Wednesday, 27 July 2011

gold wages and houses

A blogger called Bullion Barron has done a nice (well researched) piece on the relationship between wages expressed in gold (here) and house prices (here),I recommend you toddle over and have a quick read of that.

Mean time I was ruminating on some of the data and wondered if I could do a quick and dirty shift of some of his graphs to fit the same axis of time scale. So here is his data of wage to gold overlaid with house prices in gold

to me the peaks and falls seem to be related. Although there was a period where our salary buying power went up in these units but there was a lag in house prices until 2003. I would wonder if this was when fiscal policy became looser and people began buying with "all that cash" they now had ... bears further investigation that does.

none the less, then the wages (in gold) fell there was a bit of noise in the system before that followed the same logic. Perhaps we need the quivalent of a Schmitt trigger on the logic systems to work that one through?

I hope Bullion Barron doesn't mind me working his data like this....

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