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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (244)7/21/2003 10:06:31 PM
From: Wyätt Gwyön  Read Replies (1) of 110194
 
Gold in this cycle hasn't been purchased with borrowed funds, real estate has and big time

i believe the "equity percent", so to speak, of gold assets is probably in excess of 100% when you consider how much is owned by the unmargined CBs, and add in the shorts.

on the other hand, it's not easy to short a suburban neighborhood, and homeowners' equity in American RE is at an all-time low.

This substantial rate backup will have more impact than most realize

RE sure has a lot going against it. in the near and medium terms, increases in interest rates will take the wind out of the easy money sales. longer term (beyond 2010), increasing gas prices are likely to have a negative impact on large parts of the suburban landscape, which is predicated on car transport relying on cheap oil (which will no longer exist in 2010). on the other hand, perhaps for the same reason urban real estate will trade at an even steeper premium than now.
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