patrick.net

RentalWatch says

Housing prices are going to fall 95%?

You are a lunatic... Yes a $200K home is going to sell for $10K.. And at 3.5% interest a 30 year loan of $10K is $55 a month including taxes.

You are a moron if you think a home in 2012 that goes for $200K will ever be able to owned for $55 a month.

RentalWatch says

How can 2011 be the price bottom when 2012 prices are lower than 2011?

Did you miss that i said NATIONALLY prices bottomed in 2011.. which so far is true.

RentalWatch says

Not it's not.

You are a lunatic... Yes a $200K home is going to sell for $10K.. And at 3.5% interest a 30 year loan of $10K is $55 a month including taxes.

You are a moron if you think a home in 2012 that goes for $200K will ever be able to owned for $55 a month.

freak80 says

Fractional reserve banking gets into that weird world where "the velocity of money" matters more than the "store of value" concept of money.

FRB is a neat way to distributing credit through the economy, where in the individual savers appetitie for risk is taken into account. Cumulatively, through each individual's own intelligence on their risk -- the overall economy has taken on the risk that is within reason.

However, FRB as it exists today is fraud because the banks get to decide what fraction to take risk with (essentially all savers deposits) and also the duration of the risk (banks go long duration on the risks).

Velocity is another fascinating variable because it is entirely non-linear and related to human behavior. The Fed wants greater velocity of money (more inflation) but you can see how hard it is to change human behavior. We are saddled with debt and people want to pay it down.

I've had a hard time getting around money as a store of value concept, because that function is totally at conflict with medium of exchange. Money needs to flow, not sit still for the economy. Money as a store of value has been a source of a lot of problems, not least the Great Depression I.

Store of value should be rare works of fine art, wine, precious metals etc. They should not circulate as medium of exchange.

freak80 says

Doesn't the Austrian School believe fractional reserve banking is inherently fraudulent?

The Austrian School in America does (Ludwig Von Mises Institute, www.mises.org ). They are hardcore libertarian right wing fringe Ron Paul movement.

FRB is not inherently fraudulent as they make out to be. If we start circulating gold coins and go to 100% reserve banking, it would be a disaster.

robertoaribas says

yeah, if the housing market doesn't follow your forecast 95% price drop, blame it on fractional reserve banking, or FED policy, or herd mentality of all those people too dumb to understand your permadoom forecasts!!!!

Roberto, not everyone is Darrell in Phoenix LOL.

But you can't deny herd mentality existed in 2005. You sold your house into that herd right?

Yup says

Roberto have you considered the impact of the fiscal cliff on your renters ability to pay rent?

A typical 50K/year family is going to lose $2500/year starting January 1, 2013 with no changes in current law. Even if they extended the bush tax cuts, they will be losing $1000/year in increased social security payments which no one is talking about extending.

For those making 100K/year you get to double it to $5000/year.

I am betting those numbers will crush the disposable income of most families. I am betting that will crush your bet that you called the housing bottom.

Of course you are probably counting on a government handout (extending the tax cuts) so people can continue to pay you rent at the cost of ever greater deficits.

Good Luck with that!

So his rent would drop from $1,200/month to $1,000/month. He will still make money, but just be making less money. Not a deal breaker though.

BoomAndBustCycle says

You are a lunatic... Yes a $200K home is going to sell for $10K.. And at 3.5% interest a 30 year loan of $10K is $55 a month including taxes.

It happened in Detroit. If they reinflate the housing bubble they will turn the whole USA into one big Detroit.

How much does a house cost in Zimbabwe in real money?

BTW, your wooden box will still cost $200K nominal or maybe even $300K. But a loaf of bread will be $500 and a gallon of gas $700.

michaelsch says

How much does a house cost in Zimbabwe in real money?

How much does a house cost in London?