patrick.net

Stopping the crackdown on legal grow ops here in California. Yeay, I think.

Dialing down the religious nut nonsense. Yeay!.

Not getting into a war, even a war of words, with Iran. Yeay!

Doing the Nixonian thing and drawing us down out of the wars he was presented with. Yeay!

Moving to allow open homos in the military . . . Yeay (if you're a homophobe just think of all the lesbians who'll be able to serve. Warms your cold little heart a little, no?)

Moving to reinstate Clintonian taxes on the top 5% or so . . . BIG YEAY!
(I thought the Bush tax cuts sorta made sense for the lower 3 brackets, but the immense top bracket cut was just offensive).

We're not out of the woods and I don't really have much trust that the American people will either be in better shape this November, November 2012, or particularly willing to fight for a centrist Dem like Obama.

~40% of the country is socially conservative. For anything to get done they have to be triangulated into the policy-making.

i dont think house price will sky rocket if there is an inflation.

yes, government is printing money now. but it does not mean every one is getting a raise.

also, the price of food, cloth and some other essential product's prices will increase.

the current housing situation is that some people were not supposed to be home owners. they borrowed above their meaning.

when inflation is happening, people, who are not supposed to be home owners, will think about how to survive first.

after all, the supply is greater than demand.

inflation =/= pay raise, at least for main street

"it seems pretty obvious that the government is hell bent on propping home prices up… "

This is a given, no? If you were in government, wouldn't you do the same?

From the Fed's point of view (humor me that the Fed is part of the government), if that $5T of net borrowing 2001-2008 went poof, things would be very very bad for a very long time.

From any politician's point of view, a) they personally own a lot of property b) 60%+ of the population owns c) renters don't vote anyway, nor are they campaign contributors.

Looking at shadowstats.com, it appears the money supply has gone through the roof recently.

Actually, if you read your own link, you'd read things like:

"the broad money supply now is in monthly decline, soon to be year-to-year decline"

It's a complicated picture. The major mistakes were committed 2002-2007, as M3 went from $8 to $14T in a very short time.

We exported the inflation to our trading partners who either recycled these dollars into GSE bonds, parked them in treasuries (debt held by foreigners has risen from $1.2T in 2003 to $3.6T now), or just have really big dollar balances in their sovereign wealth checking accounts.

LandShark says

is that some people were not supposed to be home owners

This line of thinking simply makes no sense to me given there are 20M vacant homes right now. The only reason homes are expensive is that we bid them up to the point of unaffordability, we tax improvements at the same rate as land (disincenting higher density housing), plus we encourage parasitical capital to buy-to-let single-family housing, an evil practice that should be taxed sufficiently to break its business model. But I digress.

I agree with LandShark above that without wage inflation there can be no housing inflation, unless they "turn the machines back on" by changing the rules of the buying game -- 2% FHA loans, turning the mortgage tax deduction into a straight credit (even typing that out gives me the shivers).

The general theory, and history, is that a rising cost of living will result in rising wages. But that history is from a pre-globalized national economy, where unions were still strong, the capitalist class had actual depreciating fixed capital (production lines, mills, etc) that needed to be running regardless of wage cost, demographics were favorable for economic growth, plenty of land was available to sprawl, 30 years of postwar bliss had resulted in relative economic strength, the Internet hadn't connected India to our economy, and the Maoists were busy shooting their intelligentsia and otherwise engaging in anarchy and not doing our manufacturing for us for pennies an hour.

I don't know how this is going to end. My general belief basis is that the debt overextension will result in repeating Japan's long, unpretty decline from 1990 to 2003 or so. But we've got a baby boom generation turning 55 now, 10 years they're going to be retiring (or so they hope). This is going to get ugly if we don't get our house in order first.

The chart above doesn't tell the whole story. If you put all the Panics of 18xx and recessions and stuff as overlays you'd see that history from 1800 to 1910 was completely pocked with collapse, inflationary expansion, and collapse. It really wasn't a pretty picture, and that's *with* half the continent's wealth almost free for the taking.

"Consumer Inflation" was minimal because everybody was a producer first not a consumer (ie. we had a producer-centered economy not a consumer-centered economy). If anything, that graph is a graph of land demand vs. supply.

