OT: “Dollar About to take a Direct Hit”

[5yearwaiter]

[quote=scaredycat]whatever result screws me is the one most likely to occur. but seriously, does dollar devaluation send house prices up or down?[/quote]

Seriously no one can expect correctly which way house prices would go. If it goes high interest rates though the housing is in high stake – who will buy in such interest rates? I would leave this topic to all of you for the correct guess on housing will go high or low when $ devaluation occur.

[partypup]

[quote=5yearwaiter][quote=scaredycat]whatever result screws me is the one most likely to occur. but seriously, does dollar devaluation send house prices up or down?[/quote]

Seriously no one can expect correctly which way house prices would go. If it goes high interest rates though the housing is in high stake – who will buy in such interest rates? I would leave this topic to all of you for the correct guess on housing will go high or low when $ devaluation occur.[/quote]

Here is the problem that I see with housing: demand and interest rates.

While everyone needs a roof over their head, they most certainly do not need an expensive one, and they most certainly do not need a roof that thew “own” or even have to themselves. The more likely scenario, IMO, would be an increase in the number of renters, an increase in the demand for more affordable rentals and an increase in the number of people who are sharing a home. I am seeing this already on the Westside of LA.

The key driver for all of this will be unemployment. We all know that *real* unemployment is closer to 20%, which means we are now reaching depression levels. When layoffs begin to seriously skyrocket next year, we can easily see *real* unemployment reach 30%. At that level, the demand for new and existing homes will literally crater.

Add to that the fact that a USD currency crisis will send bond rates MUCH higher (think the 70s on steroids), and mortgage rates will follow. My parents had an 18% rate on their new home in 1978. If we were to get anywhere close to that now (and we all know that this country is in a much worse position fiscally than we were in the 70s), then the demand for homes will go through the floor.

AND add to this the fact that people will be reluctant to part with whatever cash they do have and hand it over for down payments, which will have to be more than 20% to 30% as banks fail en masse and lending tightens even further. Lastly, think of the number of people who will even have 800 FICOs next year. We’re talking about a rapidly-diminishing group of people who will be assaulted by higher food and energy prices and the fear of layoffs. People are going to hang onto their savings out of a fear of the future. This does not bode well for housing.

Seriously, all around, it is just a very, very grim situation for housing.

Food and energy, on the other hand, will skyrocket. People need food to keep breathing and moving, they will have a hard time sharing food the way they share homes, it is cheaper than housing, people will be focused more on investments in their survival, not their portfolios, and no down payment or credit check is required to purchase food. Oil, which is currently dollar-denominated but likely not for long, will shoot skyward when the dollar collapses. Oil has been too cheap for too long in the US (anyone who travels to Europe, Africa or Latin America knows the *true* price of oil), and we are about to join the rest of the world in that regard.

We are soon going back to the old world, my friends: homes will be viewed simply as shelter (not investments), and more effort will be spent each day simply trying to secure food and energy sources. If this sounds medieval, it is. Welcome to the Dark Ages. The good news is that we won’t be there forever, and if you are smart enough to make it through the transition healthy and with some *real* wealth in hand, then you will be able to reap the many opportunities that will present themselves after the reset button is pushed and we finish re-booting this country.

[partypup]

[quote=5yearwaiter][quote=scaredycat]whatever result screws me is the one most likely to occur. but seriously, does dollar devaluation send house prices up or down?[/quote]

Seriously no one can expect correctly which way house prices would go. If it goes high interest rates though the housing is in high stake – who will buy in such interest rates? I would leave this topic to all of you for the correct guess on housing will go high or low when $ devaluation occur.[/quote]

Here is the problem that I see with housing: demand and interest rates.

While everyone needs a roof over their head, they most certainly do not need an expensive one, and they most certainly do not need a roof that thew “own” or even have to themselves. The more likely scenario, IMO, would be an increase in the number of renters, an increase in the demand for more affordable rentals and an increase in the number of people who are sharing a home. I am seeing this already on the Westside of LA.

