patrick.net

The housing collapse in 2008 may not be repeated unless they repeat selling mortgages to anyone who has a heartbeat.

I invest with either income or capital appreciation as the objective.
Houses provide rental income and may appreciate, but not as well as stocks and they’re taxed more while you hold them.

If I found a bunch of money, I would buy 1. Vanguard Tax Managed Capital Appreciation fund 2. Vanguard High yield tax free fund (for extra income now).

Metals pay no interest, no dividends, don’t appreciate capital always (e.g. silver), cannot split (e.g. vs. AAPL)

Oil companies are generally good for the dividends they pay to shareholders, so I would own them for that objective. However, funds which pay dividend income as the objective may be more convenient, and are diversified.

The essence of investing is buying mutual funds, but it is not as exciting as picking a stock.
I have bought a few stocks and loved it but it is not as practical for large investment.

Addendum:
My response to the “fuckery” of absurd debt spending is a Swiss stock ETF, FLSW.
When I dump the shares of Wells Fargo which I inherited, I will add to it. I will add some of the proceeds from my GameStop GME gamble.

joshuatrio says

5) Metals.... I'm hesitant on the inflation mindset being here for good (again) because the price of metals hasn't followed the price of housing/crypto/stock market over the last 6 months. In fact, they seem pretty fucking stagnant to me, but I'm still open to buying a few monster boxes of SAE's...

Are you aware of how heavy the paper market is manipulated, especially in metals? Look into the Basil III requirements starting next month, and the trend central banks have been following as a result. Or just call a metals dealer and ask for the spot price and quick delivery, then wait for them to stop laughing.

Talked to a neighbor the other day who works installing new pools, and he mentioned how they've had trouble getting parts, and it's started around the same time this year everything else has become more scarce. Look into hyperinflation scenarios from the past, problems with resourcing raw material are always a precursor, this will only get worse, and spread across all industries that require transportation of any significant length.

My serious advise is have a bug out location where you will have the support of a group of people you trust. Have guns and ammo. A water filter, rations, and gold/silver for long-term investment, and some for barter.

NuttBoxer says

My serious advise is have a bug out location where you will have the support of a group of people you trust. Have guns and ammo. A water filter, rations, and gold/silver for long-term investment, and some for barter

AND YAMS!

I know I'm going to get some push back, but, belt-fed is optional.

1. Nothing is forever except death and taxes. Something will give in the housing market even if it’s only people moving away from dangerous crowded cities to rural areas where they can telecommute.
2. “People” are buying up assets as inflation hedges. This is because many smart and rich people know that hyperinflation is now inevitable. At some point in the future, the Fed will finally slam the door on inflation by jacking interest rates through the roof. This will cause a massive drop in real estate prices, but I’m talking like 25%. Considering that the prices will appreciate another 20-50% from here before that happens, this won’t hurt the little people as much as you’d think. But a bunch of people will walk away from their home loans. This hyperinflation will be ALLLOWED to happen because the country is in massive unmanageable debt and the ONLY way out is hyperinflation.
3. Maybe? It’s possible that the vax will cause long term health problems. But I feel that it’s far more likely that it causes widespread infertility among women by destroying their lifetime supply of eggs.
Now, reproduction will still be possible, but expensive requiring IVF and possibly genetic egg transfer if the couple is very well off. This is when you take a donor egg and suck out the DNA replacing it with another DNA nucleus from the intended mother. Then you fertilize it with sperm from the intended father and implant the result back in the intended mother. This doesn’t have good odds of success, and eggs will be at a premium so it’s going to cost 💲!
However this sort of reproduction will be controllable by the state, healthcare, government, whatever. This will realize the totalitarian Left’s wildest dreams of curtailing populations they dislike and promoting populations they like.
Over time the population will drop a lot.

4. YAMS! Of course!
5. When metals shake loose, it’s going to be a huge movement. I expect the appreciation to be sudden rather than gradual.
6. Trucks and boats are cool and useful. You can mount .50 cal on both and rule the River. Prius are lame. Everyone knows that!

clambo says

The housing collapse in 2008 may not be repeated

Still 2mil with low credit scores are on the way to default after the "end" of forbearance unless gov gives money to them or their buyers or extend forbearance in some form.

Shaman says

Nothing is forever except death and taxes.

This saying was definitely invented by a central banker. Without government there are no taxes, and even with government, there still might not be.

There is so much manipulation that I’ve given up on chasing and reacting to fundamentals.

Basically, I diversify, invest, and continue to invest.

Every time I start to think I should change that philosophy, I regret it because they exact opposite of what I expected happened.

