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Old 06-23-2011, 09:30 PM
 
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Is it going to creep up slowly as it has been so far for a few more years before really exploding, or is it going to shoot up in the near future?

I don't want to jump into real estate just yet, and I am willing to lose some more value on my savings on the chance I can afford my near term real estate goals. I still think housing could go down too. On the other hand I don't want to lose everything by holding out too long.
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Old 06-23-2011, 11:46 PM
 
Location: Conejo Valley, CA
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Its going to remain weak for many years.
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Old 06-24-2011, 09:43 AM
 
Location: Ohio
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Quote:
Originally Posted by AuburnAL View Post
Is it going to creep up slowly as it has been so far for a few more years before really exploding, or is it going to shoot up in the near future?
There is no USD inflation. What you have is prices on certain commodities inflated due to crop shortages, crop destruction, under production or other problems coupled with high demand.

If there was Real Inflation, then housing prices would be going up. Now.

You will know when there is Real Inflation of the USD, because the price of everything, as in every thing, will start rising. That means wages, salaries, rent, housing prices, utility prices, the cost of cable/satellite service, the cost of internet service, the cost of cell-phone service, your "health insurance," your home-owner's insurance, your car insurance, your life insurance, beer, wine, liquor, all meats, poultry and fish, all vegetables (not just a select few like corn and rice), all food-stuffs, cosmetics, prescription drugs, non-prescription drugs, cars, bicycles, tricycles, unicycles, the price of tickets for movies, concerts and sporting events, everything -- as in every thing.

It'll be at least 8 years before you start to see any sign of that, and it'll be a few years later before it explodes.

And if you buy a home, make sure you put 35% to 50% down. Otherwise, what will happen is 8-10 years from now when prices start jumping 5% to 10% every other week, you'll default on your mortgage and be in foreclosure, because wages/salaries will rise, but there's always a lag time of about 4-6 months. So what will happen is you'll find yourself in a position where you can pay your mortgage and buy a case of Ramen noodles to eat for the month, but won't be able to afford anything else until your wages increase.
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Old 06-24-2011, 09:55 AM
 
22,769 posts, read 27,845,610 times
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Quote:
Originally Posted by Mircea View Post
There is no USD inflation. What you have is prices on certain commodities inflated due to crop shortages, crop destruction, under production or other problems coupled with high demand.

If there was Real Inflation, then housing prices would be going up. Now.
i don't know if i agree with that definition of inflation. it seems rather narrow.
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Old 06-25-2011, 10:39 AM
 
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It was an example and a valid one. Do you see the prices of anything dropping? If so real inflation isn't occurring yet.
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Old 06-25-2011, 10:52 AM
 
3,327 posts, read 3,810,846 times
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Quote:
Originally Posted by Mircea View Post
There is no USD inflation. What you have is prices on certain commodities inflated due to crop shortages, crop destruction, under production or other problems coupled with high demand.

If there was Real Inflation, then housing prices would be going up. Now.

You will know when there is Real Inflation of the USD, because the price of everything, as in every thing, will start rising. That means wages, salaries, rent, housing prices, utility prices, the cost of cable/satellite service, the cost of internet service, the cost of cell-phone service, your "health insurance," your home-owner's insurance, your car insurance, your life insurance, beer, wine, liquor, all meats, poultry and fish, all vegetables (not just a select few like corn and rice), all food-stuffs, cosmetics, prescription drugs, non-prescription drugs, cars, bicycles, tricycles, unicycles, the price of tickets for movies, concerts and sporting events, everything -- as in every thing.

It'll be at least 8 years before you start to see any sign of that, and it'll be a few years later before it explodes.

And if you buy a home, make sure you put 35% to 50% down. Otherwise, what will happen is 8-10 years from now when prices start jumping 5% to 10% every other week, you'll default on your mortgage and be in foreclosure, because wages/salaries will rise, but there's always a lag time of about 4-6 months. So what will happen is you'll find yourself in a position where you can pay your mortgage and buy a case of Ramen noodles to eat for the month, but won't be able to afford anything else until your wages increase.

I tend to agree although there are a few caveats.

Certain commodities are seeing price spikes as a result of supply disruptions while others are seeing it as a result of ZIRP.

Defaltion is still the name of the game.

What's interesting now is that if the economy starts to grow at a relatively high rate 4%+ then the chance of high inflation becomes real.
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Old 06-25-2011, 11:04 AM
 
27,999 posts, read 36,132,382 times
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And no president in their right mind would jack up interest rates to suck that extra money supply back up and even if they would Americans would never willingly vote for that, they're too spoiled rotten to give up something until it's literally ripped from their hands.

And that's just the PlayStation controller and the person ripping it from their hands is their mother trying to get them to eat after not having done so for 3 days.
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Old 06-25-2011, 11:23 AM
 
Location: San Diego California
6,797 posts, read 6,648,323 times
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Quote:
Originally Posted by BigJon3475 View Post
It was an example and a valid one. Do you see the prices of anything dropping? If so real inflation isn't occurring yet.
The real problem with analyzing what is going on, is that there is not one set direction in any part of the economy. We actually have inflation and deflation happening at the same time depending on what asset class you are talking about.
Real Estate values and direction vary wildly depending on location.
Geo-political situations are influencing markets.
The dollar is currently benefiting from the problems in Europe and in Japan. That is keeping interest rates lower than what they otherwise would be. On the other hand, problems with raising the debt limit and the FED's ending of QE2 without any indication of new easing measures will put upwards pressure on interest rates.
My best guess is that we will be entering the second phase of recession later this year or possibly next year. The short term fixes attempted by the FED and the Government were implemented without long term success, and neither are really in any position now to keep doing what they have been.
Unemployment is not improving, and will continue to put downward pressure on wages. China's economy, which at least domestically, is being supported by a real estate bubble, is not sustainable.
Australia’s real estate market is deteriorating and Canada is not far behind. Europe is implementing continuing austerity, which will lower overall trade. Worldwide you have tensions between countries, China, the PI, Vietnam, US, Korea, and Japan that will translate into lower trade.
This whole thing is like a slow motion train wreck. When you look at the question of when to re-invest, the answer is always at the bottom. but where the bottom is, is the million-dollar question. From all the data I am looking at though, I do not think this is it.
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