The key driver for all of this will be unemployment. We all know that *real* unemployment is closer to 20%, which means we are now reaching depression levels. When layoffs begin to seriously skyrocket next year, we can easily see *real* unemployment reach 30%. At that level, the demand for new and existing homes will literally crater.

Add to that the fact that a USD currency crisis will send bond rates MUCH higher (think the 70s on steroids), and mortgage rates will follow. My parents had an 18% rate on their new home in 1978. If we were to get anywhere close to that now (and we all know that this country is in a much worse position fiscally than we were in the 70s), then the demand for homes will go through the floor.

AND add to this the fact that people will be reluctant to part with whatever cash they do have and hand it over for down payments, which will have to be more than 20% to 30% as banks fail en masse and lending tightens even further. Lastly, think of the number of people who will even have 800 FICOs next year. We’re talking about a rapidly-diminishing group of people who will be assaulted by higher food and energy prices and the fear of layoffs. People are going to hang onto their savings out of a fear of the future. This does not bode well for housing.

Seriously, all around, it is just a very, very grim situation for housing.

Food and energy, on the other hand, will skyrocket. People need food to keep breathing and moving, they will have a hard time sharing food the way they share homes, it is cheaper than housing, people will be focused more on investments in their survival, not their portfolios, and no down payment or credit check is required to purchase food. Oil, which is currently dollar-denominated but likely not for long, will shoot skyward when the dollar collapses. Oil has been too cheap for too long in the US (anyone who travels to Europe, Africa or Latin America knows the *true* price of oil), and we are about to join the rest of the world in that regard.

We are soon going back to the old world, my friends: homes will be viewed simply as shelter (not investments), and more effort will be spent each day simply trying to secure food and energy sources. If this sounds medieval, it is. Welcome to the Dark Ages. The good news is that we won’t be there forever, and if you are smart enough to make it through the transition healthy and with some *real* wealth in hand, then you will be able to reap the many opportunities that will present themselves after the reset button is pushed and we finish re-booting this country.

[partypup]

[quote=5yearwaiter][quote=scaredycat]whatever result screws me is the one most likely to occur. but seriously, does dollar devaluation send house prices up or down?[/quote]

Seriously no one can expect correctly which way house prices would go. If it goes high interest rates though the housing is in high stake – who will buy in such interest rates? I would leave this topic to all of you for the correct guess on housing will go high or low when $ devaluation occur.[/quote]

Here is the problem that I see with housing: demand and interest rates.

While everyone needs a roof over their head, they most certainly do not need an expensive one, and they most certainly do not need a roof that thew “own” or even have to themselves. The more likely scenario, IMO, would be an increase in the number of renters, an increase in the demand for more affordable rentals and an increase in the number of people who are sharing a home. I am seeing this already on the Westside of LA.

The key driver for all of this will be unemployment. We all know that *real* unemployment is closer to 20%, which means we are now reaching depression levels. When layoffs begin to seriously skyrocket next year, we can easily see *real* unemployment reach 30%. At that level, the demand for new and existing homes will literally crater.

Add to that the fact that a USD currency crisis will send bond rates MUCH higher (think the 70s on steroids), and mortgage rates will follow. My parents had an 18% rate on their new home in 1978. If we were to get anywhere close to that now (and we all know that this country is in a much worse position fiscally than we were in the 70s), then the demand for homes will go through the floor.

AND add to this the fact that people will be reluctant to part with whatever cash they do have and hand it over for down payments, which will have to be more than 20% to 30% as banks fail en masse and lending tightens even further. Lastly, think of the number of people who will even have 800 FICOs next year. We’re talking about a rapidly-diminishing group of people who will be assaulted by higher food and energy prices and the fear of layoffs. People are going to hang onto their savings out of a fear of the future. This does not bode well for housing.

Seriously, all around, it is just a very, very grim situation for housing.

