Our Fiat Money Inflation Theory (of everything) Meets the "Real World" of the 2000's

[touchring]

Re: Our Fiat Money Inflation Theory (of everything) Meets the "Real World" of the 200

Well, i said once that the housing recession won't end unless Prices in manhattan drops by 40% from peak prices.

It happened each time a housing bubble (when prices rise 3 times or more) blows in Asia - the most expensive and prestigious piece of property where all the bankers and wealthy people live has to drop by 40% before the recession ends.

The Fed can print fiat money, it can delay the inevitable, but the inevitable will still come.

I am not sure, but I think the first sign of some major erosion or capitulation began in April and ONLY in the most distant suburbs of Silicon Valley. The further out one drives, the more prices have slumped--- which figures because of the oil shock.

I did visit some new homes for sale in March in Gilroy, and they would not cut price. They had that well known "California attitude" that prices never drop here.... Well, now they put out a sign on U.S.101 in Gilroy: "Mesa Ridge.... NEW LOWER PRICES." So, I say the turn appeared to be in April.

Closer in to San Jose, the prices show little change from last summer, and in fact in early spring, prices were slightly higher than last summer. ( Note the "California attitude", once again.) But my impression is that prices are now lower than last summer, but only slightly so. Still, NO SOLD SIGNS anywhere in San Jose, and that has to be the kicker in assessing market direction.

Well, I can not quite mis-inform you: I did see one sold sign on a 10 or 15 million dollar home in Los Gatos, one of the snob suburbs of Silicon Valley. So, for the rich, there is no recession in real estate.

And one more interesting thing: the roads are packed with cars again. I assume this is due to the mailing of the stimulus cheques thanks to Helicopter Ben.

The SUVs and Hummers are back on the freeway, and people are driving aggressively, spinning tires, and shooting in and out of lanes. Sad to say that little has changed in driving habits since the days when gas was cheaper.

[Jim Nickerson]

Re: Our Fiat Money Inflation Theory (of everything) Meets the "Real World" of the 200

Well, i said once that the housing recession won't end unless Prices in manhattan drops by 40% from peak prices.

It happened each time a housing bubble (when prices rise 3 times or more) blows in Asia - the most expensive and prestigious piece of property where all the bankers and wealthy people live has to drop by 40% before the recession ends.

The Fed can print fiat money, it can delay the inevitable, but the inevitable will still come.

touchring,

Even though I don't mind anyone questioning anything I might post, I hate to be confrontational with anyone; however, with regard to your remarks above, why should anyone believe you necessarily know anything about what you posted?

Are you in a position to follow the real estate markets in Asia to the extent you know "where the bankers and wealthy people live," and thus in a position to actually follow the prices of those pieces of real estate?

Just for elucidation, what specific instances of "housing bubble blows in Asia" are you referencing?

Further, is there something--some site--you follow to be able to determine when the "prices in Manhattan drop by 40% from peak prices"? I am not that familiar with Manhattan (New York or Kansas), but when you write of prices there, is it mainly commercial or private housing related prices or both?

It's certainly possible your words are totally correct, but how can anyone judge the credibility of your post or is your post just an opinion at which you've arrived?

[GRG55]

Re: Our Fiat Money Inflation Theory (of everything) Meets the "Real World" of the 200

Well, i said once that the housing recession won't end unless Prices in manhattan drops by 40% from peak prices.

It happened each time a housing bubble (when prices rise 3 times or more) blows in Asia - the most expensive and prestigious piece of property where all the bankers and wealthy people live has to drop by 40% before the recession ends.

The Fed can print fiat money, it can delay the inevitable, but the inevitable will still come.

Here's another financial center real estate market that is bound to correct sharply. One can see from the tone of the article that both the developers and the journalists that live in Toronto are still mired in the denial and rationalization stage. To anybody who followed the pattern in California, the explainations in this article for why the real estate market just cannot go down will sound very familiar.

Torontogoindown? :p

Jacqueline Thorpe, Financial Post Published: Friday, May 30, 2008
From his penthouse in Toronto's hip fashion district, Peter Freed can track the development of his six next condo projects taking shape along King Street West.

One of Mr. Freed's buildings will have interiors by Philippe Starck, the must-have French designer of the moment. Another will be inspired by the Neoplasticism art movement made famous by Mondrian, where design is pared down to the basics of lines and the primary colours red, yellow and blue.

Mr. Freed has eight projects on the board worth a total of half a billion dollars, a tiny fraction of the record 33,980 units under construction in the city. Canada's biggest city has become North America's biggest condo market, with more units now under development than Manhattan...

