Real estate will tank entirely. It simply can’t survive what’s coming. In fact, anything other than basic necessities will suffer severe deflation (iPods, cars, stereos, Kindles, etc).
Basic necessities will experience heavy inflation, and even a brief period of hyperinflation until we transition to a new global currency (backed by gold, of course).
Unless you plan to live in the property you are buying for at least a decade, I’d think twice about making the purchase.
Today seems to have been a turning point for a lot of people in the market. The shadow of 9/11 hung over the markets all day, but in a different way than it has in previous years. We are 8 years away from that event, but not until today did I sense a growing realization that something is shifting. It was almost as if the memory of the 9/11 tragedy reminded everyone today that America is more vulnerable – in ALL ways – than we previously thought. I suspect many investors may have gotten their very first glimpse of the black swan on the horizon, but they don’t know what to make of it yet.
I notice that Larry Kudlow was uncharateristically grim. He even had Pat Boone as a guest, reminiscing about the good ol’ days when America was strong, militarily and economically. It felt a lot like a wake to me. It was pretty sad.
As for what defines “collapse”: when the dollar loses its status as the world’s sole reserve currency, that will essentially be the day that the currency collapses. Because we simply do not have the means to support ourselves without printing money that others must accept. Once the dollar is rejected, the price of imports will skyrocket (there’s your hyperinflation), and we will enter uncharted territory with all manner of repercussions and impact that I cannot even begin to address or predict.
The process will likely begin in earnest shortly after our fiscal year ends Sept 30. I’m hearing events will gather momentum in early November. Do what you need to protect your assets before then. By November of next year, we will probably be well on our way to a new currency that will, hopefully, bring greater price stability, albeit at the cost of demolishing everyone’s formerly-dollar denominated assets.
I know everyone hates to hear my “doom and gloom” forecasts, but with gold at $1006 and the dollar in freefall, I think we are really getting to the point where it is pretty difficult to ignore the approaching gloom. I would strongly encourage everyone to resist the temptation to put their necks in the sand and *hope* for the best, and instead at least consider what will happen to you IF I’m right. There’s no harm in hedging. If I’m wrong, then we’ll all walk away happy campers in the next year with spare gold and silver that we can liquidate for decent prices and a store of food and other necessities that we would need to consume anyway.
Let’s stop asking ourselves whether the worst WILL happen and start asking the more relevant question: what IF the worst does happen?
