[Diego Mamani]

Desmond,

I pity your mom. I have a friend at work who bought in mid 2005 against my advice. He paid $900K and put 20% down. Now he wants to sell due to a job change, but he’s delusional. He has lowered his wishing price to $800K but even better houses than his are selling in the low $700s. So, the house now sits empty. With HOA, property tax, insurance, etc., his monthly expense is close to $5,000 (pre-tax).

He listed the house as a rental for $3500 but no one wants it. He has lowered his wishing rent to $3300, and I heard that another co-worker has offered him $3000.

Bitter owners, throwing money away on mortgage payments! This guy has lost more than his $180K down payment, and will probably lose more over the next 18-24 months. Of course, I never say “I told you so.”

[Diego Mamani]

Desmond,

I pity your mom. I have a friend at work who bought in mid 2005 against my advice. He paid $900K and put 20% down. Now he wants to sell due to a job change, but he’s delusional. He has lowered his wishing price to $800K but even better houses than his are selling in the low $700s. So, the house now sits empty. With HOA, property tax, insurance, etc., his monthly expense is close to $5,000 (pre-tax).

He listed the house as a rental for $3500 but no one wants it. He has lowered his wishing rent to $3300, and I heard that another co-worker has offered him $3000.

Bitter owners, throwing money away on mortgage payments! This guy has lost more than his $180K down payment, and will probably lose more over the next 18-24 months. Of course, I never say “I told you so.”

[Diego Mamani]

Desmond,

I pity your mom. I have a friend at work who bought in mid 2005 against my advice. He paid $900K and put 20% down. Now he wants to sell due to a job change, but he’s delusional. He has lowered his wishing price to $800K but even better houses than his are selling in the low $700s. So, the house now sits empty. With HOA, property tax, insurance, etc., his monthly expense is close to $5,000 (pre-tax).

He listed the house as a rental for $3500 but no one wants it. He has lowered his wishing rent to $3300, and I heard that another co-worker has offered him $3000.

Bitter owners, throwing money away on mortgage payments! This guy has lost more than his $180K down payment, and will probably lose more over the next 18-24 months. Of course, I never say “I told you so.”

[Diego Mamani]

Desmond,

I pity your mom. I have a friend at work who bought in mid 2005 against my advice. He paid $900K and put 20% down. Now he wants to sell due to a job change, but he’s delusional. He has lowered his wishing price to $800K but even better houses than his are selling in the low $700s. So, the house now sits empty. With HOA, property tax, insurance, etc., his monthly expense is close to $5,000 (pre-tax).

He listed the house as a rental for $3500 but no one wants it. He has lowered his wishing rent to $3300, and I heard that another co-worker has offered him $3000.

Bitter owners, throwing money away on mortgage payments! This guy has lost more than his $180K down payment, and will probably lose more over the next 18-24 months. Of course, I never say “I told you so.”

[Diego Mamani]

Desmond,

I pity your mom. I have a friend at work who bought in mid 2005 against my advice. He paid $900K and put 20% down. Now he wants to sell due to a job change, but he’s delusional. He has lowered his wishing price to $800K but even better houses than his are selling in the low $700s. So, the house now sits empty. With HOA, property tax, insurance, etc., his monthly expense is close to $5,000 (pre-tax).

He listed the house as a rental for $3500 but no one wants it. He has lowered his wishing rent to $3300, and I heard that another co-worker has offered him $3000.

Bitter owners, throwing money away on mortgage payments! This guy has lost more than his $180K down payment, and will probably lose more over the next 18-24 months. Of course, I never say “I told you so.”

[Diego Mamani]

Let’s see, here we have a nice guy who puts his money at risk and asks for some reasonable protection, and you think he’s overdoing it?

No wonder they say that no good deed goes unpunished! Do you realize that you come across as ungrateful?

If you don’t like the terms, pay the loan off! If you can’t pay it off, borrow from the bank and then pay it off. If you can’t borrow from the bank, then be grateful to this generous man, as he’s probably getting a below-market return for HIS hard-earned money.

And what’s with it taking 5 years? That’s way too long. What is wrong with paying back to his niece if he dies? Were you hoping to steal his money in case he passes away? Of course it’s reasonable to have to pay the money back to his niece. It’s HIS money, remember?

That’s why I never lend to people who only know about spending money but not about earning and saving it.