To answer your question, I think the best bet is to develop portable wealth-creation skills. Houses CANNOT go above affordability in the long run. It is true that if we see household wage inflation like the 1970s rents & home prices might take another step up, but my game is to not become too attached to this country as a permanent abode. There are better places to live, if you can make a living there.

Well... which poop is less stinky, elepant crap or donkey crap? Now that's the hard question.

I don't know what the hell the brother has been doing so far, but I know I never liked to see a bimbo scrubing old man's back.

I would have taken Ron Paul more seriously in the Primaries.

IMO he was trying to destroy parts of America that makes America great.
In retrospect, I realize now, those very things have already been Hijacked by both parties and adulterated to do their bidding of cheating and defrauding the Americans out of trillions of dollars. What good is Government reform when they are bigger crooks, than the people you expect them to protect you from?

Stay-- I don't even know what kind of car you drive. Why do you think I hate it?

Troy says

My general belief basis is that the debt overextension will result in repeating Japan’s long, unpretty decline from 1990 to 2003 or so.

I agree. I can't prove it, but it sure feels like we're totally retracing Japan's steps. I'd like to see a chart of their money supply. They had a yet bigger bubble than ours and just had property deflation for 15 years. So believe it or not, cash may be the best thing to have for a while.

Troy says

I think the best bet is to develop portable wealth-creation skills.

And I agree there too. Develop skills that are in demand, and teach your children to do that too. That's always a good investment.

The problem with your theorem is this:

IF THE TREE FALLS IN THE WOODS AND NOBODY HEARS IT DID IT MAKE A SOUND?

All of the "printing" has gone to prop up bank balance sheets and that fake money never really existed because it wasn't spent in the "real economy" outside of finance.

We are in deflation. It may be a small number. We may even be bouncing around zero. But we are certainly not in inflation for the meaning of the average individual. Is your paycheck going up? Mine isn't, it's gone down.

If you are looking for ways to "come out ahead" well just do what everyone else does. Save your money and get by. Learn some new skills. There are no TRICKS that are going to save you Joe Schmoe and make you a millionaire while you neighbors wallow in filth and fight over table scraps. I find this sort of discussion usually devolves down to some form of "how can I do some trickery with investing/money in a NON-PRODUCTIVE MANNER to profit". Isn't that the sort of thinking that landed us in the soup?

Yes we all like the idea of buying gold now at $1K per ounce and patting ourselves on the back when it goes to $10K in future. However if that is what is going to happen, you are WAY at the back of the line compared to the rich elite who are first in that soup line. You want a simple way to get rich in future, use your funds to start a FINANCIAL FRAUD COMPANY and sit back and soak up overhead. Or just marry rich.

Well, tell me what kind of car you drive. Maybe that will help me understand the problem.

E-man says

@ Vicente,
I applaud you. I got a good laugh from reading your comments, too.

Just out of curiousity, could you tell what made you laugh?

If you strictly inflation hedge I would easily pick real estate over gold.
There's no guarantees we'll have inflation but
if youre really conservative when you buy then it wont matter if prices go up, down, inflation, deflation.

you'll be able to ride out any of those scenarios.

Except that real estate has yearly taxes and upkeep, so you're losing a significant percentage per year. Also, if you're using leverage (aka a mortgage), then real estate also has an interest cost per year. Inflation would need to be astronomical for you to hold your ground, once you incorporate all the costs.

I dont kow why they want to herd us onto buses and away from the freedom to move about at will. Can you explain it to me? On page 830 of the Liberal Cabal Guide, they say it's to force you to spend time with disadvantaged minorities you'd not otherwise interact with except in a patron-server relationship. Good for you to gain some empathy, and good for them to gain some social skills and probity. I joke, but in Japan the trains are something of a good social equalizer and mixer. Everyone's middle class on the train. It's just one part of the puzzle, really. Having walkable cities would reduce the obesity epidemic, and also reduce energy consumption, ie GDP per kwh. They'd also be more livable. But to get there from here we have to crack some eggs. As I said, the free market is path-dependent and only seeks to find the next local maxima, it can't get to the global maxima of the system without extra-market (ie governmental) help.

