I think we have to assume that Mr Bernanke and Mr Paulson will do everything they can to maintain the current economic status quo.
Hiding the M-3 money aggregates in March of this year made their job easier. They can now run the printing presses with less oversight.
It is probably reasonable to assume that they will try to maintain the housing market or revive it if it turns down significantly.
Another poster pointed out that tax incentives could be offered for real estate investment.
More frightening than additional tax breaks would be some kind of “every American deserves to own a home” program with huge subsidies provided by the government.
These subsidies could be offered in many different ways. Maybe special housing grants to city workers (police, fire, EMT, etc) for purchasing a home in expensive cities. Same thing for teachers, etc. How about housing grants for military service? Get $20K in mortgage credit per year of service!
Given unlimitted access to the printing presses that produce the world’s reserve currency (for now) there are lots of options.
We might even see housing grants for 13 million illegal (oops, I mean ‘undocumented’) aliens.
For that matter, why bother subsidizing the purchase? Why not buy some of the vacant condos as housing for government/civil workers? Provide it as part of the pay package.
Sounds far fetched doesn’t it?
I’m trying not to underestimate the absurdity of what our government and central banking system might attempt in the next few years.
The article linked below sums up why I moved my investment money out of real estate and into the precious metals. This is a real estate holding company summarizing why they are selling their real estate holdings ($350 million worth!):
“There is virtually no upside left, and instead, tremendous downside risk. There will be a significant “flight to quality” by lenders and investors. The risk of remaining heavily invested in real estate is extremely high. Values are far more likely to fall precipitously than to rise modestly. Most real estate should therefore be sold and the extraordinary profits harvested. ” http://news.goldseek.com/DollarCollapse/1149879518.php
I believe the “flight to quality” that they refer to will drive gold to at least $1650/oz and silver to $80/oz.
I own the real estate that I currently live in and plan to keep it. I have stopped telling other people what they should do inre real estate and investing but I am always willing to share what I have done and why. In a nutshell: sell investment real estate and buy precious metals.
