[ltokuda]

Some friends of mine started flipping houses in Riverside recently. The houses that they are buying are damaged and usually need about $20k of rehab work. If they buy a house for, say, $100k, they rehab them and sell them for about $160k. This type of house would rent for about $1350/mo right now. In order to find these deals, my friends might bid on 30 properties and only get 1 hit. The point is that on the low end side, there are deals to be had if you look really hard for them and are able to do the rehab.

The prices in Riverside are still coming down, though. That’s why my friends are flipping the properties. They don’t want to get stuck with an asset that is depreciating in value. We believe that by late next year, the low end will be very close to its bottom. At that point, I’ll start looking a properties to buy and hold as long term investments. There are some good deals to be had right now. But there will be even better deals in Riverside in the future.

[ltokuda]

Some friends of mine started flipping houses in Riverside recently. The houses that they are buying are damaged and usually need about $20k of rehab work. If they buy a house for, say, $100k, they rehab them and sell them for about $160k. This type of house would rent for about $1350/mo right now. In order to find these deals, my friends might bid on 30 properties and only get 1 hit. The point is that on the low end side, there are deals to be had if you look really hard for them and are able to do the rehab.

The prices in Riverside are still coming down, though. That’s why my friends are flipping the properties. They don’t want to get stuck with an asset that is depreciating in value. We believe that by late next year, the low end will be very close to its bottom. At that point, I’ll start looking a properties to buy and hold as long term investments. There are some good deals to be had right now. But there will be even better deals in Riverside in the future.

[ltokuda]

bzribee, I wouldn’t get too startled by sdrealtor’s prediction. During previous housing downturns, almost every year saw a spring bounce in prices. After each bounce, prices dipped even lower than they were a year prior. That’s why its important to look at year-over-year prices. If you ask sdrealtor for his fall of ’09 prediction, I’m sure he’ll tell you that prices will probably be lower than they are now.

[ltokuda]

bzribee, I wouldn’t get too startled by sdrealtor’s prediction. During previous housing downturns, almost every year saw a spring bounce in prices. After each bounce, prices dipped even lower than they were a year prior. That’s why its important to look at year-over-year prices. If you ask sdrealtor for his fall of ’09 prediction, I’m sure he’ll tell you that prices will probably be lower than they are now.

[ltokuda]

bzribee, I wouldn’t get too startled by sdrealtor’s prediction. During previous housing downturns, almost every year saw a spring bounce in prices. After each bounce, prices dipped even lower than they were a year prior. That’s why its important to look at year-over-year prices. If you ask sdrealtor for his fall of ’09 prediction, I’m sure he’ll tell you that prices will probably be lower than they are now.

[ltokuda]

bzribee, I wouldn’t get too startled by sdrealtor’s prediction. During previous housing downturns, almost every year saw a spring bounce in prices. After each bounce, prices dipped even lower than they were a year prior. That’s why its important to look at year-over-year prices. If you ask sdrealtor for his fall of ’09 prediction, I’m sure he’ll tell you that prices will probably be lower than they are now.

[ltokuda]

bzribee, I wouldn’t get too startled by sdrealtor’s prediction. During previous housing downturns, almost every year saw a spring bounce in prices. After each bounce, prices dipped even lower than they were a year prior. That’s why its important to look at year-over-year prices. If you ask sdrealtor for his fall of ’09 prediction, I’m sure he’ll tell you that prices will probably be lower than they are now.

[ltokuda]

I respect Schiff’s views a lot. But I do wonder what his definitions of “inflation” and “money supply” are. If his definition of “money supply” is: cash. Then I think everyone will agree with him. The Fed is eventually going to have to start printing a lot more money to pay for all the expenses.

Whatever definition of “money supply” Schiff uses, do you have any insight on what he thinks the effects will be? I still see the price of houses going down in the near/medium term. But does he see the price of food shooting up? Gold? Oil? Is that what he means by hyperinflation?

[ltokuda]

I respect Schiff’s views a lot. But I do wonder what his definitions of “inflation” and “money supply” are. If his definition of “money supply” is: cash. Then I think everyone will agree with him. The Fed is eventually going to have to start printing a lot more money to pay for all the expenses.