Here's what to look for regarding inflation:

1. The Fed gives every man woman and child in this country 100,000 dollars. (hyperinflation)--highly unlikely
2. Suspension of all taxes, or a 2 year tax holiday. (mild inflation)---unlikely
3. Like Troy says, 2% 50 year loans with tax rebates attached, and minimal or no down payments required, all backed by the government. (moderate inflation) --- a likely scenario.
4. Continuation of the Fed's current policies. (mild, persistent deflation) --- more likely scenario.
5. Government (Fed) chooses a Lassiez-Fair approach. (immediate major deflation, followed by stabilization) --very unlikely

The most important thing is that inflation starts when people have more money. When is this? I don't even see this on the horizon, let alone in the immediate future. In '02 - '05, inflation was rampant. People everywhere were living off their home equity. Credit was easily available. Everyone could buy a house. Everyone could afford a new car or two, a great vacation, people spent money on goods and services without blinking. Vegas was always crowded (on weekends, some high end casino's minimum table bets were $25). Anyways, those are a few examples. There are many more. Inflation is not happening now or soon. btw, inflation was massive in those years and gold went up about 200 bucks.

The word "libs" is definitely intended to be impolite, lacking in good will. So it's now on the list of impolite words that gets things into moderation.

toothfairy says

If you strictly inflation hedge I would easily pick real estate over gold.

There’s no guarantees we’ll have inflation but

if youre really conservative when you buy then it wont matter if prices go up, down, inflation, deflation.
you’ll be able to ride out any of those scenarios.

Thanks for props others!

Where I am going to disagree with this line of thinking is "inflation hedge". Gold at least has the advantage it doesn't cost you anything to own I suppose. Unlike real estate which has property taxes and upkeep, etc.

TPTB presume that inflation is desirable AND that we will have it back any time soon. The mucky-mucks like you to think they will have things right as rain 6 months from now, and they've been saying that for how many years now?

Maybe Captain Smith of the Titanic has a wheel in his hands but it's already too late. Or maybe the wheel isn't even connected to anything and they are just putting on a brave face. Central bankers like to jawbone inflation as inevitable and desirable BECAUSE IT BENEFITS THE BANKS to keep your money in circulation every second of every day. For you to SAVE any money is something they abhor, they refer to a "savings glut" like it's a disgusting perverted tendency among the peasants they must correct.

We are unlikely to see anything like normal before 2014, so ride it out until then. I don't see any form of "hedging" for inflation/deflation that makes any sense to me. I like cash. Unless we go Mad Max then all bets are off anyhow.

The Middle Class has been impoverished by a policy that enriches the banks by inflating housing. Even as our wages have stagnated, housing has taken a gradually larger share of that.

Vicente, I have noticed the exact same phenomenon in the costs of college education. Once "low cost" student loans became available, the price of tuition went through the roof. Tuition has climbed far sharper than inflation in every year for most of the past two decades. At the same time, students get the ultimate teaser rate from Uncle Sam---you don't have to pay us back until you graduate and hit it big!

Student debt now occupies a huge percentage of debt for people under 30. Today it's almost impossible for even middle class Americans to get through school without incurring student debt. The banks and government have firmly entrenched themselves into the education framework, with a set of artificial market conditions so powerful that kids can't say no. The lenders have a government guarantee, the interest rate is low and the teaser period is phenomenal, the client base is huge and the marketing is blasted at that client base 24/7. Students also get the loan pitch from an education institution that they otherwise trust and respect.

The government and lenders have actually pulled in a lot of kids who would otherwise wait a year or two, get a job to build up a headstart on tuition and otherwise approach the problem rationally. In short, the Middle Class is also impoverished by a policy that enriches the lenders by inflating tuition.

Brand says

Vicente, I have noticed the exact same phenomenon in the costs of college education. Once “low cost” student loans became available, the price of tuition went through the roof.

Banksters are clearly at the back of this I think, not the colleges. Banksters ultimately want more for themselves and less for us and any way in which they can think to give you an attractive long-term loan that nets them decades of indentured servitude they will do it. College tuition is simple a response to that "easy money" somewhat like housing although in less grand a scale. I went through school with some money from parents and also working sporadically. I see kids in college today doing a slow tour but having to work a LOT to make it through so yes it is harder.

