BiggerPockets

http://www.msnbc.msn.com/id/38277180/ns/business-consumer_news/

A couple days ago I posted the same topic. The above article is an article that discusses possible deflation and recession for the U.S. There are a lot of items that are happening at the same time as pointed out. Worth reading and seeing the conditions that are affecting us, imo. Rich

It will take the voters to CHANGE the personnel out in 2012. Even then, we need new thinking rather than continuing the good old boy system in place in our government.

The last time this happened the only thing we had to fear was fear itself. This time around we have to fear fear and a gluttonous spending monster in Washington that is bound and determined to run the car off the road permanently. Spending simply cannot maintain the current clip and needs to be scaled back considerably when new entitlements kick in and consume 2/3s of our "revenue."

None of this takes into account what will happen if the sovereign debt markets get spooked and the cost to roll over the debt we have with an average of 4-year maturity doubles or triples....bye bye military spending. Bye bye all services other than MANDATES that are uncontrollable. People don't realize how precarious and scary this situation actually is. This is putting the self-defense of our country at risk!

I am reading a book on hyperinflation and depression right now to get a sense for how people can plan for the worst. I think it is unlikely that this will happen, but if there are simple things one can do to protect their life savings from a reckless spending machine called Congress then it makes sense to spend a bit of time planning for it.

We have a 5-month-old daughter and my fear is that she will grow up in a country that is unable to function properly because of the reckless behavior of her predecessor's generations.

The bond market will eventually MAKE us return to fiscal responsibility. The world won't float our debt monster indefinitely. The day of reckoning will come eventually and we will be FORCED to adjust our spending policies.

I simply don't see how we will avoid monetizing the debt and inflating the currency long term. Holding debt in a real estate portfolio seems to be a pretty good hedge as long as people still have jobs to pay the mortgage when this happens. I used to think this was a given (my age shows here), but 22% U6 unemployment for an extended period of time has caused me to change this tune. Hopefully this won't persist and we can get back on track soon.

I'm reading Crisis Economics. More bad news. Rich

Originally posted by Bryan Hancock

Yeap...I bought it the first day it was available. I am about halfway through it and it has some great information. I haven't seen any predictions about what will happen yet though.

Bryan, I think you'd be hard pressed to find a book that gave predictions in this type of market. We are in uncharted territory. There is no way of predicting what will happy with the dramatic increase in money supply, a controlled real estate market and a very high unemployment rate. These are just a few of the major issues that need to be dealt with before this is all over.

I've been talking to a number of different investors lately that have become extremely pessimistic over the last few months. Most indications prove to me that we are creating yet another bubble. Housing prices in some areas of southern California are actually selling higher than 2005 and 2006 prices. This could be related to the FED buying mortgage back securities until early this year to push rates down and the banks controlling the inventory in the RE markets.

It's actually quite pathetic what this government is doing to us. But as someone mentioned above it's a good old boys club and I don't think there will be any changing that until we actually have civil unrest. At the end of the day I am hoping for the best, but preparing for the worst. I'm hoping the next few years will give us a better understanding of the future because right now it's very uncertain. I can only pray that somehow we can get ourselves out of this mess, but I truly thinks it's a long shot.

I am betting a terrorist attack will soon derail the economy completely.

Yeah...The book takes more of a "planning" approach, which is obviously the right thing to do given that there are so many variables to account for. Rich's strategy to hedge with the "mirrored strategies" is one of the best that I have seen as long as you have the capacity to execute it and you do so with the proper type of financing.

I actually had a multiple reply thread with another BP member over this and we never saw eye-to-eye on the thing. I don't want to pull the scab off of festering wounds so I won't go there anymore.

I don't see how one can execute on a strategy like Rich's without a significant amount of assets already built up. Perhaps one can have some property as lowly leveraged as possible without being free and clear.

If you haven't read it before in any of my other post, I have been just sitting and watching and not active in RE. Now I am jumping back in with all 4 feet.
When I go out to eat, the resturants are full. I am never the only one filling my car up at the service station. I took my wife and some friends out on my boat for a little dinner cruise a couple of days ago (on a Monday evening). The lake and resturant was full of people. Unemployment is running about 2% lower than the national average here in Little Rock. These observations have sold me that it is time to do something. Right or Wrong.
But, most of all, I am tired of "Doom and Gloom". Will it get worse? I think so if we sit on our haunches. Depends on me!
Don