the best asset class of 2011. what a crock. i have never talked with anyone who owns any gold and it is commonly quoted that less than 1 percent of americans own any gold. he also said the gold price peaked out while the housing market bottomed out. and just what is going to be the drivers of this robust housing boom? a gutted and off shored manufacturing sector? 23 percent unemployment? ever decreasing wages? minimum wage jobs, an administration that is hostile to small business which creates 70 percent of the jobs. this country is heading toward banana republic status and we are to believe happy days are here again. robust employment with good paying jobs is the number one driver of the housing market so how is a job market on life support going to fuel a housing recovery. I have never heard john aziz say one thing that squared with the facts.

  • aa

    oh and let’s not forget we have the most corrupt government in our history who empower banksters to manipulate all financial markets and will continue to do so until they extract all wealth. this same government empowers monsanto the most contemptible and evil company on the planet. anyone who believes a robust recovery is in progress with gangsters pulling all the levers of power around the world needs to have their head examined.

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