Well, you know what I was writing was a message to post on SI and not a paper for a journal of economics.
I made it reasonably clear that, if you think that the government has lost control over the value of its currency and over the mechanisms for credit creation (as has happened repeatedly in other countries, including at times countries that we think of as fairly well regulated, such as France and Italy), then buying a house with a 30-year mortgage may still be a good idea.
Getting hold of a piece of real estate has been the main means of preserving wealth in Argentina and Brazil for many decades.
I myself would not be willing to make such a large bet against our government as to get myself into a $600,000 mortgage on a house that could drop to $300,000 in value.
But given the current budget deficit, decline of the dollar, trade deficit, and unwillingness of the fed to rein in credit, I am willing to admit that I MIGHT be wrong.
I would say to someone who is thinking about joining buying frenzy for houses right now and who is not already wealthy, "Stay out; save money; do not speculate on anything."
To anyone determined to invest, I would suggest playing commodities through PCRDX, Canadian royalty trusts, and maybe some companies like Inco, Bunge, Teck Cominco.
I also have very heavy bets against the stock markets (using BEARX, RYVNX, and LEAP puts on the QQQs) and against the dollar, and against long term bonds. |
