I would say inflation concerns are the fundamental basis that drives my investment decisions. Inflation is the driver of this housing bubble, thus I chose not to invest in housing right now. To clarify I’m talking about the extreme increase in money/credit supply fueling these asset bubbles. All one has to do is take a look back through history and see how similar periods of drastic increases in money supply end.
You don’t have to be a seer and try to predict another 1929 but you can sure be open to periods where the financial fundaments look really shakey and hedge yourself appropriately.
To me its really not that complicated. We (and I mean the people and govt) are spending far more then we earn and doing so only with the assistance of foreigners. That will end and its not very different then what some of these families are facing right now with their investment decision to buy a bigger house.