[Diego Mamani]

Let’s see, here we have a nice guy who puts his money at risk and asks for some reasonable protection, and you think he’s overdoing it?

No wonder they say that no good deed goes unpunished! Do you realize that you come across as ungrateful?

If you don’t like the terms, pay the loan off! If you can’t pay it off, borrow from the bank and then pay it off. If you can’t borrow from the bank, then be grateful to this generous man, as he’s probably getting a below-market return for HIS hard-earned money.

And what’s with it taking 5 years? That’s way too long. What is wrong with paying back to his niece if he dies? Were you hoping to steal his money in case he passes away? Of course it’s reasonable to have to pay the money back to his niece. It’s HIS money, remember?

That’s why I never lend to people who only know about spending money but not about earning and saving it.

[Diego Mamani]

Let’s see, here we have a nice guy who puts his money at risk and asks for some reasonable protection, and you think he’s overdoing it?

No wonder they say that no good deed goes unpunished! Do you realize that you come across as ungrateful?

If you don’t like the terms, pay the loan off! If you can’t pay it off, borrow from the bank and then pay it off. If you can’t borrow from the bank, then be grateful to this generous man, as he’s probably getting a below-market return for HIS hard-earned money.

And what’s with it taking 5 years? That’s way too long. What is wrong with paying back to his niece if he dies? Were you hoping to steal his money in case he passes away? Of course it’s reasonable to have to pay the money back to his niece. It’s HIS money, remember?

That’s why I never lend to people who only know about spending money but not about earning and saving it.

[Diego Mamani]

Let’s see, here we have a nice guy who puts his money at risk and asks for some reasonable protection, and you think he’s overdoing it?

No wonder they say that no good deed goes unpunished! Do you realize that you come across as ungrateful?

If you don’t like the terms, pay the loan off! If you can’t pay it off, borrow from the bank and then pay it off. If you can’t borrow from the bank, then be grateful to this generous man, as he’s probably getting a below-market return for HIS hard-earned money.

And what’s with it taking 5 years? That’s way too long. What is wrong with paying back to his niece if he dies? Were you hoping to steal his money in case he passes away? Of course it’s reasonable to have to pay the money back to his niece. It’s HIS money, remember?

That’s why I never lend to people who only know about spending money but not about earning and saving it.

[Diego Mamani]

Let’s see, here we have a nice guy who puts his money at risk and asks for some reasonable protection, and you think he’s overdoing it?

No wonder they say that no good deed goes unpunished! Do you realize that you come across as ungrateful?

If you don’t like the terms, pay the loan off! If you can’t pay it off, borrow from the bank and then pay it off. If you can’t borrow from the bank, then be grateful to this generous man, as he’s probably getting a below-market return for HIS hard-earned money.

And what’s with it taking 5 years? That’s way too long. What is wrong with paying back to his niece if he dies? Were you hoping to steal his money in case he passes away? Of course it’s reasonable to have to pay the money back to his niece. It’s HIS money, remember?

That’s why I never lend to people who only know about spending money but not about earning and saving it.

[Diego Mamani]

Stockstradr (the OP): How do you define hyperinflation? I’m convinced that inflation will shoot up in the near/medium term, but I’m also absolutely convinced that we won’t have hyperinflation in the USA.

Hyperinflation is not just “high inflation” (of say, in the 8%-15% range). Hyperinflation is what happened in Germany in the inter-war period, when prices went up within the same day! It happened again in some South American countries in the late 1980s, when governments thought that they could inflate their problems away (sounds familiar?).

With hyperinflation, prices can double in a few days. You go to a bar and your second beer will cost more than the first. (You could order all your beers at once, to save money, but they’ll go flat. An economists’ joke is that you must find the optimum equilibrium between the beer’s foam decreasing rate relative to the inflation rate).

The implication for the housing bubble is that nominal house prices will not drop as much as we anticipated back in 2005 because of high inflation in 2008-2012. This won’t matter for real (inflation-adjusted) prices: they’ll drop the same as they would have without a high inflation scenario.

After all, what matters is the purchasing value of the dollar we use to buy a house: as the dollar’s value falls (due to the current inflationary Fed policies), we need more dollars to pay for the same value as before.

[Diego Mamani]

Stockstradr (the OP): How do you define hyperinflation? I’m convinced that inflation will shoot up in the near/medium term, but I’m also absolutely convinced that we won’t have hyperinflation in the USA.

