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HOT TOPIC Is a market crash coming? Or massive hyper-inflation?

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E-Sharp

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Coastal Cali outside of LA, that is not enough as of today for a 3 bed 2 bath condo in my area. No I am not talking about city proper either. And yes I have a six figure income.
First you said "basic condo" then you change it to you can't afford a 3 bd 2 bath condo. Yes, RE prices may be inflated but many people can't afford multiple bedrooms and baths in their first property - and that is nothing new.
 

hellolin

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First you said "basic condo" then you change it to you can't afford a 3 bd 2 bath condo. Yes, RE prices may be inflated but many people can't afford multiple bedrooms and baths in their first property - and that is nothing new.

3 bd 2 bath is very basic in my area. Anything smaller should be considered an apartment. Yes I am aware that the RE listing still classify it as a condo, but that's not really the reality.

And please, someone with that kind of income in a past time would be able to buy much nicer things. Now I do realize I live in costal Cali which isn't ideal when talking about RE prices, but still, I can't fathom how people live when earns less than me. But perhaps that's why lots of people are moving out of here.
 

Matt33

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it's a nice hedge to make sure you own something when the world burns, but it doesn't pay the bills in the meantime.

I would still recommend owning some though, if you have any net worth at all.

...unfortunately all of mine was lost in a boating accident ;)
Mine was also lost in a boating accident.
 

biophase

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3 bd 2 bath is very basic in my area. Anything smaller should be considered an apartment. Yes I am aware that the RE listing still classify it as a condo, but that's not really the reality.

And please, someone with that kind of income in a past time would be able to buy much nicer things. Now I do realize I live in costal Cali which isn't ideal when talking about RE prices, but still, I can't fathom how people live when earns less than me. But perhaps that's why lots of people are moving out of here.
Lol. Basic condo? 3br 2ba. Guess what, in a past time that was considered a normal sized home.

Id look up your salary adjusted vs inflation and compare it to the year 2000 and then compare the year 2000 home prices. I think you’d find it’s close to the same.

People don’t deserve to live wherever they want. I want to live at the beach, but a top 1% income can’t even afford that now. Does that mean I should be able to?

And let’s not forget that your post said any city outside of NY and SF. Now you are talking about a place close to the ocean with decent weather all year around.
 

thechosen1

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Lol. Basic condo? 3br 2ba. Guess what, in a past time that was considered a normal sized home.

Id look up your salary adjusted vs inflation and compare it to the year 2000 and then compare the year 2000 home prices. I think you’d find it’s close to the same.

People don’t deserve to live wherever they want. I want to live at the beach, but a top 1% income can’t even afford that now. Does that mean I should be able to?

And let’s not forget that your post said any city outside of NY and SF. Now you are talking about a place close to the ocean with decent weather all year around.
This.

Let's not forget that only 1 or 2 generations ago, a successful middle class family would actually live in a house around 1000 square feet with just 1 bathroom.

Wood siding. Probably not even on a slab - blocks or pier & beam (at least down south).

One car. Garage optional.

Our expectations are through the roof, and so are the regulatory costs of construction (not to mention massive money printing, devaluation of the dollar, leading to inflation compounding for years)
 

Matt33

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Lol. Basic condo? 3br 2ba. Guess what, in a past time that was considered a normal sized home.

Id look up your salary adjusted vs inflation and compare it to the year 2000 and then compare the year 2000 home prices. I think you’d find it’s close to the same.

People don’t deserve to live wherever they want. I want to live at the beach, but a top 1% income can’t even afford that now. Does that mean I should be able to?

And let’s not forget that your post said any city outside of NY and SF. Now you are talking about a place close to the ocean with decent weather all year around.
Don't forget that the official inflation numbers are much lower than the real inflation numbers
 

biophase

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Don't forget that the official inflation numbers are much lower than the real inflation numbers
Do you think inflation is location dependent? Like if lumber prices are up, they are up in the entire USA? Or can there be inflation in Cali and no inflation in Kansas for lumber? Just curious because McDonald’s value meal prices have gone up everywhere since 2000, but real estate prices have not.
 

Matt33

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Do you think inflation is location dependent? Like if lumber prices are up, they are up in the entire USA? Or can there be inflation in Cali and no inflation in Kansas for lumber? Just curious because McDonald’s value meal prices have gone up everywhere since 2000, but real estate prices have not.
I think each market is different, whether it's a local real estate market or a lumber market. But I think across the board the US dollar inflation is the same.. perhaps? I can't see why it wouldn't be.

