Coming Great Depression?

Lewisville, TX · Member since 2015 · 341 posts · 264 votes

Does anyone else believe in Austrian Economics & follow Peter Schiff & Lew Rockwell & think that when the everything bubble pops in next couple years (we are already in 2nd longest expansion ever) that we will have an event at least as bad as a Great Depression & a full blown dollar crisis with cryptos & hard assets coming to replace it?

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
Originally posted by @Matt Millard:
To be honest to an Austrian the one thing people want is timing & while it can be relatively predicted it’s never exact & can more easily be seen in retrospect. As Peter Schiff says I would rather be wrong, wrong, wrong continually & eventually proven right than be right all along & eventually in the end proven dead wrong.
How can we be continuously wrong, sit on the sidelines, and win? I'm not making a point...I don't have the answers and am asking a practical question. I don't have energy around theoretical debates...I have a family to support and capital to allocate.
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Account Closed
Rental Property Investor · Torrance, CA · Member since 2016 · 724 posts · 1k+ votes
8y
I’ve read quite a few of Peter Schiff’s books. He doesn’t think we’re headed for another Great Depression. He thinks we’re headed for a Hyper Inflation like Germany had post World War One. On the other end of the spectrum you have Harry Dent. His theory points to a deflationary collapse like we had in 29. I have Dent’s book The Demographic Cliff. I recommend any REI to read because it’s about how the aging of the Baby Boomers is going to shape the US economy for the next 20 years. Look up Harry Dent Peter Schiff debate on YouTube if you need some entertainment. These guys get pretty heated at each other. Either way I think REI is a safe bet. If Schiff is right rents and values will skyrocket, and wipe out the debt on our fixed rate loans. Sure gas is $100 a gallon but our rents will rise with it. If Dent is right and we have a true depression, values AND rents drop significantly. In 08 we didn’t have a real depression, the fed stepped in with bailout money keeping rents up. Everyone that is over leveraged goes underwater and those of us that were responsible go on a feeding frenzy with the foreclosures. Either way I believe REI is the best place to be as long as you have significant cashflow and equity.
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Account Closed
Rental Property Investor · Torrance, CA · Member since 2016 · 724 posts · 1k+ votes
8y
To give Schiff some credit he did predict the 08. His prediction was remarkably accurate. Here is the video of a speech he gave to a group of mortgage brokers in 06. He warns them of an upcoming real estate crash caused by sub prime lending.... https://youtu.be/jj8rMwdQf6k
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Will F.
Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes
8y
Let me check my crystal ball real quick...
Nope.
I do believe in Cryptocurrencies and the blockchain decentralized technology having a boom in the next few years though.... but that's another debate :)
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Rachel H.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
8y
@Matt Millard I think it's more of a question of "when" than "if." Something's going to happen that will disrupt the economy. Unfortunately, a lot of it happens due to human nature which tends to mess things up for everyone else in the world. This is why it's really hard to progress as human beings. Whatever happens, the things people will always need despite the economy are: housing (yay real estate!), food and clothing. Entertainment is a plus too especially in dark times.
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Anthony Johnson
Real Estate Broker · Dunedin, FL · Member since 2015 · 74 posts · 43 votes
8y
21 Trillion in debt is bad? Picture this, household income avg family say $ 120,000, that florida family has a 350k mortgage, 50k in student loans, they are mid 30's, car debt 25k on the mini van, another 5k on Visas, so lets say around 450k in debt. So debt is 300% of gross earnings and they are doing fine. USA is a 6-7 Trillion+ dollar economy. So the Debt load is 3-3.5 times gross earnings, so normal for any business. i personally have 7 digit debt on 36k income, and I am doing better than all of my friends, some HOLD peeps will understand. ***I would prefer our gov to be debt free but hey, we are getting boatloads of sh*t from China and we give them worthless paper that adds to the debt,then we get boatloads of oil from middle east and we give them paper ...so we get all the worlds resources and we are only at 3x earnings on debt, it is an amazing system we would all do it if we could buy houses this way. USA#1!!!
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Chinmay J.
Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
8y
Originally posted by @Matt Millard:
Does anyone else believe in Austrian Economics & follow Peter Schiff & Lew Rockwell & think that when the everything bubble pops in next couple years (we are already in 2nd longest expansion ever) that we will have an event at least as bad as a Great Depression & a full blown dollar crisis with cryptos & hard assets coming to replace it?
Would you let us know when you get invited to be the guest on Info Wars? Sure one of these days there will be a recession... They have been calling this since 2012, and whoever calls it will look like a genius. Lets not forget that even a broken clock is right twice a day.
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
8y
Reminds me of a local weather station. Every year they predict several major storms, foot of snow and blizzard conditions. They are almost always wrong then one year, they nailed it. They were the only station to predict a major winter storm. Then for the next few years, their news commercials touted, "we were the only station to predict the storm of 2005". They milked it for years. Yet to this day, they keep predicting and missing another big one.
There are people that believe our currency will collapse and I have even heard some say "food and bullets will be the new currency."
Maybe you are right and maybe they are right. Maybe you are both wrong (that is my opinion). Honestly I would rather take perspective from someone like @Jay Hinrichs who has lived through enough cycles to understand how it works.
Simply put, I think you are flat out wrong about a coming depression. But go ahead and put some tin foil on your head, it can't hurt.
3 Reply
Sam Josh
Sunnyvale , CA · Member since 2017 · 373 posts · 362 votes
8y
Ask Schiff to come clean with all his short positions, I bet he has none of significance because if had put his money where his big mouth is, he would be bankrupt and broke by now.
3 Reply
Edward B.
Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
8y
Originally posted by @Chinmay J.:

Originally posted by @Matt Millard:
Does anyone else believe in Austrian Economics & follow Peter Schiff & Lew Rockwell & think that when the everything bubble pops in next couple years (we are already in 2nd longest expansion ever) that we will have an event at least as bad as a Great Depression & a full blown dollar crisis with cryptos & hard assets coming to replace it?
Would you let us know when you get invited to be the guest on Info Wars? Sure one of these days there will be a recession... They have been calling this since 2012, and whoever calls it will look like a genius. Lets not forget that even a broken clock is right twice a day.
I read through this entire discussion waiting to use that analogy and you just beat me to it.
All of these guys that "nailed" the prediction have been "predicting" that outcome for years, if not a lifetime. Everyone knows that the market moves in cycles. It doesn't take a genius to know there will be another recession and, no, I don't think they got it right if they missed it by several years. Do you have any idea how much money is lost sitting on the sidelines waiting for the inevitable?
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Chinmay J.
Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
8y
Originally posted by @Edward B.:

Originally posted by @Chinmay J.:
Originally posted by @Matt Millard:
Does anyone else believe in Austrian Economics & follow Peter Schiff & Lew Rockwell & think that when the everything bubble pops in next couple years (we are already in 2nd longest expansion ever) that we will have an event at least as bad as a Great Depression & a full blown dollar crisis with cryptos & hard assets coming to replace it?
Would you let us know when you get invited to be the guest on Info Wars? Sure one of these days there will be a recession... They have been calling this since 2012, and whoever calls it will look like a genius. Lets not forget that even a broken clock is right twice a day.
I read through this entire discussion waiting to use that analogy and you just beat me to it.
All of these guys that "nailed" the prediction have been "predicting" that outcome for years, if not a lifetime. Everyone knows that the market moves in cycles. It doesn't take a genius to know there will be another recession and, no, I don't think they got it right if they missed it by several years. Do you have any idea how much money is lost sitting on the sidelines waiting for the inevitable?
The thing is that I use that analogy every time I open my mouth, and just like a broken clock I nail it at least twice a day..lol
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Matt Millard
OP
Lewisville, TX · Member since 2015 · 341 posts · 264 votes
8y
I think the best way to prepare besides prepping is to invest wisely use little leverage or at least use it as wisely as possible with the best managers & deals & buy metals & crypto. That’s about all one can do. I won’t bury my head in the sand & quit doing business whatsoever. If anything it should make you a better & wiser investor!
2 Reply
Edward B.
Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
8y
Originally posted by @Matt Millard:

I think the best way to prepare besides prepping is to invest wisely use little leverage or at least use it as wisely as possible with the best managers & deals & buy metals & crypto. That’s about all one can do. I won’t bury my head in the sand & quit doing business whatsoever. If anything it should make you a better & wiser investor!
So basically, aside from the metals and crypto bit, you agree with everyone else on this website. What was the point of all this again?
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Matt Millard
OP
Lewisville, TX · Member since 2015 · 341 posts · 264 votes
8y
Chinmay, I would say that sitting on the sidelines is not wise either unless you can’t find a legitimately good opportunity which for a 1st timer with no experience could be quite a challenge in this market without a mentor or being open to out of state & cash flow investing versus appreciation big city bets. I am definitely not sitting on the sidelines despite my very legitimate fear that the dollar will collapse & the FED won’t be able to bail us out again & paper over losses like we did post 2008. They have lost all credibility after 2008 & this time will be different. It’s the Keynesian experiment taken too the most dangerous depths of disaster!
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Matt Millard
OP
Lewisville, TX · Member since 2015 · 341 posts · 264 votes
8y
Edward, no one can predict the exact timing. It’s the principle & sound money that matters & no human/government intervention. That’s what the Austrian school is all about.
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Edward B.
Investor · Midlothian, VA · Member since 2015 · 980 posts · 823 votes
8y
Oh, OK, I got it.
The world is going to end in the future.
Time = TBD.
Solution = Stay the course.
I'm at the exact place I was 40 posts ago.
7 Reply
Will G.
Rental Property Investor · Maryville, TN · Member since 2009 · 529 posts · 414 votes
8y
please look up porter stansberry interview (youtube)with lacy hunt. I would put a lot more stock in his (hunt's) take than others cause he is not selling a doomsday scenario for profit. His message aint pretty but it is quite compelling.
Then please explain to me how gold works in this scenario.....you have gold,.. then crisis,..crisis ends,..time to sell gold,.. everyone else in the world is selling gold cause the crisis is over,.. price of gold drops because no one needs it anymore.
Did you win or loose in that scenario????
Mega debt will cause a credit default cycle which is deflationary(MONEY BEING REMOVED FROM THE SYSTEM)
2 Reply
Alexander Stephenson
Phoenix, AZ · Member since 2016 · 13 posts · 15 votes
8y
I studied economics, which means 0, but I think the Austrian school of thought is just a bunch of angry classicalists. I do believe a recession is coming. I wouldn’t be surprised if we had a so-called “currency bubble” due to the QE that occurred under Bernanke, but if Powell keeps increasing the prime rate he’ll be resented and probably save us from a much larger recession at the same time. It’s an interesting time that we live in with globalization, inflation that hasn’t hit yet, and America’s isolationism. We’ll all have to stay tuned.
2 Reply
Matt Millard
OP
Lewisville, TX · Member since 2015 · 341 posts · 264 votes
8y
I’m familiar with Stansberry too as well as Stockman, Harry Dent, etc. I do think we will have deflation first then later turning towards heavy inflation. I actually dislike negative outlooks without a real reason, but we have plenty of facts & reason to back up that case today. Many people won’t really consider it & call it Chicken Little because of media & past experience etc. I know Peter Schiff has a very poor track record investing but I don’t discredit his economic outlook & believe he will do well in metals & alternatives when the next recession hits. I sat at same table with David Stockman in Houston last year when his new book came out & follow all of this & cryptos & metal closely...
0 Reply
Account Closed
Rental Property Investor · Torrance, CA · Member since 2016 · 724 posts · 1k+ votes
8y
If we buy for cashflow and keep a reasonable amount of equity I think we’re going to fare well regardless of what happens.
5 Reply
Will G.
Rental Property Investor · Maryville, TN · Member since 2009 · 529 posts · 414 votes
8y
Matt, one reason i enjoyed stansberry interview with lacy hunt is when asked point blank will there be a "debt jubilee", which is what stansberry has been selling hard for some time, he got completely shut down by hunt.
Really worth checking out, brilliant guy, but haaard to listen to him talk in highly technical terms with his slow monotone voice. I had to speed up playback to stay focused:-)
1 Reply
Jeffrey Holst
Investor · Chattanooga, TN · Member since 2016 · 676 posts · 543 votes
8y
Seems to me the bigger problem is the coming economic Singularity where all jobs are automated by artificial intelligence. When there are no jobs the economy will have to change its going to be a dramatic and rather Sudden Change in the next 15 to 20 years. This process will greatly outweigh any economic blip even something the size of the Great Depression.
4 Reply
Sam Shueh
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
8y
Hold on to your cash. The ones who leveraged a lot can get burned. Depression coming? No.
0 Reply
Mike D.
Investor · Marion, IA · Member since 2010 · 177 posts · 117 votes
8y
Yes we are on the the longest bull run in recent history, but we also went through the largest crash in recent history. Prices aren't much higher than they were 15 years ago if you account for annual inflation.
There will be a slowdown as interest rates rise but I don't think the next slow down will be like 2008.
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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
Originally posted by @Sam Shueh:

Hold on to your cash. The ones who leveraged a lot can get burned. Depression coming? No.
Sam, how can we hang on to idle cash? The lost profits in one year of adding value and/or generating cash flow (plus principal reduction) can offset a substantial decline in value. If the decline in value takes many years to happen, the opportunity cost of idle cash and/or value adds is massive. I've never understood the war chest argument. That must be a strategy for market appreciation plays only.
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