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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 408.24+2.3%Dec 22 4:00 PM EST
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To: THE ANT who wrote (93938)8/28/2012 8:22:14 AM
From: elmatador  Read Replies (1) of 218660
 
Mish made a quick connection between iron ore and RE in Australia as prop for alarm.

Say I am an American who had a house that was worth $100 in 2002.

In 2005 it went to $300.

Reach $500 in 2008.

In 2012 it collapsed to $120. It created a sea of ink in papers and several GB of pages in servers chronicling the collapse.

I still have an asset that is worth what it was in 2002 plus its historical growth price but the world is telling me the world is going to hell.

Let's look what happened:
The prices climbed unrealistically because people started buying assets like the one I ALREADY HAD and was living on it.

People looked to how easy it was to get money to buy a house, bought and where left owing bankers money.
They moved in and started living in a property that was not theirs. It belonged to the banks.

It did well to the economy. Construction companies and their workers, architects, construction materials and furniture companies, banks and people moving the houses from one hand to another, took the gains.

The more people bought the higher the prices went. It was feeding in itself because the economy was doing well because there was a boom in real estate. The Ilaine client was driving a truck transporting cement took a huge mortgage. It became bubble and it collapsed back.

For me I'm unnafected with my house now valued at $120. The cement truck driver was left with a house he never afforded and could not get rid of it since he personalized it too much for his own taste.
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