Food and energy, on the other hand, will skyrocket. People need food to keep breathing and moving, they will have a hard time sharing food the way they share homes, it is cheaper than housing, people will be focused more on investments in their survival, not their portfolios, and no down payment or credit check is required to purchase food. Oil, which is currently dollar-denominated but likely not for long, will shoot skyward when the dollar collapses. Oil has been too cheap for too long in the US (anyone who travels to Europe, Africa or Latin America knows the *true* price of oil), and we are about to join the rest of the world in that regard.

We are soon going back to the old world, my friends: homes will be viewed simply as shelter (not investments), and more effort will be spent each day simply trying to secure food and energy sources. If this sounds medieval, it is. Welcome to the Dark Ages. The good news is that we won’t be there forever, and if you are smart enough to make it through the transition healthy and with some *real* wealth in hand, then you will be able to reap the many opportunities that will present themselves after the reset button is pushed and we finish re-booting this country.

[partypup]

[quote=5yearwaiter][quote=scaredycat]whatever result screws me is the one most likely to occur. but seriously, does dollar devaluation send house prices up or down?[/quote]

Seriously no one can expect correctly which way house prices would go. If it goes high interest rates though the housing is in high stake – who will buy in such interest rates? I would leave this topic to all of you for the correct guess on housing will go high or low when $ devaluation occur.[/quote]

Here is the problem that I see with housing: demand and interest rates.

While everyone needs a roof over their head, they most certainly do not need an expensive one, and they most certainly do not need a roof that thew “own” or even have to themselves. The more likely scenario, IMO, would be an increase in the number of renters, an increase in the demand for more affordable rentals and an increase in the number of people who are sharing a home. I am seeing this already on the Westside of LA.

The key driver for all of this will be unemployment. We all know that *real* unemployment is closer to 20%, which means we are now reaching depression levels. When layoffs begin to seriously skyrocket next year, we can easily see *real* unemployment reach 30%. At that level, the demand for new and existing homes will literally crater.

Add to that the fact that a USD currency crisis will send bond rates MUCH higher (think the 70s on steroids), and mortgage rates will follow. My parents had an 18% rate on their new home in 1978. If we were to get anywhere close to that now (and we all know that this country is in a much worse position fiscally than we were in the 70s), then the demand for homes will go through the floor.

AND add to this the fact that people will be reluctant to part with whatever cash they do have and hand it over for down payments, which will have to be more than 20% to 30% as banks fail en masse and lending tightens even further. Lastly, think of the number of people who will even have 800 FICOs next year. We’re talking about a rapidly-diminishing group of people who will be assaulted by higher food and energy prices and the fear of layoffs. People are going to hang onto their savings out of a fear of the future. This does not bode well for housing.

Seriously, all around, it is just a very, very grim situation for housing.

Food and energy, on the other hand, will skyrocket. People need food to keep breathing and moving, they will have a hard time sharing food the way they share homes, it is cheaper than housing, people will be focused more on investments in their survival, not their portfolios, and no down payment or credit check is required to purchase food. Oil, which is currently dollar-denominated but likely not for long, will shoot skyward when the dollar collapses. Oil has been too cheap for too long in the US (anyone who travels to Europe, Africa or Latin America knows the *true* price of oil), and we are about to join the rest of the world in that regard.

We are soon going back to the old world, my friends: homes will be viewed simply as shelter (not investments), and more effort will be spent each day simply trying to secure food and energy sources. If this sounds medieval, it is. Welcome to the Dark Ages. The good news is that we won’t be there forever, and if you are smart enough to make it through the transition healthy and with some *real* wealth in hand, then you will be able to reap the many opportunities that will present themselves after the reset button is pushed and we finish re-booting this country.

[partypup]

[quote=5yearwaiter][quote=scaredycat]whatever result screws me is the one most likely to occur. but seriously, does dollar devaluation send house prices up or down?[/quote]

Seriously no one can expect correctly which way house prices would go. If it goes high interest rates though the housing is in high stake – who will buy in such interest rates? I would leave this topic to all of you for the correct guess on housing will go high or low when $ devaluation occur.[/quote]

Here is the problem that I see with housing: demand and interest rates.