Whatever definition of “money supply” Schiff uses, do you have any insight on what he thinks the effects will be? I still see the price of houses going down in the near/medium term. But does he see the price of food shooting up? Gold? Oil? Is that what he means by hyperinflation?

[ltokuda]

I respect Schiff’s views a lot. But I do wonder what his definitions of “inflation” and “money supply” are. If his definition of “money supply” is: cash. Then I think everyone will agree with him. The Fed is eventually going to have to start printing a lot more money to pay for all the expenses.

Whatever definition of “money supply” Schiff uses, do you have any insight on what he thinks the effects will be? I still see the price of houses going down in the near/medium term. But does he see the price of food shooting up? Gold? Oil? Is that what he means by hyperinflation?

[ltokuda]

I respect Schiff’s views a lot. But I do wonder what his definitions of “inflation” and “money supply” are. If his definition of “money supply” is: cash. Then I think everyone will agree with him. The Fed is eventually going to have to start printing a lot more money to pay for all the expenses.

Whatever definition of “money supply” Schiff uses, do you have any insight on what he thinks the effects will be? I still see the price of houses going down in the near/medium term. But does he see the price of food shooting up? Gold? Oil? Is that what he means by hyperinflation?

[ltokuda]

I respect Schiff’s views a lot. But I do wonder what his definitions of “inflation” and “money supply” are. If his definition of “money supply” is: cash. Then I think everyone will agree with him. The Fed is eventually going to have to start printing a lot more money to pay for all the expenses.

Whatever definition of “money supply” Schiff uses, do you have any insight on what he thinks the effects will be? I still see the price of houses going down in the near/medium term. But does he see the price of food shooting up? Gold? Oil? Is that what he means by hyperinflation?

[ltokuda]

Just to clarify, Mish argues that “money supply” is basically defined as: cash + credit. Inflation is the increase of money supply.

One possible effect of inflation is “price inflation”. But the price of any particular item is affected by many factors. Due to globalization, the price of many products have been kept down. So even though we’ve experienced a lot of inflation over the last decade, we haven’t seen much of its effects in the CPI.

On the other hand, we have seen serious price inflation in other areas. Housing, education, and health care costs are some examples of that. Until recently, it seemed like stock prices were also experiencing price inflation. The DJIA and S&P had sustained P/E ratios that were significantly higher than their historical averages.

Inflation helped to fuel the housing bubble and the housing bubble helped to fuel inflation (via loose lending standards). As housing prices decrease and lending standards tighten, we’re seeing a contraction of credit as well. That results in deflation.

[ltokuda]

Just to clarify, Mish argues that “money supply” is basically defined as: cash + credit. Inflation is the increase of money supply.

One possible effect of inflation is “price inflation”. But the price of any particular item is affected by many factors. Due to globalization, the price of many products have been kept down. So even though we’ve experienced a lot of inflation over the last decade, we haven’t seen much of its effects in the CPI.

On the other hand, we have seen serious price inflation in other areas. Housing, education, and health care costs are some examples of that. Until recently, it seemed like stock prices were also experiencing price inflation. The DJIA and S&P had sustained P/E ratios that were significantly higher than their historical averages.

Inflation helped to fuel the housing bubble and the housing bubble helped to fuel inflation (via loose lending standards). As housing prices decrease and lending standards tighten, we’re seeing a contraction of credit as well. That results in deflation.

[ltokuda]

Just to clarify, Mish argues that “money supply” is basically defined as: cash + credit. Inflation is the increase of money supply.

One possible effect of inflation is “price inflation”. But the price of any particular item is affected by many factors. Due to globalization, the price of many products have been kept down. So even though we’ve experienced a lot of inflation over the last decade, we haven’t seen much of its effects in the CPI.

On the other hand, we have seen serious price inflation in other areas. Housing, education, and health care costs are some examples of that. Until recently, it seemed like stock prices were also experiencing price inflation. The DJIA and S&P had sustained P/E ratios that were significantly higher than their historical averages.

Inflation helped to fuel the housing bubble and the housing bubble helped to fuel inflation (via loose lending standards). As housing prices decrease and lending standards tighten, we’re seeing a contraction of credit as well. That results in deflation.

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