Either way I know the number 3% is a joke. It's one way to tax us more than we think. We made a big "gain" in dollar value, but in reality little value was added. They just printed money. Now we get to pay tax on a gain that largely doesn't exist.
 

biophase

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I'm not denying that there is inflation. But I don't think that @hellolin said about not being able to afford a 3/2 home in Cali making over $100k is a sign of inflation.

I bought my first home in 1999. I was making $60k a year and interest rates were 8.5%. I was able to afford a $200k mortgage max. In Chicago a 3/2 home in a decent suburb was $170k-$200k. I bought a home for $230k, with $30k down, 15%.

Today, the same home that I bought is worth $425k. If I was still making $60k a year, I could afford a $350k mortgage at 3.5%. So I could actually buying my same house with 20% down ($75k). But of course, my salary today wouldn't be $60k/yr. If I stayed at my job and I could reasonably predict I'd be making at least $120k, in which case, that same house would be easily affordable to me today.

Yes, Chicago turned out to be a shitty real estate market. If I try this example in LA, it probably won't come out so nicely. However, it is not as off as you think. I know the prices of some homes in Orange County that were $300k in 2002 and are now $800k. If you do the math comparing your salary in 2002 with your salary in 2021 and the current interest rates, I bet the numbers are close.

It's the low interest rates that make homes go up now because people with lower salaries can afford to pay more so the price goes up. Back in 1999 I could only afford a $200k home, but if the rates were at 3.5%, I could have bought a $350k home. Nothing else changes, you pay the same monthly amount for a $200k home and a $350k home. So guess what, I would have been shopping in a better neighborhood for a more expensive home!
 

Taylor02

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Hi All,

Recently I have been doing a lot of reading around historic market crashes, current state of affairs across a myriad of industries and economics in general.

I am interested in discussing with my fellow Fastlaners their views on the state of the economy both nationally and globally and their future predictions of what they see unfolding. I am writing from the perspective of someone based from the UK.

My research to date has highlighted the following:
  1. It is clear that we have been in a bull market for a prolonged period of time since around 2009 onwards that has only seen a temporary dip when the Corona Virus pandemic struck.
  2. Interest rates for borrowing such as mortgages are still at an all time low. This is unprecedented, if there was to be a shift in variables it could drastically effect the vast amount of peoples ability to pay on their current loans and default.
  3. The amount of relief provided in the UK and that is still on going through schemes such as Furlough has seen our national debt at an all time high only rivalled since debt levels from WW2. Additionally, I believe that I read that the US has printed 22% of all the US dollars in circulation in 2020 alone...
  4. The valuation of certain company's such as Tesla are outrageous. Don't get me wrong, Elon is doing amazing things and has interesting projects and technology's in the pipeline but no company's PE Ratio should be 1,232. So in essence the PE Ratio is currently trading at $1,232 per $1 of earning... High right?
  5. Crypto currency's in general a plethora of the coins are still seeing rises linked to a bull market even though some of the technology's behind them are not leading the charge such as Doge Coin.
  6. The property market. In the UK I work for a property developers and it is clear at the moment that the market is beginning to slow. This was artificially stimulated throughout 2021 during the pandemic when the government provided Stamp Duty and Land Tax (SDLT) relief on property purchases up to the value of £500k. For any readers from outside of the UK this can save an individual up to £15k if they were to move or purchase a property. Now that this relief is coming to a close it has resulted in a slow in demand in the market.
These are just a few of my observations but I would be interested to hear other peoples thoughts on this.

In my opinion something has to give at some point... It can't be good times forever. The pandemic's effects I don't believe have still not truly been felt as there should be a spoke in unemployment rates once the Furlough Scheme comes to a close, in the UK anyway. 2022 I think will prove to be an interesting year.

Just my 2 cents.

Best,

S
I am also UK based and am very concerned about where our economy is heading. I am looking at the costs of everyday living and seeing much higher prices to suggest inflation is really starting to take off.

I live near a major UK port and know many EU drivers have left the UK to return to Europe. This has led to a shortage of drivers and goods / higher prices. The Pandemic has also given a huge labour shortage as people are being paid to stay at home, again inflating prices of goods.

At the same time our money is being devalued and more money chasing the same good/services has pushed prices up and given us less for our British pound.

All in all no good news so far!!!

I've also seen the property market slow but only after prices went parabolic. I can't work out if Inflation continues will this increase or decrease property? Maybe someone smarter than me will know the answer?

