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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (27102)	2/11/2005 10:42:31 AM
From: GraceZ	Read Replies (2) \| Respond to of 306849

not really. you might as well say that anybody that holds anything but dollars is doing it to short the dollar When you simply buy a TV these days you really don't expect it to be more expensive in the future. This was not true back in the go go days of double digit inflation. You take a short position by borrowing it to sell it. You do this when you think it is high and hope to replace it later when it is cheaper. Why does anyone try to get out of dollars? Because the dollars are depreciating through inflation. Getting out of the dollar is the same as selling the dollar. If one then has no dollars and incurs debt to hold something else that might appreciate, then one sells dollars that one does not have. That is selling short the dollar. So if there's inflation, and there has been continuous inflation for 70 years, then everything that anyone holds is equivalent to selling short the dollar. This includes foreign currencies, commodities, RE, etc. Anything you expect to be worth more than the dollar in the future. This strategy in RE has worked out swimmingly for the last 50 years. Over time mortgage payments shrink in relation to income, shrink in relation to rents (which follow inflation) and are made with cheaper and cheaper dollars as you work your way from pmt 1 to pmt 360. when you say something that broad, it is not really saying anything So when you say we have inflation you aren't really saying anything? When you say we're running out of oil you aren't saying anything? When you say we're taking on huge amounts of debt you aren't saying anything?