While everyone needs a roof over their head, they most certainly do not need an expensive one, and they most certainly do not need a roof that thew “own” or even have to themselves. The more likely scenario, IMO, would be an increase in the number of renters, an increase in the demand for more affordable rentals and an increase in the number of people who are sharing a home. I am seeing this already on the Westside of LA.

The key driver for all of this will be unemployment. We all know that *real* unemployment is closer to 20%, which means we are now reaching depression levels. When layoffs begin to seriously skyrocket next year, we can easily see *real* unemployment reach 30%. At that level, the demand for new and existing homes will literally crater.

Add to that the fact that a USD currency crisis will send bond rates MUCH higher (think the 70s on steroids), and mortgage rates will follow. My parents had an 18% rate on their new home in 1978. If we were to get anywhere close to that now (and we all know that this country is in a much worse position fiscally than we were in the 70s), then the demand for homes will go through the floor.

AND add to this the fact that people will be reluctant to part with whatever cash they do have and hand it over for down payments, which will have to be more than 20% to 30% as banks fail en masse and lending tightens even further. Lastly, think of the number of people who will even have 800 FICOs next year. We’re talking about a rapidly-diminishing group of people who will be assaulted by higher food and energy prices and the fear of layoffs. People are going to hang onto their savings out of a fear of the future. This does not bode well for housing.

Seriously, all around, it is just a very, very grim situation for housing.

Food and energy, on the other hand, will skyrocket. People need food to keep breathing and moving, they will have a hard time sharing food the way they share homes, it is cheaper than housing, people will be focused more on investments in their survival, not their portfolios, and no down payment or credit check is required to purchase food. Oil, which is currently dollar-denominated but likely not for long, will shoot skyward when the dollar collapses. Oil has been too cheap for too long in the US (anyone who travels to Europe, Africa or Latin America knows the *true* price of oil), and we are about to join the rest of the world in that regard.

We are soon going back to the old world, my friends: homes will be viewed simply as shelter (not investments), and more effort will be spent each day simply trying to secure food and energy sources. If this sounds medieval, it is. Welcome to the Dark Ages. The good news is that we won’t be there forever, and if you are smart enough to make it through the transition healthy and with some *real* wealth in hand, then you will be able to reap the many opportunities that will present themselves after the reset button is pushed and we finish re-booting this country.

[partypup]

[quote=Eugene]I rarely agree with Mish, but this time he’s spot on:

Ridiculous hype over secret oil meetings
[/quote]

With all due respect to Mish, whom I have read regularly throughout the years, I think he is missing the boat.

First, it doesn’t matter what he deems as “ridiculous hype”. The ONLY thing that really matters is what the bulk of investors believe and feel, and what their confidence level is in the dollar. Witness the fact that the dollar had been swooning in earnest long before these “secret meetings” were divulged. Gold touched $1024 two weeks ago before this article even broke. What was the “ridiculous hype” that was pushing gold higher then? There was none. The rest of the world – and a growing number of investors – are simply starting to get freaked out and fed up.

We all know that the global financial system is currently nothing more than a sophisticated, high-stakes Ponzi scheme. Our government shuffles paper around to mask its insolvency, and banks cling to meager reserves in the hopes that runs aren’t in their future. This whole system sits on a gigantic bed of kindling, and it only requires the tiniest spark to send it up in flames.

So the focus really shouldn’t be on whether the story has been hyped or whether it has any truth. The focus should be on the fact that investors THINK it’s true, and the very fact that they even believe this is telling. Because it means that the one thing that was keeping the dollar afloat – confidence – has now been lost.

Without confidence, this con game FAILS.

[partypup]

[quote=Eugene]I rarely agree with Mish, but this time he’s spot on:

Ridiculous hype over secret oil meetings
[/quote]

With all due respect to Mish, whom I have read regularly throughout the years, I think he is missing the boat.