Hyperinflation is not just “high inflation” (of say, in the 8%-15% range). Hyperinflation is what happened in Germany in the inter-war period, when prices went up within the same day! It happened again in some South American countries in the late 1980s, when governments thought that they could inflate their problems away (sounds familiar?).

With hyperinflation, prices can double in a few days. You go to a bar and your second beer will cost more than the first. (You could order all your beers at once, to save money, but they’ll go flat. An economists’ joke is that you must find the optimum equilibrium between the beer’s foam decreasing rate relative to the inflation rate).

The implication for the housing bubble is that nominal house prices will not drop as much as we anticipated back in 2005 because of high inflation in 2008-2012. This won’t matter for real (inflation-adjusted) prices: they’ll drop the same as they would have without a high inflation scenario.

After all, what matters is the purchasing value of the dollar we use to buy a house: as the dollar’s value falls (due to the current inflationary Fed policies), we need more dollars to pay for the same value as before.

[Diego Mamani]

Stockstradr (the OP): How do you define hyperinflation? I’m convinced that inflation will shoot up in the near/medium term, but I’m also absolutely convinced that we won’t have hyperinflation in the USA.

Hyperinflation is not just “high inflation” (of say, in the 8%-15% range). Hyperinflation is what happened in Germany in the inter-war period, when prices went up within the same day! It happened again in some South American countries in the late 1980s, when governments thought that they could inflate their problems away (sounds familiar?).

With hyperinflation, prices can double in a few days. You go to a bar and your second beer will cost more than the first. (You could order all your beers at once, to save money, but they’ll go flat. An economists’ joke is that you must find the optimum equilibrium between the beer’s foam decreasing rate relative to the inflation rate).

The implication for the housing bubble is that nominal house prices will not drop as much as we anticipated back in 2005 because of high inflation in 2008-2012. This won’t matter for real (inflation-adjusted) prices: they’ll drop the same as they would have without a high inflation scenario.

After all, what matters is the purchasing value of the dollar we use to buy a house: as the dollar’s value falls (due to the current inflationary Fed policies), we need more dollars to pay for the same value as before.

[Diego Mamani]

Stockstradr (the OP): How do you define hyperinflation? I’m convinced that inflation will shoot up in the near/medium term, but I’m also absolutely convinced that we won’t have hyperinflation in the USA.

Hyperinflation is not just “high inflation” (of say, in the 8%-15% range). Hyperinflation is what happened in Germany in the inter-war period, when prices went up within the same day! It happened again in some South American countries in the late 1980s, when governments thought that they could inflate their problems away (sounds familiar?).

With hyperinflation, prices can double in a few days. You go to a bar and your second beer will cost more than the first. (You could order all your beers at once, to save money, but they’ll go flat. An economists’ joke is that you must find the optimum equilibrium between the beer’s foam decreasing rate relative to the inflation rate).

The implication for the housing bubble is that nominal house prices will not drop as much as we anticipated back in 2005 because of high inflation in 2008-2012. This won’t matter for real (inflation-adjusted) prices: they’ll drop the same as they would have without a high inflation scenario.

After all, what matters is the purchasing value of the dollar we use to buy a house: as the dollar’s value falls (due to the current inflationary Fed policies), we need more dollars to pay for the same value as before.

[Diego Mamani]

Stockstradr (the OP): How do you define hyperinflation? I’m convinced that inflation will shoot up in the near/medium term, but I’m also absolutely convinced that we won’t have hyperinflation in the USA.

Hyperinflation is not just “high inflation” (of say, in the 8%-15% range). Hyperinflation is what happened in Germany in the inter-war period, when prices went up within the same day! It happened again in some South American countries in the late 1980s, when governments thought that they could inflate their problems away (sounds familiar?).

With hyperinflation, prices can double in a few days. You go to a bar and your second beer will cost more than the first. (You could order all your beers at once, to save money, but they’ll go flat. An economists’ joke is that you must find the optimum equilibrium between the beer’s foam decreasing rate relative to the inflation rate).

The implication for the housing bubble is that nominal house prices will not drop as much as we anticipated back in 2005 because of high inflation in 2008-2012. This won’t matter for real (inflation-adjusted) prices: they’ll drop the same as they would have without a high inflation scenario.

After all, what matters is the purchasing value of the dollar we use to buy a house: as the dollar’s value falls (due to the current inflationary Fed policies), we need more dollars to pay for the same value as before.

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