A few years ago I used to think that fiat currency was bad; earlier this year I had an epiphany and understood why it is good. There are a handful of common perspectives in this thread as to why things are so bad. I can honestly say that all these negative explanations have solidified my understanding of why fiat currency is good. Kind Regards,
You gotta be a TOTAL F*CKIN' MORON! Suggestion.. research some world financial history. As Dr. Phil would say, "you couldn't be more wrong if you cut your own head off"...
What, because of the same tired old meme about how every other civilization that has used a fiat currency has eventually died out? That is and old and uneducated parallel. If you honestly think one is directly the cause of the other, then buy all means, keep selling.
I was in your camp for a couple of years and as you know from fall of 2006 until a couple of months ago I traded index futures only from the short side. I see a few things recently developing. For one I see rental prices appreciating in every major metro that I track. Along with the corresponding drop in resale prices p/e's (rental vs. home value price) have come in quite a bit. I'm going out to L.A. for an extended stay and I'm absolutely blown away by rents. I agree the employment picture will worsen-consumer spending will suffer ect, YET I'm not at all sure if economic slowness ipso facto means lower housing costs (or lower enegy, food ect.) I'm stuck on a 1970's fractal for my trading decisions and I see just one thing. Higher priced essentials with declining real income. Now if Treasury rates spike higher it's a whole new ball game but the Fed, Congress and the tape all indicate to me a move toward inflation rather than steady prices.
Oh gee... just because HUNDREDS of civilizations have succumbed to fiat monetary abuse.. and becaue NONE have survived it... and because YOU are wrapped in the flag of "Rah, rah USA"... we're supposed to have faith in your confidence? It's not an "old and uneducated parallel" as you have spewn... it's historical FACT! I've got nothing "to sell"... we ALL should be in "survival mode"...
Yes! There is no doubt that rental unit housing will see price appreciation. 1) Banks tightened lending standards on mortgages in draconian fashion. No more interest-only loans, 5% down loans, or insane ARMs. 2) Fewer people qualify for mortgages now than before, by large margins. 3) Fewer people, even those with good FICO scores, have 20%, let alone 10% down, to buy a house. 4) Rental units don't carry nearly the same carrying costs that owner-occupied housing does (property taxes, insurance, etc.). 5) Mortgage rates are rising and will only go higher.
Well my point is obvious, eh? You hinted that a loose BOJ had no effect on boosting asset prices in Japan. I responded that real estate prices in Tokyo are STILL sky high-in fact the highest in the world. What would it take for deflation? A strong dollar caused by rising U.S. interest rates. If that develops then watch out below. I've made that bet a few times the past year and got my ass chewed. We're following the Japanese model. A soft landing for assets while wage earners and savers take it up the ass.
I have another fact for you: in about 10 billion years our Sun is going to go nova; it's obvious that the cause is fiat monetary abuse by hundreds of civilizations on this planet. Bad implies bad, so it must be the cause. Another historical fact: Greenspan lowered interest rates a lot 7 years ago, thus boosting equity prices, so he must be responsible for the $5 I've pulled out of my recent GM trade. Christ already - just because you can associate two things does not mean they are dependent upon each other, that seems to be the core logic of ET. You already made an assumption that is incorrect: did I make any mention of being "rah rah rah USA??" Please quote it, as we all know your positions are extremely accurate, so I must have said comments regarding my "Rah rah USA" stance. There's no way you could have, again, drawn an incorrect parallel between my comment about a type of monetary policy and something totally unmentioned. No way.... Wait, I must be "rah rah everyothercivilizationthatusedfiatcurrency". Thanks for letting me know!
I was going to comment about that Dow chart in honest constant dollars.. I was going to comment about about the Fed protecting our dollars since 1913. I was going to comment about the Fed owning us ,but I can only comment on how proud I am of the American sheeple with their understanding of how our political and economic systems work. Knowing their understanding I can sleep soundly confident that all is well in the North American Union.