← Autodidact Archive · Original Dissent · JoseyWales
Thread ID: 19581 | Posts: 27 | Started: 2005-08-12
2005-08-12 00:25 | User Profile
DC housing market "cools off" [url]http://www.washingtonpost.com/wp-dyn/content/article/2005/07/24/AR2005072401133.html[/url]
San Diego too [url]http://www.nbcsandiego.com/money/4830838/detail.html[/url]
Foreclosure rate up 7% nationwide [url]http://www.thecreativeinvestor.com/residential/News387-National_Foreclosure_Rate_Jumps_7_According_to_RealtyTracTM_June_U.html.S._Foreclosure_Market_Report[/url]
inside stock holders of homebuilding companies dumping [url]http://www.newsmax.com/archives/articles/2005/8/9/102902.shtml[/url]
Mortage rates keep upward climb [url]http://news.yahoo.com/s/ap/20050804/ap_on_bi_ge/mortgage_rates[/url]
2005-08-12 04:59 | User Profile
wow, look at this [url]http://patrick.net/housing/crash.html[/url]
2005-08-12 05:30 | User Profile
I'm liquid and ready to pounce!
2005-08-12 05:34 | User Profile
Should I sell and prepare to buy a mansion after the crash?
2005-08-12 13:00 | User Profile
[QUOTE=madrussian]Should I sell and prepare to buy a mansion after the crash?[/QUOTE]
I'd say cash in and wait a year.
2005-08-12 13:27 | User Profile
J.W.: From your link on S.F. housing:
The best summary explanation, from Business Week: "Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken. Caveat emptor."
I lived thru the fifties and sixties when there were low interest rates and strong economic growth. IMO, the above quote is disinformation, for the benefit of the banking establishment.
Bankers have bought from gov't, laws which allow absurd usury rates of interest on loans (and absurdly low rates on savings accounts). They fabricated this myth that when the economy is good and growing, the interest rates have to go up. More profits for the usury bankers.
Getting and staying debt-free and buying gold is something which not only liberates the individual, but if it is practiced wide spread, may force the usury banks to recind their usury policies.
Doing business with a usury bank (which is all of them) should not be an option for a free people.
End of rant.
2005-08-12 13:34 | User Profile
MR: Should I sell and prepare to buy a mansion after the crash?
Only if you can afford the servants and a gardener.
2005-08-12 14:01 | User Profile
[QUOTE=CWRWinger] I lived thru the fifties and sixties when there were low interest rates and strong economic growth. IMO, the above quote is disinformation, for the benefit of the banking establishment.[/QUOTE] That period was made possible, in large part, by the role the American dollar played in the post-war Bretton Woods monetary system. Those circumstances are not likely to be repeated at any time in the near future.
2005-08-12 16:15 | User Profile
[QUOTE=CWRWinger] Only if you can afford the servants and a gardener.[/QUOTE] Hehe, mansion in local terms means a newer detached 4-5 bedroom > 2,500sq.ft on a piece of land large enough not to stare into your neighbors' windows from 3 sides of the house :D
2005-08-12 16:33 | User Profile
Madrussian? if what you have is a house and not a home then do sell and wait, but if you have a home (like I do) then what happen's in the outside does not matter.
If you sell then think of where would you live and how much would you have to pay for rent and also think if there is any disruption in the American way of life and if you would have to wait till everything calms down before buying another house.
:gunsmilie ready to defend my home.
2005-08-12 17:43 | User Profile
[QUOTE=madrussian]Hehe, mansion in local terms means a newer detached 4-5 bedroom > 2,500sq.ft on a piece of land large enough not to stare into your neighbors' windows from 3 sides of the house :D[/QUOTE]
4 or 5 bedroom is indeed a mansion around here.
2005-08-12 18:51 | User Profile
Bretton Woods monetary system
Was it the above system or was it more likely to be the gold/silver standard which gave us low interest and economic health?
With the lose of the gold/silver standard to back currency, all kinds of tax and spend mayhem has taken place. Leaving us with the current sad state of affairs.
Which ever, the Fed'ral Reserve is a criminal cabal which creates artificial economies.