First, it doesn’t matter what he deems as “ridiculous hype”. The ONLY thing that really matters is what the bulk of investors believe and feel, and what their confidence level is in the dollar. Witness the fact that the dollar had been swooning in earnest long before these “secret meetings” were divulged. Gold touched $1024 two weeks ago before this article even broke. What was the “ridiculous hype” that was pushing gold higher then? There was none. The rest of the world – and a growing number of investors – are simply starting to get freaked out and fed up.

We all know that the global financial system is currently nothing more than a sophisticated, high-stakes Ponzi scheme. Our government shuffles paper around to mask its insolvency, and banks cling to meager reserves in the hopes that runs aren’t in their future. This whole system sits on a gigantic bed of kindling, and it only requires the tiniest spark to send it up in flames.

So the focus really shouldn’t be on whether the story has been hyped or whether it has any truth. The focus should be on the fact that investors THINK it’s true, and the very fact that they even believe this is telling. Because it means that the one thing that was keeping the dollar afloat – confidence – has now been lost.

Without confidence, this con game FAILS.

[partypup]

[quote=Eugene]I rarely agree with Mish, but this time he’s spot on:

Ridiculous hype over secret oil meetings
[/quote]

With all due respect to Mish, whom I have read regularly throughout the years, I think he is missing the boat.

First, it doesn’t matter what he deems as “ridiculous hype”. The ONLY thing that really matters is what the bulk of investors believe and feel, and what their confidence level is in the dollar. Witness the fact that the dollar had been swooning in earnest long before these “secret meetings” were divulged. Gold touched $1024 two weeks ago before this article even broke. What was the “ridiculous hype” that was pushing gold higher then? There was none. The rest of the world – and a growing number of investors – are simply starting to get freaked out and fed up.

We all know that the global financial system is currently nothing more than a sophisticated, high-stakes Ponzi scheme. Our government shuffles paper around to mask its insolvency, and banks cling to meager reserves in the hopes that runs aren’t in their future. This whole system sits on a gigantic bed of kindling, and it only requires the tiniest spark to send it up in flames.

So the focus really shouldn’t be on whether the story has been hyped or whether it has any truth. The focus should be on the fact that investors THINK it’s true, and the very fact that they even believe this is telling. Because it means that the one thing that was keeping the dollar afloat – confidence – has now been lost.

Without confidence, this con game FAILS.

[partypup]

[quote=Eugene]I rarely agree with Mish, but this time he’s spot on:

Ridiculous hype over secret oil meetings
[/quote]

With all due respect to Mish, whom I have read regularly throughout the years, I think he is missing the boat.

First, it doesn’t matter what he deems as “ridiculous hype”. The ONLY thing that really matters is what the bulk of investors believe and feel, and what their confidence level is in the dollar. Witness the fact that the dollar had been swooning in earnest long before these “secret meetings” were divulged. Gold touched $1024 two weeks ago before this article even broke. What was the “ridiculous hype” that was pushing gold higher then? There was none. The rest of the world – and a growing number of investors – are simply starting to get freaked out and fed up.

We all know that the global financial system is currently nothing more than a sophisticated, high-stakes Ponzi scheme. Our government shuffles paper around to mask its insolvency, and banks cling to meager reserves in the hopes that runs aren’t in their future. This whole system sits on a gigantic bed of kindling, and it only requires the tiniest spark to send it up in flames.

So the focus really shouldn’t be on whether the story has been hyped or whether it has any truth. The focus should be on the fact that investors THINK it’s true, and the very fact that they even believe this is telling. Because it means that the one thing that was keeping the dollar afloat – confidence – has now been lost.

Without confidence, this con game FAILS.

[partypup]

[quote=Eugene]I rarely agree with Mish, but this time he’s spot on:

Ridiculous hype over secret oil meetings
[/quote]

With all due respect to Mish, whom I have read regularly throughout the years, I think he is missing the boat.

