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October 9, 2012

Charting Jobs, Housing and Gold

By Louis Basenese of Wall Street Daily

This week, I’m dishing on jobs, since it was a prime focus during Wednesday’s first Presidential debate.
I’m addressing that pesky little rebound in real estate. (It’s gaining momentum.)

And finally, I’m sharing one of the most interesting gold charts I’ve ever seen. I’ll leave it up to you to decide whether or not it’s relevant as gold prices creep closer to $2,000 per ounce.

So let’s get to it…

A Bad Hand in Misery Poker

Both President Obama and Governor Mitt Romney made job creation a centerpiece in Wednesday’s Presidential debate. At least both candidates got the message that jobs – and by extension, the economy – are the most important issues to Americans.

I’ve brought attention to the anemic employment recovery by sharing “The Scariest Jobs Chart Ever” on multiple occasions. Today, I’d like to share another equally depressing chart. It chronicles job losses during other financial crises – in different countries, too.

The pace of the recovery might be painfully slow. But as you can see, if we were playing a game of misery poker, we’d have the worst hand at the table. (Nothing like a little relativism to lessen the sting, eh?)

In other words, it could be way worse. Nevertheless, we still need way more jobs.

Put LL Cool J on Speed Dial

I’ve been ridiculed ever since I suggested back in February that residential real estate was poised for a rebound. Thankfully, only sticks and stones – not name-calling – can hurt me.

The truth is, the recovery is gaining steam. Prices increased for the fourth month in a row, based on the latest S&P/Case-Shiller Home Price Index readings. The rebound is even showing up on the Federal Reserve’s radar.

The latest household net worth data shows an $800 billion increase in the value of real estate through the second quarter of 2012. The uptick reverses the trend of more than five years of declining values. (Can I get a Hallelujah up in here?)

I think it’s safe to go ahead and call it a comeback. No offense, Mr. Cool J.

The Most Interesting Gold Chart in the World

Thanks to the Fed’s recent commitment to keep printing money, gold’s setting new highs for the year. And the newfound love for the yellow metal reminded me of this statement from Warren Buffett’s 2011 letter to investors:
“Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion… You can fondle the cube, but it will not respond.”
If you can’t picture the baseball field, Deutsche Bank’s Daniel Brebner and Xiao Fu put together this handy dandy pictorial. It even breaks out gold holdings by type.

Interesting? Absolutely. Thanks to the popularity of the Jersey Shore and hip hop, it’s clear that jewelry still accounts for the largest portion of gold holdings.

Relevant? Perhaps, since investment demand still only accounts for about 20% of the gold market. I’ll let you make the final determination, though.

Courtesy Louis Basenese at Wall Street Daily (EconMatters author archive here)

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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