Armstrong, Thank for you the great post “The Future – Putting it All
Together”. It helps a lot to get a good overview, considering everything
is connected. One question, you say “Real estate is nice for some part
of a cash holding, but it is taxed to hold it and it is not liquid.”
regarding where to put your money when it all comes crashing down with
the Sovereign debt crisis. Is this just for risk management, considering
we are currently in a long wave down from 2015.75 to 2032 in real
estate? Referring to your forecast on the real estate market. Also is
this model for the US only, or global?
There are two types of investment – the hedge and the speculation. The
overall real estate is in a decline. A friend of mine in the business
said more than 33% of the houses in New Jersey would all come on the
market if prices ever got back to 2007 levels. The areas that has risen
sharply when looked at closely are those attracting foreign capital.
This is the hedge trying to get off the grid. They are often buying
places and not even renting them out as in Scandinavia. We even see some
of that in Dubai. This is money simply parking.
The real estate cycle peaked and it is headed down in terms of
appreciation. This is the general market and not the high-end, although
that has begun to turn down in many places often due to taxation of
rising regulation as in Miami or Sydney Australia.
However, because of the Sovereign Debt Crisis, we will begin to see
this surface with the Obama-Boehner Debt Crisis Crisis that pushed off
into 2017 when they would not be accountable. As this starts to become
more and more aware to the general public, that is when the confidence
in currencies begins to drop. That appears to be on schedule for 2018.
All tangible assets will rise in value according to the decline in a
currency. This will be “currency inflation” that is expressed by the old
joke a man is frozen until a cure is found and he can be revived. He
put his $1 million into stocks and calls his stock brokerage house upon
his revival. They say his portfolio is worth $50 million. He jumps for
joy until the operator breaks in and says he owes $1 million for the
next 3 minutes.
When we swap to a new currency, then tangible assets will make that
transition in value. It is not that you will make a profit, the name of
the game is that you just break-even.
There are still some areas where there will be profit opportunities. Stay tuned for those.