Compeling thoughts. However, the hot money that took down the foreign markets was American money ... and they all ran for the exist at the same time. Too much liquidity ... but everyone is seeing the same future. Fear runs the markets, it is stronger than greed. In a deflationary environment, gold and silver will hold their own ... and as far as real-estate is concerned ... if you own it outright you can't lose. It is always worth something, even the CA's can tell you that as it is the belief of the profession that you CANNOT permanently impair land. CICA handbook. This issue is, what is the "buying" power of the number associated with the asset. So it really comes down to what you owe (debt) not what you own. And yes the rest of the world sees a distorted standard of living in the west ... is it real - No. Hopefully they won't fall into the same trap as many of the players in America. Simply put, if you owe more than what the asset is worth, i.e. market value, do you really control it, or is it an illusion? Vilmuchka
"and as far as real-estate is concerned ... if you own it outright you can't lose."
If that were only true vil. The Govt. can continually raise the property values and reassess the tax bite. If you live on a fixed income of say $3k a month and all of a sudden you get hit with a new $750 a month property tax you could easily lose your home or be forced to sell. Prop 13 withstanding real estate taxes have been on the march and it is how many municipalities are digging their way out of the budget shortfalls of the last few years.
crd, I agree with most of what you said other than the false picture of Western lifestyles. I believe the to 80% of the people in the West live well above 80% of the people in the East. That will change and it will not be because they buy big screen tv's or SUV's it will be by having larger savings accounts and better homes and better infrastructure, hospitals, etc. All things of a less frivolous nature than the consuming mad US consumer.
Good post. May I ask what you think about housing market? It appears the housing market is collapsing while the so-called experts are telling us it's just cooling off and we won't see wild increase in home prices. What do you think of rent? I know people are selling their homes in anticipation of declining home prices and are renting apartments. But I think rent will actually increase and not decrease like what every else thinks because of the exact reason you indicated: increase in property tax. Did rent actually increase during the last depression 70 years ago?