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20 somethings have FAR, FAR more debt than they ever had before, this is a readily available fact.

Average college grads come out with over 20K in debt. Tack onto this the high cost of living, especially in San Diego and I would say that this crop of young men and women have it much tougher than the ones that came before them.

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Maybe…maybe not. We could have another round of massive Asian interference, or shall we say, buying of our treasuries which would once again validate the new so called Bretton Woods II agreement.

I am hoping you guys are right. That a dollar that is becoming uncoupled from the monetary world will force the Asian tigers to divest themselves of our treasuries thus forcing up rates.

Basically I would hate to see another round of fiscal insanity like we just witnessed in the past few years.

[dukes]

Maybe…maybe not. We could have another round of massive Asian interference, or shall we say, buying of our treasuries which would once again validate the new so called Bretton Woods II agreement.

I am hoping you guys are right. That a dollar that is becoming uncoupled from the monetary world will force the Asian tigers to divest themselves of our treasuries thus forcing up rates.

Basically I would hate to see another round of fiscal insanity like we just witnessed in the past few years.

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I don’t think this Fed is going to be “tough”. I think they will let the dollar tank and reliquify the system.

Essentially, I am saying they are cowards and will follow the path blazed for them by Greenspan, there is no one of Volcker’s fortitude in the bunch.

This could mean lower rates and a reliquified housing market.

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powayseller:

Love your insightful posts and agree with them all. My fear in all of this is that as the economy weakens, which I think it is well on its way to doing short term interest rates will be lowered by a panicking Fed, and the longer term rates will be lowered by bond market players.

I believe that the Fed can keep the inflation genie in the bottle, although it has crept out in the past couple of weeks. So, to reiterate, my fear is a Fed that bails out next years resetting ARM’s with lower rates and reliquifies the Housing ATM…thoughts…

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powayseller: Thanks for taking the time to respond to Steve. I must admit that I agree with every single point that you made.

Trends end, manias end, real estate prices have been rising for so long it has become a true crutch for the American public to think that it can never go down. That real estate is a no brainer investment. These are the times to avoid ANY asset class that garners that type of reputation.

P.S. You might want to subscribe to Bill Fleckenstein: http://www.fleckensteincapital.com/index.aspx it is the best $100 a year someone can spend to learn from a guy who has been around the investment block many times. He is rational, smart and honest. I have been reading him for years, have profited greatly and would recommend him to anyone.

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I am sorry to say this, but I think RightSide is being a little foolish. So what if you have the money to pay for it. Buying now makes no sense.

There are some very wealthy men out there John Mauldin for one, Paul McCulley of Pimco for another who are both renters right now.

Why? Because they are smart investors. It is just FOOLISH to overspend for anything, be it a loaf of bread of a box to live in.

Come to your senses, if money is no object, rent a gorgeous place but don’t lose hundreds of thousands of dollars in value just because you are impatient. Come on, think a little before you act.

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