Medical costs have also gone up far faster than inflation, is that due to poor banking policy? Perhaps not.

It doesn't explain everything but the Bubble Economy and Greenspan-enabled INDEBTED LIFE is a the back of a lot of the mess we are in.

When I was finishing up college in the 80's I got my first credit card and spent too much. It took me a year or two after college to dig out of that hole and I said never again and I haven't had any sustained periods since then where I've paid interest to anyone. I like the quote "poor people pay interest, rich people earn it." If you are paying interest on something that is not a profit-making enterprise, you are a gullible peasant plain and simple.

The banksters, government and schools are all in that scheme together. The schools benefit from the huge increase in demand, which allows them to raise prices for arguably the same services. The lenders get a client base and steady payments, with the added bonus that the debt is tough to discharge in bankruptcy. The government ties it all together with guarantees, laws and subsidies.

I'm not as versed in medical costs, so I really can't comment there beyond idle speculation.

HOA is $1,400/ month. ("hot water and trash included") Ouch. 110 units in the complex. Double-Ouch. What do they do with 110 x $1400 = $154k each month? Maybe not all units are charged the same HOA fee. P.S.: sorry, I just now noticed the HOA comment in the original post.

I'd vote for Obama again. But the system is so bogged down that it almost doesn't matter.

"Lots of people seem to think gold / silver is the way to go, but I’ll be damned if I pay $1000+ for an ounce of useless metal."

USD is also useless. For example, you can't eat it. With gold, you can fill your teeth with it, or make your wife a nice necklace. And gold will outlive every home on the face of this planet. Also, if you walk around with gold bars in your pocket and someone tries to rob you, you can hit them over the head with it. Try that with cash.

"If the whole goal of the gov’t is to boost home prices, should I run out and buy someones forclosure?"

The goal of government was to avoid a depression. In that case, you should have placed all of your money in the stock market back in '07.

Brand,

You wrote, "Today it’s almost impossible for even middle class Americans to get through school without incurring student debt."

I agree, since so many of those middle class American kids from middle class families with middle class second parent working in a middle class career to help pay for middle class childcare bills and middle class "get ahead" preschool and to defray cost of middle class 2500+ sq ft home with middle class AC and middle class plasma TV in "higher test score" middle class school district (or else the middle class private school with middle class private school tuition) with middle class tutoring and middle class private lessons, with middle class SUV (with middle class SUV payments) among the middle class multi-vehicles also with middle class payments in the driveway, occasional (ie, more than "once in a lifetime") middle class trips to middle class Disney World often on middle class flights, and middle class trips snowboarding trips to middle class Tahoe, middle class dining out and various and sundry middle class expenses to keep up middle class appearances, and middle class credit card bills.

Yep, our middle class Entitlement middle class way of middle class life has left us with middle class borrowing for middle class tutition at middle class universities. Are you middle class surprised?

So here's a notion for you Inflation Believers.... what if it's 2 decades (or more) of deflation? Impossible you say? Look at Japan.

Mis-informed Noah building your boat so early that it dry-rots and termites eat it, and it is useless when flood finally arrives.

Vicente says

The Middle Class has been impoverished by a policy that enriches the banks by inflating housing. Even as our wages have stagnated, housing has taken a gradually larger share of that.

Vicente! about when do you think the banks started this policy of inflating home prices ? And how did they manage to convince buyers that a $200K should really be worth $600K.

or was it more likely some older family member, even a parent convinced their children buy a home in California no matter what the price is ? Uncle Henry always said real estate was and is a sure bet!

I see the Easy Credit problem plainly apparent in the 80's. I'm sure someone else is more versed in the actual history but I know that mid 80's is when I noticed credit card companies bracketing the student center convincing undergrads to take on their cards. Handing out cards along with some schwag to seal the deal on their future debt obligation. The Credit Card industry is one of their better long-term scams. I see it as part of the greater problem. Banks want to convince you "how much a month" is all that matters, and please ignore this yoke we are placing around your neck.....

Student loans, car loans, credit cards, NINJA loans for house, it's all part of the same thing.

