Dear Mr Rawles,
I pray that God may continue pouring His comfort, love and strength upon you and your family in these difficult times.
My wife and I will finally settle down in Melbourne, Australia in 2010 after years of relocating internationally due to my work – we finally obtained the Australian resident permit! As a result of all the traveling, we have also had to leave all our savings in banks for all these years.
We prefer living in a region to know it well before purchasing property, so we will probably purchase a house sometime in 2010-2011. As many (including yourself) have convinced me of rising gold prices and crashing fiat values in the coming years, it makes a lot of sense to buy Australian gold bullion/stamped bars using our savings, and converting them to cash just before purchasing property.
What is your opinion on this? The worst-case scenario I can see is a minor loss in profitability whereby interests from the bank would have yielded more ‘profit’. As I am risk-averse, there are few ‘investment’ opportunities for me outside of term deposits. Thanks for your advice. Blessings, – David C.
JWR Replies: I cannot comment on the particulars of the housing market in Oz, but it is apparent that the real estate market is far from the recovery stage in the US and presumably in the rest of the English-speaking nations. Here in the States, I suspect that it will be 6 to 12 years before the residential real estate market recovers. But things might be considerably different, Down Under. With that said, if you find a truly retreat-worthy property (say, with a shallow well, defendable acreage with plenty of room for gardens, and that has an exposure advantageous for photovoltaics) and you an buy it below current market prices, then you might consider it. Just keep in mind that prices are likely to continue to drop, and it may be a long time before that investment that will appreciate in value. if you do decide ito park your money in tangibles–and you probably should do just that if you are indeed risk averse–then Australian Mint Kookaburra one ounce gold coins are a good choice. Just be sure to buy ion a “dip” day.