from Miles Franklin:
Q: My father purchased his first house in 1963. It cost him $25,000 dollars. It was a 3000 sq. ft. home, with four bedrooms and three bathrooms in a new suburb near a large city. Gold was $35/oz. in 1963, so this house cost about 700 ounces of gold. Today a similar home in a similar location in Texas would cost about 190 ounces of gold. If gold is undervalued, why the big difference in ounces?
David Schectman’s Answer:
I have a question for you – is gold undervalued or housing overvalued, or both?
I have written about this several times before. Nine years ago we built a new house. We took out a large mortgage instead of selling gold, which I believed would go up a lot in the next 10 years. I was correct. Gold was $500 an ounce at the time.
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