To the way of thinking of bankers, they were making a better life "affordable", and just oh-so-coincidentally it lined their pockets as well. They rationalize behavior that is ultimately destructive to society because they must.

Uncle Henry repeats this mantra about "building equity" because everyone else does. One of my neighbor too talks of the great importance of BUILDING EQUITY, makes it sounds like it's the most important thing there is even more than saving money or investing. I doubt he could explain rationally why this is so, and I'm damned if I know why so many people are programmed to believe it's critical. My feeling is the banks and real-estate agents work in partnership to plant this meme and reinforce it at every turn, just like diamond cartel has implanted the idea of "engagement diamond" in the last century when it didn't exist before.

If I could vote again, I'd have voted for McCain.

Not because I like him.

I'd have voted for him because right now we'd be in the exact same position, and it would show all of these fake "fiscal conservatives" for what they really are -- people who just want to maintain the status quo.

And how did they manage to convince buyers that a $200K should really be worth $600K.

I, too, find this fascinating. Suggestion is a powerful thing, especially when it is complementary to the notion of equity wealth/free money. People who *want* to believe are the easiest to convince, and who wouldn't want to believe they had an ATM where their house used to sit? That's why it has become etched into the present-day public mindset that 250K, which 9 or 10 years ago afforded one a veritable spread in most parts of the country, is somehow now the "low end" of housing. I still see places on Zillow that sold for 190 in 2000 that are assessed at almost 350K. Suggestion.

Things will be back to normal (or something approximating it) when the public buys houses/property for one of three reasons:

Tired of the vacillation often inherent with renting
They really love a particular place for its design
They are at a point where it makes more financial sense to buy and they don't mind constant upkeep or being locked in to one region

There are so many more interesting and even gratifying pits to throw your money into, that I could never get into the whole investment angle of real estate, even when friends of mine were hammering it into me during the bubble. It seems like so many other smash-n-grab ventures that the chronically unimaginative seek out to try and magnify their lots in life rather than slowly building something from nothing. In hindsight, I likely could have played hot potato even briefly and made out like a bandit. But the pangs of regret are just not there. It just seemed so...cheap and larcenist. So lame. It still does, even with Uncle Sam's vehement stamp of approval. Vicente has the right idea. Invest in some upstart. Even if you have your ass handed back to you, it will be far more enriching than gambling.

I agree that the crap was going to hit the fan no matter who was in office. Bush's bailout was a bad omen. But, Bush is not a fiscal coservative.

Allowing the reduction of money lending standards to a point where an illegal invader from mexico can sign for a $300K "stated income" loan to over-pay for some stucco-wrapped POS started this garbage .. and NONE of us (conservos or libs or xxxxxx) would have ever voted for that. Not one. That is the vote we needed.

Where is Code Pink?

Here's a cartoon I like that illustrates my point about Quantitative Easing:

The ultimate point of all this Fed Money being shoveled out to the big banks, is that it will "trickle down" to the citizens. How did that "trickle down" theory work out the last few decades? Seems like at best a light mist now and then.

Similarly I don't see the mechanism for massive inflation, or ANY inflation really. If Bernanke mailed everyone a check for $50K sure we'd have inflation tomorrow, but that's not what they are doing. Everything they do seems targetted in fact at making sure it NEVER makes it into the hands of the peasants, as that might make it seem like a DOLE or something I guess. I dunno it's just watching those supposed "money supply" figures/charts seems meaningless because the money they "print" has no appreciable velocity. At best it's propping up a shrinking credit market during the Great Deleveraging.

I agree. The pig is constipated.

Bap33 says

I agree that the crap was going to hit the fan no matter who was in office. Bush’s bailout was a bad omen. But, Bush is not a fiscal coservative.

The point I'm making is that (the vast majority of) the people who think that fiscal conservativism are generally full of shit and just use it as an argument to complain about democrats. They never speak a word about ridiculous spending under every Republican president since Hoover, and they marginalize true fiscal conservatives like Ron Paul.

There would be no Tea Party movement if John McCain was president today. There would just be a bunch of angry people who would be looking for someone to blame.

Kevin says

There would be no Tea Party movement if John McCain was president today. There would just be a bunch of angry people who would be looking for someone to blame.

I agree, let's call these people Democrats.