2005-08-12 19:21 | User Profile
[QUOTE=CWRWinger]Bretton Woods monetary system
Was it the above system or was it more likely to be the gold/silver standard which gave us low interest and economic health?[/QUOTE] In the Bretton Woods system, the dollar was pegged against gold (at $35/oz), and the rest of the world's currencies were pegged against the dollar. In practice then, the dollar became the world's reserve currency, since it was supposed to be able to be converted to gold at any time. From Wikipedia --
In practice, however, since the principal "reserve currency" would be the U.S. dollar, this meant that other countries would peg their currencies to the U.S. dollar, andââ¬âonce convertibility was restoredââ¬âwould buy and sell U.S. dollars to keep market exchange rates within 1 percent, plus or minus, of parity. Thus, the U.S. dollar took over the role that gold had played under the gold standard in the [url="http://en.wikipedia.org/wiki/International_financial_system"]international financial system[/url]. Meanwhile, in order to bolster faith in the dollar, the U.S. agreed separately to link the dollar to gold at the rate of $35 per ounce of gold. At this rate, foreign governments and central banks were able to exchange dollars for gold. Bretton Woods established a system of payments based on the dollar, in which all currencies were defined in relation to the dollar, itself convertible into gold, and above all, "as good as gold." The U.S. currency was now effectively the world currency, the standard to which every other currency was pegged. As the world's key currency, most international transactions were denominated in dollars.
The U.S. dollar was the currency with the most purchasing power and it was the only currency that was backed by gold. Additionally, all European nations that had been involved in World War II were highly in debt and transferred large amounts of gold into the United States, a fact that contributed to the supremacy of the United States. Thus, the U.S. dollar was strongly appreciated in the rest of the world* and therefore became the key currency of the Bretton Woods system. *
So the dollar enjoyed a boost from the Bretton Woods system, but it was temporary. As the US economy cooled and ran into recession, the gold peg could no longer be maintained, and the US abandoned convertability to gold. The Bretton Woods system thus benefited the US economy, but it was the result of a one-time confluence of events that will likely not be repeated. The gold standard is the right choice for a stable system.
2005-08-12 19:33 | User Profile
[QUOTE=Quantrill]
So the dollar enjoyed a boost from the Bretton Woods system, but it was temporary. As the US economy cooled and ran into recession, the gold peg could no longer be maintained, and the US abandoned convertability to gold.
The Bretton Woods system thus benefited the US economy, but it was the result of a one-time confluence of events that will likely not be repeated. The gold standard is the right choice for a stable system.[/QUOTE]
Since gold is worth a lot more than $35/oz it was all meaningless anyway.
2005-08-12 20:26 | User Profile
I remember back in Cuba in the old days where my dad had a home in town, we used to live in the sugar mill with free rent, the town hourse was a three bedrooms, dinning room, living room one bathroom and kitchen and the rent was $11.00 per month.....that means that with gold at a standard of $35.00 you could pay for three months .
Rent now days is an average of $750.00 therefore gold should be around $2,500 per. Something wrong with this picture.
2005-08-12 20:33 | User Profile
It is not like rent and gold are pegged to each other. If you have a settlement with 20 houses and 10 people, rents are going to be different than the same settlement with a 200% increase in population, and if the entire world starts investing in the housing in the settlement with an eye toward selling 5 years hence at a enormous profit, then the price of the home is going to further increase, irregardless of the price of an oz of gold.
2005-08-13 00:05 | User Profile
From what I can see the real estate market is softening in the mid-west.
Naturally, rising interest rates are taking their toll. But, the price of gasoline is also having an impact.
White flight has people driving an hour or two to work, as the cost of living in an all White or close to it school district & residential area.
For example, I live in a 99.5% White School District, and in a 99.9% White residential area. Many of my neighbors drive at least one hour to get to work. That means at $2.50 a gallon their commutes are starting to get expensive.
2005-08-13 01:09 | User Profile
B: It is not like rent and gold are pegged to each other.
Gold is universal, it's forever. Rent and real estate can be inflationary and prices differing neighborhood to neighborhood.
2005-08-13 01:22 | User Profile
[QUOTE=CWRWinger]B: It is not like rent and gold are pegged to each other.
Gold is universal, it's forever. Rent and real estate can be inflationary and prices differing neighborhood to neighborhood.[/QUOTE]
Gold can be inflationary too as it was for the Spanish during their halcyon days. I understand most of it ended up in China.
2005-08-13 01:31 | User Profile
Gold can be inflationary too as it was for the Spanish during their halcyon days.
Gold today at $400/oz + buys almost exactly the same goods and services when it was $35/oz. Gold is consistent in what it purchases. The exchange currency (fiat currency in the USA Empire) is what goes all over the place.
The Bretton Wood monetary system depended upon gold/silver. Gold and silver do not depend upon Bretton Wood.
