investment

It’s a question worth asking. So we’ll take a look at that in a moment.

But before I do, a quick note on today’s front page of the Australian Financial Review (AFR).

There’s a saying that “The pen is mightier than the sword.” In other words, the written word can be more powerful in its effectiveness than, we assume, stabbing someone.

It’s a nice phrase, but even so I’d rather someone wrote something mean about us than shoved a nine inch blade in our guts.

Anyway, it’s a phrase that should be embraced by the newspaper industry. In fact we’ve a vague recollection that one of the daily UK papers used to use the phrase in its advertising.

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“Poll finds people like ‘free’ money”

Well, that wasn’t the real headline, but it may as well have been.

Both The Age and the News Ltd websites report that 59% of respondents to an AC Nielsen poll approved of the bail out to the banks, the billions spent (and to be spent) on infrastructure projects, and of course the $900 cash bribe.

We’ll assume the first home buyers grant is in there as well.

Interestingly, 52% said they were in a similar position financially as they were last year. While 20% said they were better off.

What do we make of that?

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“Gold still has a strong financial nature and remains an indispensable investment tool…”
– Dr. Zhou Xiaochuan, governor of the People’s Bank of China, writing in the LBMA’s Alchemist magazine, Nov. 2004

CHINA IS A FARAWAY COUNTRY of which we know little. The Isle of Wight, on the other hand, is a small island two miles off England’s south coast where my mother-in-law lives.

And there…between the crumbling fiber-glass dinosaurs of Black Gang Chine and the rain-soaked falconry shows at Robin Hill…chit-chat says England’s baby boomers gave up saving long ago.

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Before I get onto today’s subject, the property debate is still raging on the Money Morning website. There are plenty of comments from those that agree with your editor and those that don’t.

Just so you’re sure, we don’t edit any of the comments providing they are fit for publication. One comment which questioned the legitimacy of your editor’s birth for instance, didn’t make it through!

But other than that, you can write what you like about property or any other subject. Even if it’s to disagree with us.

But one thing is obvious from some of the posts, and indeed the emails we’ve received arguing with our position, is the inability of the property bulls to grasp the concept of an analogy.

Just to set the record straight, we’re perfectly aware that you can eat an apple yet you can’t eat a house – unless it’s a gingerbread house. And we’re also aware few people buy bananas for investment, and that bananas don’t give you a rental yield.

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