Not that I would check the box by McCain either. A vote for Democrat or Republican is a wasted vote.

When a Democrat wins the "conservatives" get all riled up and the "liberals" turn a blind eye to all the things that their guy does which go against their liberal philosophy. And vice versa when a Republican takes office. This happens so much so, that it is a wonder anyone really cares who wins. They both do and would have done almost exactly the same things. "Conservatives" Ron Reagan and the Bushes were HUGE government expanders and deficit spenders. "Liberals" Bill Clinton and Barry Obama turned out to be huge war mongers and friends of corporate interests. Go figure. Pander to your base in your stump speeches, win over a few independents and govern as the bankers tell you to and you might get elected or re-elected and avoid assasination.

Austinhousingbubble says

I, too, find this fascinating.

Austin, and I am also amazed. Back in 2005 a family across the street migrated to Calif from Pennsylvania paying 1.5M for a home smaller than mine. They kept talking about how great the Los Gatos was and excited there were living the fine life in CA and price was right. They didnt seem to understand most of the homes were around 200-300K before the bubble started.

Well things didnt go well for them! A year ago the husband, IT director for a start-up was laid off due to acquisition by another company. I see he hasnt landed a full time gig yet. Not yet in foreclosure from what I see, but eventually it will happen. Reality eventually catches up to you.

rileybryan says

OK, so lets say I’m dead wrong about inflation, where do I put my money?

There are many near-cash equivalents. I have my retirement accounts in "inflation-protected bond" fund which is making a few percent. You can actually buy Treasuries direct from the government now, check their web site. There are also desperate banks offering higher CD rates than your local one, and they are FDIC-protected so as safe as well anything else is right now.

My only gold is one of these:
http://www.usmint.gov/mint_programs/ultrahigh/index.cfm?flash=yes
Purchased as a keepsake for my son way down the line.

I do play around with some money in stock market. Largely idle now but I do occasional plays because like anyone else I have a tiny gambling streak in me and might as well let it out for a walk occasionally. I most enjoy tending my Roth IRA account in ETrade which has done fine, I like very much making it grow without having to fret over "if I do this, what are the tax implications" like I do with individual. Even when I was unemployed during last downturn, I funded my Roth. The first item to fund IMO should be your Roth and everything else afterwards.

THE GREAT RESET OF 2010

No money physically changes hands, but all housing related debt is erased, and, if a suitable appraisal is done, all loan balances get reset to that appraised amount if it's lower than what is owed.

Or just convert every housing related loan to non-recourse (other than physical foreclosure) and see what happens.

rileybryan says

GREAT pig pic.
OK, so lets say I’m dead wrong about inflation, where do I put my money? I can’t say cash is really safe, not in my neighborhood.

Where do you live, on the MOON.

Give me your no good rotten cash, I'll contain it properly for you.

Are listening to your self. You need to deprogram man, the Banksters have got you all twisted, to the point you belive the crap that money is bad. One thing I learned in Malaysia, is Money is money, and the currency pegged to your economy is relative.
My counter parts in Malaysia were making 80K ringets a year, that's 1/3 of 80K us D.
But that 80K ringets buys for them in Malaysia if not more, than my 80K buys me here.
Now sure I can take my 80K and go to Malaysia and live like large. But I'm not in Malaysia I'm in America. And to move there, I lose my income from here, and would end up working for Malaysia wages, and be no better off than I am here and now.

I'm saving my money in the bank. I'm not making huge lofty profits, no! But I am not hemorrhaging money from rotten investments of trying to keep up the the Jones'.

If you really want to make money, you've got to go off the grid. If you are perusing the same old tried and true opportunity offered to us lowly saps, you're only foraging over table scraps, the fat cats didn't find any value in.
Real opportunities are found in discoveries.

And make no mistake 90% of the 3 bedroom houses in America that are listing for 200K-300K are headed for 80K-150K(Max).

You can't have a 1800 sq ft house 3br listing for 200K-300K in every Burbdale neighborhood in America, that seems to follow the prices of what that comparable 3br house in the best comunity in those towns last sold for. The fundamentals are "LOCATION LOCATION LOCATION"

When I get frustrated looking in my Prime spot I'd like to buy, then start lowering my standard to look in surounding neighborhoods, that have always been historically 50% of those prime locations, now competing. I get the feeling "Somebody is lying!".