2005-08-13 01:43 | User Profile
[QUOTE=Bardamu]Gold can be inflationary too as it was for the Spanish during their halcyon days. I understand most of it ended up in China.[/QUOTE] Yes, Spanish policy in that area was short-sighted. They lost money in other ways, too. The landlords closed off a lot of land for raising wool. In addition to having to import grain as a result, Spain lacked a domestic textile industry. So they uneconomically exported wool to the Low Countries at a very low price, and then purchased back the expensive finished product.
2005-08-13 02:25 | User Profile
[QUOTE=robinder]Yes, Spanish policy in that area was short-sighted. They lost money in other ways, too. The landlords closed off a lot of land for raising wool. In addition to having to import grain as a result, Spain lacked a domestic textile industry. So they uneconomically exported wool to the Low Countries at a very low price, and then purchased back the expensive finished product.[/QUOTE]
You know more about it than me. What were they buying from China, anyway? Tea, ceramics?
2005-08-13 04:34 | User Profile
A lot of luxury goods, like silk among other things. The people of Spain did not gain much, if anything, from the influx of precious metals, the rich landowners, who were exempt from most taxes, used the money to indulge themselves. Spanish society, and consequently their economy, was for and by soldiers; Don Quixote was not a far fetched character to the people of then contemporary Spain. Such a set up led to an economy based in large part on pillage, gold accounted for 96% of exports to Spain from their American colonies. They were not developing "middleman" style trade, like the Dutch, manufacturing like the English and Flemish, or even the semi-capitalistic agriculture for export (except for their wool trade, which I noted was a net loss), which might be found in various places in Europe.
2005-08-13 17:25 | User Profile
Robinder? I sure as hell would have like to have had you as one of my teachers when I was a kid.
2005-08-16 17:50 | User Profile
[url]http://money.cnn.com/2005/08/15/real_estate/buying_selling/markets_set_to_fizzle/index.htm[/url]
Only in about 20 metro areas, mostly located in eight states, does the relationship of home price to income defy logic, according to Chen. The bad news is that those areas accounts for roughly half the value of all the housing in the country.
2005-08-16 18:35 | User Profile
[QUOTE=Bardamu]Since gold is worth a lot more than $35/oz it was all meaningless anyway.[/QUOTE] It was probably a reasonable price when they initially set the peg, but dollar inflation eventually led to the point where no one could go on pretending that it was worth the amount of gold that it was claimed. That is precisely why the US ended convertability to gold. In the 1920s, an oz of gold was about $20, and that would buy you a fine men's suit. Now, an oz of gold is about $435, which will still buy you a nice suit, while $20 will hardly buy you a night at the movies.
2005-08-17 10:14 | User Profile
[URL=http://news.yahoo.com/s/nm/20050816/us_nm/economy_housing_shirts_dc]Yahoo![/URL]
"Mr Housing Bubble" shirts strike chord, draw ire
Striking a chord with uneasy U.S. property investors, T-shirtHumor.com's latest design -- "Mr. Housing Bubble" -- has become its best seller in less than a week.
The parody of the decades-old Mr. Bubble bath foam package offers a "Free Balloon Mortgage Inside." But the smiling pink house-shaped bubble also warns: "If I pop, you're screwed."
A disclaimer at the bottom reads, "Not affiliated with Mr. Internet Bubble."
Anthony Phipps, T-shirtHumor.com communications director, said the Austin, Texas-based t-shirt design and marketing firm has sold hundreds of the $20 cotton shirts since they went on sale last week.
He said the design had the right mix of market timing and dark humor.
"I think it's pretty clear that there are a lot of people in fear over the potential of a housing bust," Phipps said. "A lot of individuals have made some interesting moves financially with interest-only mortgages and the idea of suddenly having all that equity disappear is something that scares home buyers and policy-makers alike."
But the Realty Times newsletter chafed at the notion that real estate prices have reached unsustainable levels, declaring in a headline, "Mr. Housing Bubble T-shirts Indicate Market Confusion."
Arguing that Americans are widely benefiting from adjustable-rate mortgages that make monthly payments more affordable, columnist Blanche Evans said some pundits in the financial press were simply trying to scare real estate investors into shifting their money back into stocks.
Even Federal Reserve Chairman Alan Greenspan, with his recent ominous talk about froth in some U.S. housing markets, has not been able to slow an eight-year housing boom that has absorbed one-third of the nation's investment wealth, Evans wrote.
"Mr. Housing Bubble may get a lot of washings before it wears out," she said.
Phipps' response: "If this thing does pop, a lot of people are going to need an affordable shirt to wear."