jfred, [repeating PM], your friend should have taken up my suggestion in Y2K = sell shack in USA, change to NZ$, buy three houses in Auckland, live in one, use income from others to pay the rental house mortgage [no capital gains taxes in NZ makes that a good move].
It is now time to sell those 3 houses in Auckland, having had a nice 7 years living here, change to yen, buy a few cheap houses in Japan using near-zero interest yen loans, renting them out to tourists and living in one, with southern winter coming up in a few months.
Your friend is two steps behind.
Son's house in NZ, in yen, is now 7 times what it was 4 years ago. That is NOT because NZ is doing well. It's pure boom, pre bust.
Stay 50 metres above sea level and don't worry about tsunamis. They are the same in California as here and a LOT of Los Angeles would go under water with a 50 metre wave bouncing around the Pacific Ocean.
I think you are right that there is going to be a LOT of fun as house prices, interest rates, incomes, rents and hope are adjusted to reality. Helicopter Ben stands ready to defend the realm, slash interest rates and sprinkle money everywhere. Not enough to keep everyone whole, but enough to prevent cascading financial implosion beyond the event horizon into a black hole.
Guessing relative values will be difficult. Maybe house prices will only drop 10%, or 20%, and inflation will take off. It's traditional to rob savers in the interests of financial stability and payments to government spivs.
Mqurice |