..."Right now, there's very large demand," says Mr. Freed, dressed casually in jeans, shirt-tails hanging out, no laces in his shoes.

At 39, the laid-back developer is the fresh face of an eclectic group of condo kings who are transforming the very skyline of the city...

...Toronto's rise as a global city will allow it to ride out any short-term weakness, they say...
http://www.financialpost.com/story.html?id=552055

At 39 year old developer, Peter Freed doesn't have a clue what a bear market in housing really looks like because he's not old enough to have lived through one. I wonder how laid back he'll be in a couple of years when 34,000 new condo units hit this "global city" in a province that is now leading the downturn in the Canadian economy.

[Jim Nickerson]

Re: Our Fiat Money Inflation Theory (of everything) Meets the "Real World" of the 200

Here's another financial center real estate market that is bound to correct sharply. One can see from the tone of the article that both the developers and the journalists that live in Toronto are still mired in the denial and rationalization stage. To anybody who followed the pattern in California, the explainations in this article for why the real estate market just cannot go down will sound very familiar.

Torontogoindown? :p

Jacqueline Thorpe, Financial Post Published: Friday, May 30, 2008
From his penthouse in Toronto's hip fashion district, Peter Freed can track the development of his six next condo projects taking shape along King Street West.

One of Mr. Freed's buildings will have interiors by Philippe Starck, the must-have French designer of the moment. Another will be inspired by the Neoplasticism art movement made famous by Mondrian, where design is pared down to the basics of lines and the primary colours red, yellow and blue.

Mr. Freed has eight projects on the board worth a total of half a billion dollars, a tiny fraction of the record 33,980 units under construction in the city. Canada's biggest city has become North America's biggest condo market, with more units now under development than Manhattan...

..."Right now, there's very large demand," says Mr. Freed, dressed casually in jeans, shirt-tails hanging out, no laces in his shoes.

At 39, the laid-back developer is the fresh face of an eclectic group of condo kings who are transforming the very skyline of the city...

...Toronto's rise as a global city will allow it to ride out any short-term weakness, they say...
http://www.financialpost.com/story.html?id=552055

At 39 year old developer, Peter Freed doesn't have a clue what a bear market in housing really looks like because he's not old enough to have lived through one. I wonder how laid back he'll be in a couple of years when 34,000 new condo units hit this "global city" in a province that is now leading the downturn in the Canadian economy.

If one reads that entire link, GRG, one must conclude "all is right with the world" in Toronto. It's unfortunate that jounalists, to my awarenss, seldom publish long-term followups on their stories.

[touchring]

Re: Our Fiat Money Inflation Theory (of everything) Meets the "Real World" of the 200

Just for elucidation, what specific instances of "housing bubble blows in Asia" are you referencing?

Further, is there something--some site--you follow to be able to determine when the "prices in Manhattan drop by 40% from peak prices"? I am not that familiar with Manhattan (New York or Kansas), but when you write of prices there, is it mainly commercial or private housing related prices or both?

It's certainly possible your words are totally correct, but how can anyone judge the credibility of your post or is your post just an opinion at which you've arrived?

This is my own opinion, but i would have thought that 40% correction from peak is a conservative estimate, especially if you consider how much prices has gone up since the 1970s when the printing started.

Picking out the Jim Rogers example, for how much did Jim Rogers pay for his NY townhouse and how much did he sell it for?

http://www.bloomberg.com/apps/news?p...jqs&refer=news

Dec. 19 (Bloomberg) -- Jim Rogers, author of ``Investment Biker,'' sold his New York townhouse for $16 million, a gain of almost 150-fold from the price he paid in 1977.

Can this kind of debt inflation be continued for another 30 years? If yes, then will the new owner of the townhouse see his property rise to $2.4 billion?

If $2.4 billion sounds too incredible, and it doesn't inflate, what will happen?


http://www.globalpropertyguide.com/i...-buyers-beware

Hong Kong: 61% below peak

Hong Kong property prices, as of 2Q 2006, are still 42% below their 1997 peak level, despite the significant recovery of the past two years. The collapse of the Thai baht came 24 hours after the handover of Hong Kong from UK to China. The Asian crisis combined with the bursting of pre-handover speculative bubble caused a 44.7% price decline from October 1997 to 1998. From 1997 to 2003, Hong Kong residential property prices fell by no less than 66% in nominal terms (61% in real terms due to deflation).