Case and point: residential single family RE during the pandemic

Shaman says

widespread infertility among women by destroying their lifetime supply of eggs

I predict that the CCP will be cloning a new obedient population within a decade, if they aren't already.

housing can not sustain at this rate of growth with almost zero interest rate unless go down all the way to negative rate:
https://readwrite.com/2021/05/07/the-real-estate-market-crash-is-coming-sooner-than-you-think

Blue says

housing can not sustain at this rate of growth with almost zero interest rate unless go down all the way to negative rate:

So, I'd get paid to buy a house?

I never thought the price of oil would go negative either.

Thank you for sharing your views. Thank you to the others for sharing theirs.

1. Will housing always be this expensive?
- I think so. Not necessarily in "nominal" terms, but in the ability to afford it. In the overall historical perspective, in recent decades till now housing has been incredibly inexpensive. Being a boarder in someone else's home, or boarding out spare space to others was the norm for centuries till the end of WW2. Where my in laws live in the Philippines it's still the norm. My question is actually, "will housing always be this affordable?"

2. Panic buying assets with deflation of those bubbles, or eventual stagflation? Yes and yes. I think the first is true, and the second is most likely.

3. Will there be a glut of homes? No. See my response to your first question.

4. What are decent investments right now? See Clambo's comment. I have nothing to add to his remarks.

5. Metals. You did not ask a question. I share Clambo's view.

6. Thinking selling truck and boat.

I own a truck. It's the same truck I've had for 15 years. I own it for occasional SFH type hauling needs. But! To make it work for me, and to rationalize the cost, it must pencil out as a reasonably priced everyday transportation vehicle. A truck like that, is not just a truck: it's transportation.

A boat. Unless it's some dinky John-boat type thing, it's too big of an asset for recreation in view of the cost of ownership. Especially for occasional use, one can be rented. This is not unlike owning versus renting an airplane, vacation home, timeshare or whatever. Same concept for a boat.

Onvacation says

So, I'd get paid to buy a house?

If never ending QE and lowering interest both in US and elsewhere continue and the inflation they pumping, the answer is loud and clear.

HunterTits says

When interest rates soar as the bulk of the Boomers enter retirement and pull vast amounts of capital out of the economy to consume

Do you think Boomers have that much cash? Or that much stock?

https://www.statista.com/statistics/1031884/value-pound-sterling-since/



The British pound as measured in current British pounds.

Onvacation says

belt-fed is optional.

Blasphemy!

Onvacation says

So, I'd get paid to buy a house?

That could work.....get paid 10k per year to live in the house but pay 50k per yr in property taxes

joshuatrio says

Is housing always going to be this fucking expensive,

Can you think of anything not made in china that has dropped in price significantly for the long term?

komputodo says

Onvacation says

So, I'd get paid to buy a house?

That could work.....get paid 10k per year to live in the house but pay 50k per yr in property taxes

CHRIST! What does your house look like? $50K in property taxes? That's nuts.

joshuatrio says

1) Is housing always going to be this fucking expensive, and is it going to keep going up due to inflation?

It seems to me there are 2 components to the cost of a house:
(1) The cost to construct and maintain the house. That's not increasing if you consider how many extra features are in new houses today (running water, insulation, central heating, electricity, etc.). That said, there are government mandates that run up the bill; however, there is some (minimal) utility in smoke detectors, non-lead paint, non-asbestos insulation, etc. Overall, as much as we might complain, I don't think the building costs of houses, when adjusted for content and inflation, are increasing.
(2) Location. That's what's going up massively in the desirable areas. I assume it will continue to go up indefinitely.

Yes, most people fail to distinguish between the house and the land.

They are extremely different.

The house sits out in the rain and slowly rots, a liability.

The land is forever and is an asset.

We should tax the land and never the house on it.

I recall some years back Logan M, the mortgage loan dude, was strongly of the opinion that the us would see high demographic fueled housing demand in the early to mid 2020's. I forget what his arguments were, but he seemed to feel strongly about it, so it always stuck with me.

Hircus says

I recall some years back Logan M, the mortgage loan dude, was strongly of the opinion that the us would see high demographic fueled housing demand in the early to mid 2020's. I forget what his arguments were, but he seemed to feel strongly about it, so it always stuck with me.

@LoganMohtashami

Patrick says

We should tax the land and never the house on it.

Exactly - somebody that builds a mansion on their plot shouldn't be taxed more than somebody that builds a shack on their land.

But I'd give one exception - utterly undeveloped land shouldn't be taxed at all. So instead of having nutcases camp out in a 1000 year old tree to preserve it, they can just buy it, and make it part of a permanent reserve.

But some undeveloped land does benefit from public services funded by taxes. Fire departments for example.

