Are Property values appreciating or is USD buying power decreasing?

[AJ Wong]

Recently I've continued to get positive feedback on my posts so I'll keep it up until the comments turn negative..

For those that follow me, they will sense my bullish tendency towards real assets. For the record during the past twelve months I've been aggressively acquiring gold, silver, rare colored diamonds and working on a redevelopment rental in Mexico as I felt the dollar had peaked. I also have extensive individual experience with these commodities and realize I take more 'risk' than most..or do I? 

Additionally my work with investors in Oregon and California has quadrupled and most of my recent clients have in retrospect secured very favorable terms on both the purchase and sale side. 

This is not a pat on the back, but just to provide some context for why I think inflation is here to stay and that there is the potential that despite the challenges in the housing market, there could be more incentives to invest capital and reserves than disincentives. 

Most obviously banks are failing. I saw a graphic that said the total failures are GREATER than 2008. If not for government backstops depositors could lose their entire savings above $250k! We are in a banking crisis, that is a financial crisis by another name. 

The only solution is for the government to print more money. That's what they doing. This will continue to devalue to purchasing power of dollars. To reiterate I'm not an alarmist, but the threat of hyper inflation is growing and it is a known fact that if we used the same CPI from the 1980's and 1970's we currently have double digit inflation. 

Inaction is not a solution, it is a risk. The risk of already invested time losing value and risking your future. 

I am not advocating to act recklessly, in fact quite the opposite. I'm advocating putting your 'money' to work and in more challenging times that is going to require working for your money. 

For the first time this generation, passive investing could be disastrous. When deposits at the bank aren't safe, what is? 

You as your own bank. A portfolio of hard, tangible, real assets and real estate. 

Currencies have come and gone but empires have been transferred and sustained on land and real estate. 

It is the first and most essential asset. In my humble opinion, the more quality property you control, the more safe, secure and dependable your investment portfolio. 

Sure rates are higher and valuations are up, but what if property valuations (and everything else) for that matter are rising because the value of the dollar is falling? 

$20 sure doesn't go as far as it used to, does $50k even buy a new car nowadays? In comparison a recent client secured a Triplex for $50k out of pocket on a cash flow positive property. That was six months ago..that same $50k couldn't even purchase the same things today. 

There are new investment intangibles to be considered when evaluating the investment potential of a property, including the declining value of the proposed capital by not being utilized. 

Silver was $17-18 not so long ago. Today it's $26 but in my opinion still considerably undervalued. The same argument could be made for real estate, but either way I think dollars will continue to purchase fewer commodities. 

Is real estate a commodity? 

What are your thoughts, are values too high or do dollars not go as far as they should?