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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Mike Johnston who wrote (24354)10/7/2004 1:23:06 AM
From: Mike JohnstonRead Replies (2) of 306849
 
A Good quote from Economist article:
In recent years, many people around the world have found it easier to make money from rising asset prices than from working. Roger Bootle, the managing director of Capital Economics, a London consultancy, calls this “money for nothing”.

Now consider this: if one person gets something for nothing ( purchase of a product or service from real estate gains) then by definition the other person must get nothing for something (in this case a person(s) who made the product receive worthless currency for their labor)

Now, who wants to be that second guy that gets nothing for something.

Bottom line is you cannot expect your house to triple in value and have oil still sell for 25 bucks or a pizza still sell for 7 bucks. If it sells for 7 bucks its quality will certainly be lower, because it will be made by a lousy worker with no experience (the guy with experience wants to ride the wave of the bubble too, instead of toiling in the kitchen)

Bottom line is. You will live in the more expensive house and "feel" richer but you will pay $3 a gallon for gas and will have a lousy neighborhood pizza.

Also by definition: if something is free it is worthless.
If the Fed wants to create the illusion of free money that money has to become worthless.
That just tells you where the dollar is and where it is headed.
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