First, it doesn’t matter what he deems as “ridiculous hype”. The ONLY thing that really matters is what the bulk of investors believe and feel, and what their confidence level is in the dollar. Witness the fact that the dollar had been swooning in earnest long before these “secret meetings” were divulged. Gold touched $1024 two weeks ago before this article even broke. What was the “ridiculous hype” that was pushing gold higher then? There was none. The rest of the world – and a growing number of investors – are simply starting to get freaked out and fed up.

We all know that the global financial system is currently nothing more than a sophisticated, high-stakes Ponzi scheme. Our government shuffles paper around to mask its insolvency, and banks cling to meager reserves in the hopes that runs aren’t in their future. This whole system sits on a gigantic bed of kindling, and it only requires the tiniest spark to send it up in flames.

So the focus really shouldn’t be on whether the story has been hyped or whether it has any truth. The focus should be on the fact that investors THINK it’s true, and the very fact that they even believe this is telling. Because it means that the one thing that was keeping the dollar afloat – confidence – has now been lost.

Without confidence, this con game FAILS.

[briansd1]

I think that the con game has been played around the world by all parties, not just America.

So in that regard, we are still strong relative to others.

The Euro is not much better and Japan is even more broke then we are. The Japanese export more but their lunch is being eaten by the Chinese and the Koreans.

China has large foreign reserves by its government is very secretive and government spending is out of control.

Sure, the US Dollar is losing strength but what will replace the Dollar as the reserve currency and the currency of international commerce? Nothing.

At least we have a strong military to back up our currency so we’ll just print more to pay interest on our debts — all denominated in Dollar.

I don’t see the Dollar losing reserve status anytime soon. The decline will be slow, not abrupt. But unless we fix our finances, our kids, when they grow up, will no longer feel rich when they travel overseas (it’s already happened in the last 20 years or so).

[briansd1]

I think that the con game has been played around the world by all parties, not just America.

So in that regard, we are still strong relative to others.

The Euro is not much better and Japan is even more broke then we are. The Japanese export more but their lunch is being eaten by the Chinese and the Koreans.

China has large foreign reserves by its government is very secretive and government spending is out of control.

Sure, the US Dollar is losing strength but what will replace the Dollar as the reserve currency and the currency of international commerce? Nothing.

At least we have a strong military to back up our currency so we’ll just print more to pay interest on our debts — all denominated in Dollar.

I don’t see the Dollar losing reserve status anytime soon. The decline will be slow, not abrupt. But unless we fix our finances, our kids, when they grow up, will no longer feel rich when they travel overseas (it’s already happened in the last 20 years or so).

[briansd1]

I think that the con game has been played around the world by all parties, not just America.

So in that regard, we are still strong relative to others.

The Euro is not much better and Japan is even more broke then we are. The Japanese export more but their lunch is being eaten by the Chinese and the Koreans.

China has large foreign reserves by its government is very secretive and government spending is out of control.

Sure, the US Dollar is losing strength but what will replace the Dollar as the reserve currency and the currency of international commerce? Nothing.

At least we have a strong military to back up our currency so we’ll just print more to pay interest on our debts — all denominated in Dollar.

I don’t see the Dollar losing reserve status anytime soon. The decline will be slow, not abrupt. But unless we fix our finances, our kids, when they grow up, will no longer feel rich when they travel overseas (it’s already happened in the last 20 years or so).

[briansd1]

I think that the con game has been played around the world by all parties, not just America.

So in that regard, we are still strong relative to others.

The Euro is not much better and Japan is even more broke then we are. The Japanese export more but their lunch is being eaten by the Chinese and the Koreans.

China has large foreign reserves by its government is very secretive and government spending is out of control.

Sure, the US Dollar is losing strength but what will replace the Dollar as the reserve currency and the currency of international commerce? Nothing.

At least we have a strong military to back up our currency so we’ll just print more to pay interest on our debts — all denominated in Dollar.

I don’t see the Dollar losing reserve status anytime soon. The decline will be slow, not abrupt. But unless we fix our finances, our kids, when they grow up, will no longer feel rich when they travel overseas (it’s already happened in the last 20 years or so).

[Author]

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