Posted on 06/05/2010 2:31:38 AM PDT by combat_boots
"Sub-prime mortgages are just the start the worst still to come"
60 Minutes special. Get out of Dollars and the US Stock Market. There is going to be a run on the dollar soon as China becomes a net seller of treasuries instead of a net buyer like they are currently. They just announced a 600b bailout of their own, how do you think they will pay for it? Dump their 1Trillion plus in US treasuries. The game is up. In 2010 a hundred US dollars wont even buy you a case of beer.
(Excerpt) Read more at geraldcelentechannel.blogspot.com ...
Many don’t realize how serious the housing market can affect them -— until they try to sell.
They’re up against deflated homes, repossessed, liquidated or price-slashed in most markets.
A country's core manufacturing and industrial base to develop goods from its own resources to be consumed domestically is what actually provides the vehicle of true growth in wealth.
With all of the US's manufacturing jobs having blee off to overseas, it was just a matter of time before what we have seen and the worst that is coming.
By mid 2007 I knew it was time to readjust retirement strategies.
Most Americans are totally oblivious to the fast approaching fiscal collapse of the US & the World.
Sad part is that most new and high tech manufacturing machinery for electronics, etc now sits in China.
War is coming and The Boomers, Gen X, Gen Y, Ben Z & Gen Z' will soon know what make do and do w/o is all about. with few having never learned to save.
OMG! Watching that 60 Minute special makes me want to hide under a rock.
have found this website to be a very useful source of information on the economy, gold, and silver.
http://goldismoney.info/forums/
How did you change your retirement strategy?
Got out of international stock mutual fund (90% European) and moved it to a corporate bond fund. (26% of my 401K). Money Market would preserve capital, but, no growth virtually. I made over 44% 7 yr average in the int’l fund. We have little to choose from at work. Also, other than the mortgage, no debt.
Invest in precious metals, you know gold, silver, brass and lead (ammo), steel (guns), tin (cans full of food), aluminum (beverages and foil).
I’m sitting on some of the first 5 already. Doing a remodel project to increase my ability to store the last 2. This includes reclaiming some garage space and converting an old water heater closet to a hardened (steel lined) storage locker for the first 5 items.
We might as well load up on non-secured debt to do so, too. Think a bankruptcy for defaulting on credit cards will matter when this is over, plus gold and silver will be worth 5 or 10 times what they are now, so paying off debt will be just a matter of selling 20% to 40% of your holdings. I don’t see a moral dilemma here, since it’s the banks and Wall Street that caused the problem. Just giving them back some of the pain they created.
The bottom will be lower. but the decline won’t be nearly as large. prices were hyper-inflated. they are not, now. An “anti-bubble” can’t persist: Someone who recognizes that a price is way too high can do little more than simply not buy, and thus has no effect on others’ behavior. (Even short-selling only effects one other market agent.) A person who recognizes that a price is too low removes the house from the market for everyone.
Bookmark
Careful with that investment advice. Aluminum may just be a good investment, but non-precious metals (lead, steel, tin, aluminum) are cyclicals. When consumption is down, re-use even rises, giving a body blow to demand. I believe that emerging economies might just prevent a demand collapse, but they’re hardly “safe” investments.
If the cost of constructing a house is $250,000, and the house sells for $230,000, then the price of the land is minus $20,000... or the house is UNDERvalued.
Now, it may be that certain niches are over-constructed. Maybe there’s something to be said against the notion that it’s crazy to spend $250,000 on constructing, but is Prince William County going to allow neighborhoods with 70% vacancies just sit as ghost-towns, or is it going to allow people to have housemates?
I understand Celente’s rationale for the collapse, but I think the Chicoms see no value in destroying the largest market for Chinese goods. The Chinese need 25 million new jobs every year just to stay even, If we go down, the Chinese economy could crap out, and domestic unrest could unravel the workers paradise.......but would the pundits give Bush the credit?
As with all bubbles, there is an overreach to the downside as well, so in that respect you are right. However, the compounding problem here is demographics. The Baby Boomers are leaving the Consumption Party and are not being replaced with sustainable numbers, so IMO, there will be downward pressure for years.
You are right that Celente’s theory of doom rests upon the Chi-coms crashing our economy. However, with the need to finance such a massive debt and China’s own economic problems - tied to our economic problems, they may not be able to continue bailing us out to avoid the crash Celente expects.
This globalism has tied all the countries of the world to the same bankster and global economic planning caboose. They have derailed and I would be surprised to see any nation escape the consequences. The solution will be “MORE GLOBALISM” but that is the last thing we should do. We need more Nationalism - Nations tending to the job of taking care of their own back yard and gaining control over their own way of life.
Houses are worth whatever people are willing to pay for them. If people are only willing to pay 230k for a 250k house plus a 20k lot, then that means that construction costs have to come down by about 20 percent.
The market is really good at sending signals to construction firms that they need to cut costs if they want to survive.
I’ve been betting that housing will drop another 50 percent before it will have hit the true bottom of the market. Only then will the underlying housing appreciation match historical rates. This also takes into case the overcorrection, where the housing market falls further then it should.
“The Baby Boomers are leaving the Consumption Party and are not being replaced with sustainable numbers, so IMO, there will be downward pressure for years.”
Well I’m assuming a 3 percent increase. You are right that there will be an intrinsic decline in demand not even accounted for. So perhaps my prediction is optimistic.
Me too... Another that sets me off is the Reverse Mortgage.
Would it have hurt you to tell us that this was a video?
Apologies. I forget sometimes.
However, I did assume that when the post itself said “60 minutes special,” people would realize it was a video.
I agree with all you’ve said, I liken what is happening to the collapsing world trade center, only in slo-mo.We are on a floor still intact,and we get the vibration and the smoke and the noise,but the carnage i coming. Kinda like a train wreck.
People build products or offer services that can only be sold at a loss all the time—that’s how companies go out of business.
If it drops another 50%, the price of housing will be less — in inflation-UNadjusted dollars — then it was when the Case-Shiller reports were first created in the late 1980s. Right now, the Case-Shiller index is at about 150 (between the 10-city-composite and the 10-city-composite, and the seasonally-adjusted-index and the non-seasonally-adjusted-index, I forget exactly which is reading what, but it’s all abot 150.)
A drop to 130 would mean homes are selling for about what they were in the late 1980s in constant dollars. (The index was in the high 60s then, but the index is not in constant dollars.) However, homes were smaller then, so you could argue that the Case-Shiller index is already back to its historical norms.
However, given the recent housing data, I would guess that housing prices are still dropping.
>>The market is really good at sending signals to construction firms that they need to cut costs if they want to survive. <<
EXACTLY. That’s why a negative bubble can’t persist. If there’s a negative bubble, then construction will decrease. Population growth will increase faster than supply, and next thing you know, prices go back up.
The feds are already in the process of relocating inner city hoodlums into nice houses in the burbs that have been forclosed on.
Which is how the system is supposed to work. It makes for a painful readjustment, but once the readjustment is over, then everything is on a firm footing.
The reason I picked 50 percent again, is to look at the cost of housing in the 50s, as compared to now, given a year over year appreciation of 5 percent. It works out to be about half the price that houses are now.
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