Also, it's a common way to make money to leave a lot undeveloped and then benefit from others around you paying to develop the area. You reap the increase in land value from the work of others, pretty much the definition of "non-productive rent-seeking".

Patrick says

We should tax the land and never the house on it.

What do you suppose the levy would be? That is, about how much per acre? Would the county or state get the tax? The federal government owns an ungodly amount of land, would they be subject to a local levy?

I wonder if a high land tax levy would make towns look like Amsterdam canal property, where houses are super skinny since they were taxed by waterfront footage. Everyone in a Georgist tax local may build tall structures with as little a land footprint as possible.

If there were no other taxes, the land levy would be need to be high, or the government may cut back.

HeadSet says

What do you suppose the levy would be?

I asked a knowledgable Georgist about this once and I liked his answer: Let people bid on the property taxes to own the land the next time it comes up for sale. High bidder on property taxes gets the land ownership. Sell the house separately (maybe to the same person).

The one willing to pay the most in property taxes gets title to the land. People won't pay more in property taxes than they can get back from owning the land, or at least what they can afford.

HeadSet says

Would the county or state get the tax?

Same as it is now.

HeadSet says

The federal government owns an ungodly amount of land, would they be subject to a local levy?

Interesting idea.

Patrick says

I asked a knowledgable Georgist about this once and I liked his answer: Let people bid on the property taxes to own the land the next time it comes up for sale. High bidder on property taxes gets the land ownership. Sell the house separately (maybe to the same person).

Under that system a Bill Gates could buy up all the land and charge rent to whoever owns or uses the buildings on it. Reminds me of the old English nobility who earned vast sums from rents paid by peasants living or working on the Earl's fief.

Patrick says

The house sits out in the rain and slowly rots, a liability.

The land is forever and is an asset.

We should tax the land and never the house on it.

The house is only a liability in the long term, the reason it has value is for its usefulness today and in the near future.

The land is more permanent this is true, but floods, landslides, droughts, earthquakes, volcanos, and human intervention including changing laws means the utility/value of land is not a constant.

How about we don’t tax anything and instead rely on free will offerings.

Before we had state and federal welfare we had private charities providing medical care, food and housing, education etc... for those in need. Now that the government has taken control of most of these things we actually have more poverty than ever. Taxes are not the answer, free will is. Local governments could perhaps justify a sales tax of some sort to support local infrastructure and police. Tarrifs and immigration taxes (we should charge people to become US citizen who were not born here) could fund military and border security. Also any corporations that do business outside this country could pay a tariff if they bring those earnings back to USA. But there is no need for income or property tax. It does not prevent wealthy from becoming more wealthy.

The best way to prevent the wealthy from becoming exorbitantly wealthy would be to give every family a piece of real estate (land) of roughly equal value, let them use it, sell it, rent it out, or do whatever they wish with it for a period of 50 years. After 50 years the land is returned to the family that originally was bestowed it. This is called the jubilee system and it works to limit inter generational poverty while also rewarding those who make wise choices with their resources.

joshuatrio says

There's a ton of questions to be answered and if you have an input on any of these ramblings, I'd love to hear it:

As long as people have a need for housing and the means to pay for it, prices will not fluctuate much from the upward trajectory they are on. So unless people start dying en masse, more houses are built than can be used, or Earned and investment incomes start to be reduced dramatically I don’t see how housing prices fall much going forward. Interest rates cannot go up without crashing the house of cards called “the economy “ which is built on debt and speculation.

As long as the dollar continues to be the reserve currency of the world things will continue as they have been. When that changes all bets are off. War, depression and perhaps bankruptcy which could result in anarchy and/or hostile takeover of the USA are all quite possible if the world stops using the American petrodollar as their king fiat currency.

HeadSet says

Under that system a Bill Gates could buy up all the land and charge rent to whoever owns or uses the buildings on it.

He could try now anyway, but he couldn't really buy all that much with a measly $100 billion.

All the real estate in the US is worth about $34 trillion, so he could buy about 0.3% of it.

And most of it isn't on the market anyway.

Patrick says

And most of it isn't on the market anyway.

That is the difference - more land would be forced on the market at tax bid value. And Bill and others would not need all the land in the country, just current high value and some strategic undeveloped areas. We would have more rich family "Dukes" like the one that owns that Hawaiian island of Niihau:

The family that owns the land reserves the right to evict people, regulating who is allowed to visit. There are also strictly enforced rules for those who live on Niihau - residents can't partake in illicit substances or alcohol, and they have to follow certain codes with regard to appearance. The small number of people who live on the island don't pay rent or buy their own food - it's all supplied by the island's owners.

https://www.msn.com/en-us/news/us/inside-the-privately-owned-forbidden-island-of-hawaii/ss-BB17AAE1