Who is it, which is it, they can't be the same because they are not. When I go to a bar, I don't get charged the same the thing that for any liquid that first in a 12 oz glass. It's based on the content of that glass. Was it Grey Goose or was it Pabst Blue Ribbon on tap?

That is essentially what is going on here. If you are trying to play by their rules, and want to participate, you will be the biggest loser, and will make a very stressed out investor, a very very happy man for dodging the knife.

The close we get to the Tax incentive expiring the more desperate these clowns are to convince you that you will never own a home if you don't buy now.

This too will pass, as silently as "Gitter done" was the catch phrase that summed up the Bush years. "Save the banks and home owners" will just be another embarrassing chapter in American history and lexicon.

See this reminds me of "housing always goes up!".

What is it with the absorbed meme that money must "be at work"?

I have nothing against the idea of investing in a growing business to help it grow. However what most people mean by "putting it to work" is that they want to give it to Bernard Madoff and get a guaranteed 10% whether the market is up or down. They don't really care what the money is doing while it's at summer camp so long as it grows. Money put into someone else's hands is not WORKING FOR YOU it's actually working for some other people. The guys in the middle are milking the cow and maybe you get a few sips after they are done. I used to have illusions I was "buying a piece of TiVO" or various other companies. I have no such illusions now. Wall Street is a big casino that I play and it's fun, but it's only loosely connected to the actual INVESTING in capital improvements that it's supposed to be about.

Is there a perfect answer? No. Stay informed and move it around as needed. To my mind there is ZERO benefit to being ahead of the game actually as you end up like Peter Schiff. Go look up Peter Schiff, he's an inflationista and a money manager. He was right on the the shape of our disaster years before it occurred, but a dismal failure as a money manager largely. His clients lost money. I read his book it had some good information but he's no Oracle.

I like Jim Rogers a lot but I think we all missed the commodities bubble.

If Warren Buffet weren't such an old man, I'd say just buy&hold Berkshire Hathaway. But eventually the old man will kick the bucket and then what happens to his empire?

IF there is an inflation crisis, it will not appear overnight and there will be ample signs for you to take actions. If you miss the first 10% of %1,000 hyperinflation well.... BFD!

Cash is king in deflation. People in my neighborhood for example think they are "investing" in real estate. Well they bought a house that cost $850K 5 years ago but now sells for say $500K. Meanwhile they have to pay it's property tax value still appraised at nearly $900K, appealing that of course for lower but they still have to pay it. They have all these carrying costs and the hope that someday they'll sell it for more than they paid for it. Every time I talk to them they can't do this or that, and can't save any money for retirement cause it's all going into the house. I'd say they are just feeding ....

The Money Hole

rileybryan says

Ok, banks are great but the thing is; they really aren’t. Your money should work for you, not sit there making 0.2% interest.

I'll take every pre depression dollar you have.

You're a victim and don't even know it.

The business mentality of the 90's were "Those bastards have our money and I want it, and I want it now." That sentiment was pounded into the American psyche until the point, that every American wants to be Phat and Living large chasing the Jones'. When 98% of them are not the Man they are the Mark. Trying to parley their hard earned cash, and dreaming of ways to swindle others others out of money for nothing, so much so. That they can't for the life of them selves, fathom, that the very same investment Mr Jones made a fat mint on, was a one of opportunity, he caught some lightening in the bottle. Then sold the very same people with your mentality the "bottle" no the lightening, just the bottle. Now the trick is, to stand out in the rain, and hope lightening strikes again.

I'll take my hard earned green backs thank you very much. As there is one undisputed fact.

Money attracts money. The more you save and have the more it attracts. People with MONEY are in a unique position to turn money into more money, over night transactions. That are a lot safer than placing your money in the market, and letting that lot sort it out.

Give me .02% any freaking day of the week over massive losses.
When the dollar rallies, I get happy, it makes no sense to hear American people bitch about a strong dollar. It seems to me, people have got their priorities messed up.

Patience makes money. The two can't exist with out the other, if you apply one more liberally than the other, you'll quickly run out of both.