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Time to sell your house.
Topic Started: Nov 26 2006, 09:34 PM (1,708 Views)
werz
werz
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This is a long article, but it could make the difference between going broke or having money in the bank and two houses in 5 yrs.
http://www.informationclearinghouse.info/article15689.htm
And not only in the US, but everywhere.
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Johnny Fist
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Quote:
 
Give me 5 minutes and I’ll convince you that you should sell your house immediately and invest your life-savings in gold...


Is this guy a moron? He's advocating selling one asset at a 20 year low to buy another asset at a 20 year high. If anything, in the next couple of years you'll want to buy real estate as the prices go down and The Fed begins to once again lower interest rates.
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Prushka
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I'll have to come back to this after I check a few things
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werz
werz
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More good news for you fist. Taken from an article by Peter Shiff, Investment Analyst.http://www.kitco.com/ind/Schiff/nov242006.html
It also never ceases to amaze me how U.S. investors can be so fixated on stock prices yet remain oblivious to what those prices actually denote. Stock prices of course represent quantities of dollars. Therefore, true stock market values actually depend on the purchasing power of the dollar. Concentrating on the former while ignoring the latter is one of the biggest mistakes most investors make.

Unfortunately the technical outlook for the dollar, and by extension that of the entire U.S. economy and the financial markets it supports, is rapidly deteriorating. The dollar Index, now trading near 83.5, has broken though some key support levels and the next test will likely be its all time record lows of just under 80. If that test fails, as it most likely will, look out below. Once the dollar moves into uncharted territory, the selling could intensify, with the dollar index trading below 70 in short order. My ultimate target for that index is 40, which would literally cut the dollar’s value in half. I think the entire move could occur in just two years. Again, putting that decline into perspective, it is the equivalent of over a 6,600 point decline in the Dow. Of course this assumes the Fed finally gets religion and Congress and the President heed its sermon. If not, and hyperinflation ensues, the dollar index could fall far lower, perhaps even breaking into the single digits before bottoming out.

Don’t make the mistake of thinking that this is somehow a problem for foreigners. It is Americans who will feel the losses the greatest, as it will result in substantial increases in both consumer prices and interest rates, and in declining assets prices, particularly for residential real estate. In the other words, what we own will be worth a lot less and what we need to buy will cost a lot more.

Don't think we wont suffer either, our currency is tied to the US dollar, real estate prices will drop 50% and interest rates will rise 25%, any money still owing on your house will be a burden to large for many.
Thanks to Bush and his spending like a drunken sailor, there was a decline in GDP for 12 successive quarters, from 1st qtr 2001 to 3rd quarter 2004, the biggest since 1942 when records were first kept, 4 is the previous worst. I don't have figures for the last two years, but inflating real estate prices, has been how Greenspan kept it from hitting harder, he jumped ship, as rats always do.
I hope I am wrong on this, as Wiemar Germany and hyper inflation could be the outcome, whilst a trillion dollars plus, goes down the Iraqi bottomless pit.
Perhaps creating a war with Iran and including the rest of the muslim world, will be the way Bush is looking to forestall this inevitability.
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Johnny Fist
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Even more good news!!!

This makes for an excellent buying opportunity!
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Prushka
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The adage: "climbs a wall of worry" is a true statement, as in 1982 when the banks were
in trouble with Brazil's default on loans and the start of 18 yr. bull market with a low of 777 and by 1984 a new all time high of 1260

home appreciation rose by 3.5 percent here from a year earlier and that's what I'm looking for. I believe the 10 yr note will be down to 3.8 to 3.9 after some up side retracement over the next 6 months and interest rates will follow bringing buyers back in the market

BTW...werz both articles have some valid points, but how they will actually effect real estate is yet to be seen. Some day in the future there will be a catastrophic crash
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werz
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US dollar falls on manufacturing slump
From correspondents in London
December 02, 2006
THE US dollar tumbled further overnight after a key survey of US manufacturing activity showed a contraction in November, with the euro rising above $US1.33 and the pound breaching the $US1.98 level.

In late European trading, the euro changed hands for $US1.3317 after hitting a fresh 20-month high earlier in the day, compared with $US1.3241 in New York late on Thursday.

The US dollar stood at ¥115.35, from ¥115.77 late on Thursday.

The pound rose to $US1.9792 from $US1.9657 in New York, and hit a 14-year high in intraday trades.

In the United States, the Institute for Supply Management's index of manufacturing dropped to 49.50 from 51.2 in October, falling below the 50 mark to indicate contraction in the sector for the first time since April 2003.

IDEAGlobal strategist Divyang Shah said the fall below 50 was particularly significant because it could put the lid on lingering hopes that the Federal Reserve would opt for one more interest rate hike.

"The significance of this level comes from the fact that the Fed has never hiked interest rates when the ISM has been below 50.0, and thus dampens significantly concerns over the recent hawkish rhetoric from the Fed," he said.

The euro surged to fresh 20-month high of $US1.3349 in the wake of the data, while the pound hit a new 14-year high of $US1.9849.

The greenback had already suffered prior to the ISM data's release, owing to a report which suggested the European Central Bank was willing to tolerate sharp gains in the single currency's exchange rate.

