This and That: China Housing Bubble, Gold and more…
If you thought Canada has a housing bubble, this 60 Minutes story on China’s real estate bubble, where entire city blocks, malls and even cities are virtually empty, will make us look like small potatoes. One particularly scary statistic: a typical apartment building in Shangai costs 45 times an average resident’s annual salary.
CBC Television’s DocWorld featured a story called The Secret World of Gold that alleged that the price of gold is manipulated. That may be. But it seems to me that the rise in the price of gold can be traced to the enormous increase in demand from investors. It shouldn’t be surprising, therefore, that the price of gold moves in the other direction when the demand from investors falls.
Some advisors are reported to be experiencing “goldenfreude” or pleasure from the suffering experienced by gold investors this year. Any such feelings may be premature considering that stock prices can plunge sharply as well.
If you need another reminder to get your wills and power of attorney done, here is a story on a wealthy New York resident who died intestate and whose estate could end up going to the state.
The renting v. owning debate is being played out in the wake of discussions around the housing bubble in Canada. Robert Shiller argues in this New York Times column argues that forecasting future housing prices may not be possible. His advice: “it may be wisest to choose the housing that best meets your personal needs, among the choices you can afford”.
“Always look at the productive ability of the asset you are buying, whether it is a farm, apartment house or company” counsels Warren Buffett in an interview with Fortune magazine.
The CBC’s Neil Macdonald takes a critical look at the power wielded by the world’s central bankers and the unintended consequences Quantitative Easing is having on savers. Outgoing Bank of Canada Governor Mark Carney points out that the consequences of high interest rates will likely be much worse.
This column in The New Yorker argues essentially that savers should simply “shut up”. It seems to me a far too unsympathetic attitude towards primarily older savers and pensioners.
Money apparently does buy happiness. A new study contradicts widely held belief that more money beyond a certain point does not make people happier. It suggests instead that the relationship between money and happiness is much more complicated than earlier believed.
The Wall Street Journal featured a story that contained four tips to simplify your portfolio.