I am not a financial or economic pro, but I just can’t understand how everything can keep going up in value, and how inflation isn’t a problem, when it seems like the only thing thats keeping our economy going is a crap load of loans and financing.
Everyone (wall street) acts like the economy is just fine, there will be a soft landing, and the fact that personal and national debts are at an all time high and growing is no big deal. Is anyone expected to pay off their debt, or is debt a new “concept” that goes like, “if you can afford it now, thats all that matters, perpetual debt is now OK”.
Incomes are not going up, but houses in socal are 3-4 times more expensive than they were just 10 years ago. Health care is up. Fuel is way up.(temporarily down, but you are kidding yourself if you believe the worst is over). Rents are going up. People are driving nicer cars, buying nicer LCD TV’s, and now we have cell phone bills/HDTV Sat bills, etc that we really didn’t have 10 years ago. Theres the illegal immigration costs. Where is this money coming from? How can we say inflation isn’t here?
How can the Jones’ buy a $600k home in Temecula(at 2%tax too), a new Suburban or two, commute to SD, furnish their home with granite, plasma, and stamped concrete, and actually pay off ANY debt? I know I currently make a lot less than you all, but who else plans on OWNING(not owing any $$ to anyone else) their car or home? How can all these mortgage brokers survive? There like a dime a dozen, how many are actually needed? I am confused.
I know a couple who makes what my wife and I do(just about $75k per year). They just bought a first home in Menifee for $385k. They feel like they got a steal because the price was reduced $20k. They did 100% financing. Now that they are struggling to make the payment, they have decided to move to Oregon. But their plan is to wait a year, so that they can make a $100k profit on their house, “like their neighbor did”. They said this so matter of fact, like everyone who owns a home just makes $100k per year, just like the past few years. They are not the only ones. There are tons of people doing this like its no big deal.
If they would make a 20% cash down mandatory, we wouldn’t have any of this bs. I am just confused, and disappointed in our countries lack of financial responsibility. I wonder when its all gonna hit the fan, and wonder what I can do to make it through. So far, I sold my home last summer, invested in some Gold, Oil, and CDs, thats about it. I haven’t made a whole lot yet, but I would have lost about $20k on the house if I stayed. I am happy with my decision, but I wonder whats best to do in the future.
Matt