Analysts cited a report quoting an unnamed ECB official as saying that the eurozone economy could sustain a much sharper rise in the euro's rate to $US1.40-1.45, with some suggesting it could go beyond $US1.50.

"They (the ECB) are not going to stand in the way, so it's all about how we get to higher ground and it's speed, as opposed to levels," Shah said.

Among other currencies, the Australian dollar also hit a 20-month high against the US dollar of $US0.7928.

The yen meanwhile edged off lows earlier in the day which had taken the euro to a new all-time high above ¥154 following weak inflation data overnight.

The Japanese core consumer price index rose by 0.1 per cent in October from a year earlier, below expectations for a 0.2 per cent rise and supporting the view that the Bank of Japan would raise interest rates later rather than sooner.

The euro was changing hands at $US1.3317 against $US1.3241 on Thursday, ¥153.58 (153.30), £0.6731 (0.6734) and 1.5907 Swiss francs (1.5862).

The US dollar stood at ¥115.35 (115.77) and 1.1947 Swiss francs (1.1977).

The pound was being traded at $US1.9792 (1.9657).

On the London Bullion Market, the price of gold firmed to $US648.75 per ounce, from $US646.70 late on Thursday.
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Johnny Fist
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Explain to me what that means in your own words because I'm pretty fucking confident you don't have a clue. Don't try and bullshit me either.
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Prushka
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10-YEAR TREASURY NOTE was down today
http://finance.yahoo.com/q/bc?s=%5ETNX&t=5d&l=on&z=m&q=b&c=

as well as mortgage rates...here is 30 yr fixed rate
http://www.bankrate.com/gookeyword/graphs/main_graph.asp
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Johnny Fist
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CDs are falling, also. You may want to buy a couple 12 or 18 month CDs while the getting is good.
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werz
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http://www.kitco.com/ind/Daughty/dec062006.html
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Prushka
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does this look like a good entry point to buy gold to you

http://www.tfc-charts.w2d.com/chart/GD/M

http://www.the-privateer.com/chart/gold-pf.html

Would you have bought gold in 1987 when things looked extremely bleak
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werz
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I wish I had bought in sept 99.
For whatever reason, Bush has been good for the price of gold.
When the country starts printing money as fast as it is at the moment, something has to be used to hedge against the devaluation of the currency.
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Johnny Fist
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Prushka
Dec 14 2006, 05:13 AM
does this look like a good entry point to buy gold to you

http://www.tfc-charts.w2d.com/chart/GD/M

http://www.the-privateer.com/chart/gold-pf.html

Would you have bought gold in 1987 when things looked extremely bleak

It looks like an excellent time to SELL gold, not buy it.
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Prushka
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Of course...what should be clear is that in 1987 things looked very dismal and had you run to gold at that time, you would have lost your ass...see any similarities.
But that doesn't mean that gold can't move higher, just something I'd avoid at current prices.

werz...not to say that the guy doesn't have valid points, but remember he has his own agenda and I've heard many gold enthusiasts touting doomsday scenerio's over the years

It does appear though that things have been escalating. I'm looking for a drop in Fed Funds rates and mortgage rates and think the housing market for the time being is stable and home appreciation continue to climb at a slow but steady rate and hopefully out pace inflation by a nudge and make a buck on the renovation

If it were solely up to me I'd put this house on the market this summer
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Johnny Fist
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I'm really confused right now about the direction of the economy in 2007. On the one hand I can see the Fed lowering rates to renew interest in real estate, but at the same time I can see them raising the rate to keep competitive with the Yen and Euro. So what do I think about gold in either scenario? Sell. Now. If you bought in anytime before '02 you're a rich man. If you didn't, well, too fucking bad. Real estate is doing the exact opposite of gold right now. Maybe now would be a good time to pick up rental properties while prices are cheap and sell them five or ten years down the road for a handsome profit when prices go back up again. I've been actively searching my area looking for potential properties knowing damn well that prices can still go lower.

Oh, and December is when most mutual funds do their capital gains distributions. Right about now is a good time to pick up some funds at significantly depreciated values.
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mireland
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I'm not really sure if I should take financial advice from a guy named Johhny Fist.... :blink: :lol:
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werz
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mireland
Dec 17 2006, 03:42 AM
I'm not really sure if I should take financial advice from a guy named Johhny Fist.... :blink: :lol:

With your spending habits with pole dancers, I doubt you could buy a dog kennel as a start in to the real estate market.
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werz
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The way lending was arranged, making it possible for home buyers to borrow 100% of the price, with no credit rating, just kept the housing market afloat a little longer.
http://www.slate.com/id/2160973?nav=wp
It seems we are now on the slippery slope, how far down will it go, before it hits rock bottom.
It's not surprising the Commander in Chief wants a nuclear war, to keep the peoples attention away from the total balls up he's help create, in the economy.
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rockinup1231
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It's time for werz to throw away his keyboard.
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werz
werz
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I wish it wasn't true, those who can afford it least, will get hurt most.
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werz
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http://news.yahoo.com/s/nm/20070319/ts_nm/...tKsexriERJg.3QA
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mireland
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the square root of 9 is 3
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rockinup1231
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mmm, pie. :sun:
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Johnny Fist
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Ipods have DRM.
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