For many of us, we have heard commentators talking about the slow housing recovery however, if you believe a slow housing recovery is what is happening, I beg to differ.
I have been preaching now….for at least 6 months or so, hyperinflation could be coming and after what happened last week with the Federal Reserve, I am not just speculating anymore but, predicting we will enter an era of hyperinflation. Granted, several factors need to come into play but, make no mistake, the stage has been set and the players have been cast.
Last week, the Federal Reserve decided to print almost a Trillion dollars in order to buy, almost a Trillion dollars worth of Federal Debt. This is just like you, using your Brother Multi-function printer, scanner, copier to print out some money and use it to buy your own debt back from one of your creditors. Obviously, the money you printed is absolutely no good and therefore, you end up being unable to pay off your debt and in return, go bankrupt. The problem is, it’s not that easy when we are talking about national financial planning, or lack thereof.
Ultimately, when a country, like the USA, buys back our own debt we cause inflation but, that isn’t all we do. We also deflate the dollar or cause the dollar to decline against foreign currencies. In other words, inflations skyrockets and the value of your dollar drops. It’s exactly like what happened to Germany in the Weimar Republic, see wiki link http://en.wikipedia.org/wiki/Weimar_Republic
So, how does this impact real estate, you may be asking….well, let me elaborate a bit more.
You need to keep in the back of your head, the real estate bubble still hasn’t stopped bursting. We still have hundreds of thousands of homeowners on ARMs or other high risk lending packages that will be resetting for up to the next 2-4 years. If we go through a time of hyperinflation, these people will be priced out of their homes, days…..not years. We will flood the market with an unbelieveable amount of inventory or banks will be required to hold the inventory, similarly to what they are doing now voluntarily….so we are told.
Either way, the realestate market is doomed. If banks keep these toxic assets on their books and don’t have the necessary liquidity to fulfill the demands of withdrawals because all their money is tied up or even worse, they don’t have any money because they made so many bad loans…..we have a “Great” Depression…..like this country has never seen. Not to mention, since the US Dollar is the World’s reserve currency, we potentially could….and most likely will, take down most all of the World with us.
If you believe what I say is crazy talk or I have lost my mind, listen to what China and Germany have already said. http://www.reuters.com/article/idUSTRE6A12IA20101108
I am not trying to scare any of you….I am hoping and praying that you will research this for yourself and make your own conclusions and prepare yourself and families for what could happen. Yes, my family does have a “disaster” plan…….I know that may sound a bit spooky but, I have tried to live my life with a couple quotes in my mind and one of those is, “Luck favors the prepared” and, in this economy, luck can go a long way.
My point is, if the Fed continues with their Quantative Easement or Debt Monetization, this country will enter a time like none we have ever seen. The worse part of all this is, what if the people I listen to, the people I know who know much more about this stuff than I do…….what if they are right?
