On 27 Aug 2014
My first real estate bear thread (ever),
Deflationary depression equals Debt Deflation. Go read the short paper published by Irving Fisher in 1933. If and I will repeat if we go into debt deflation it is going to be brutal. Cash is king. Debt is death.
I thought we would enter debt deflation in 2009 and I had a ton of debt. In steps Bernanke and bails most with debt out. I have had a plan from that moment forward. Make a plan and stick to it.
I bought a home that I can easily afford on 1/3 my current income. I sold my other overpriced house and my rental house. I have dumped 750k in debt from the homes and now have a 200k loan on an affordable house. I am making double payments and will be paided off in 5 years or so. I have paid off cars. I have no credit card debt. If we crash in 3 years I will have a mostly paid off house with enough cash to pay the rest off.
It probably wont happen with the Fed willing to step in and spend whatever is required (apparently they have no limit). If it doesnt happen, hey I will have a paid off house with 0 debt and a fat paycheck.
Black Swan.... Crazy republicans win a super majority and the presidency. Small financial crisis cooks off and the idiots just let the place burn down to the ground.