Personally I allocate a small amount monthly to stocks and shares but not too much as I am worried about the market being in a bubble and crashing. My main monthly investments are now BTC ETH Gold & Silver (Canadian Maples when I can get them).

The reason for my investing strategy is - I really believe we have kicked the can long enough and are coming to the end of the road.

Our monetary system is about to be replaced and we will lose financially when this happens. Also with inflation robbing us through back door taxation, I see the crypto and physical metals as best to beat inflation.

I also want my money out of the banking system should banks start to fall.

As for property I am buying a house which I don't want to but the Mrs does (Happy wife happy life) I feel the market will crash and I would prefer to wait. The way I have justified the purchase is to look at it as buying the debt rather than the house.

I have secured a 5 year fixed rate at 1.09% Historically this is very low and will offer me some protection should my my businesses decline as the great depression bites.

So the good news

You can beat inflation and what is going to happen when Fiat currencies fail. You can still acquire property at BMV and very cheap rates and there will be some exciting opportunities for business owners as the world is reset.

What I do buy/do every month to keep moving forward and stay ahead when the crash fully happens.

60% BTC
20% ETH
10% Other crypto (speculation)
10% Gold & Silver

I buy debt as cheaply as possible on long term fixed rates.
Invest in building my own businesses to give me an income and stay ahead of inflation.

As a new member this was my first reply to a post and I hope it was helpful.
 

Marigold

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I am also UK based and am very concerned about where our economy is heading. I am looking at the costs of everyday living and seeing much higher prices to suggest inflation is really starting to take off.

I live near a major UK port and know many EU drivers have left the UK to return to Europe. This has led to a shortage of drivers and goods / higher prices. The Pandemic has also given a huge labour shortage as people are being paid to stay at home, again inflating prices of goods.

At the same time our money is being devalued and more money chasing the same good/services has pushed prices up and given us less for our British pound.

All in all no good news so far!!!

I've also seen the property market slow but only after prices went parabolic. I can't work out if Inflation continues will this increase or decrease property? Maybe someone smarter than me will know the answer?

Personally I allocate a small amount monthly to stocks and shares but not too much as I am worried about the market being in a bubble and crashing. My main monthly investments are now BTC ETH Gold & Silver (Canadian Maples when I can get them).

The reason for my investing strategy is - I really believe we have kicked the can long enough and are coming to the end of the road.

Our monetary system is about to be replaced and we will lose financially when this happens. Also with inflation robbing us through back door taxation, I see the crypto and physical metals as best to beat inflation.

I also want my money out of the banking system should banks start to fall.

As for property I am buying a house which I don't want to but the Mrs does (Happy wife happy life) I feel the market will crash and I would prefer to wait. The way I have justified the purchase is to look at it as buying the debt rather than the house.

I have secured a 5 year fixed rate at 1.09% Historically this is very low and will offer me some protection should my my businesses decline as the great depression bites.

So the good news

You can beat inflation and what is going to happen when Fiat currencies fail. You can still acquire property at BMV and very cheap rates and there will be some exciting opportunities for business owners as the world is reset.

What I do buy/do every month to keep moving forward and stay ahead when the crash fully happens.

60% BTC
20% ETH
10% Other crypto (speculation)
10% Gold & Silver

I buy debt as cheaply as possible on long term fixed rates.
Invest in building my own businesses to give me an income and stay ahead of inflation.

As a new member this was my first reply to a post and I hope it was helpful.
I agree.

The housing market where I am in Scotland is going crazy. Properties are coming on and going to closing date almost straight away. I too would prefer to hold off on buying property (I'm looking) as I do believe there's going to be a correction/crash as soon as furlough ends.
 

Vasili27

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personally I think crypto is something I would recommend holding im holding mine for the long haul, I went in with 4 figures and was making high 5 figure profits and even with everything coming down was still able to turn a profit if I wanted too. Also had a little bit of cash and went in and bought some more knowing that in the odd economic state we are in it can go up and just by following the crypto trends since the beginning of C0VlD nothing stays that low for long. But I believe sitting on cash is mostly likely a smart idea and since the big corps are doing it shows you are in the right direction.
 

Vasili27

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I am also UK based and am very concerned about where our economy is heading. I am looking at the costs of everyday living and seeing much higher prices to suggest inflation is really starting to take off.

I live near a major UK port and know many EU drivers have left the UK to return to Europe. This has led to a shortage of drivers and goods / higher prices. The Pandemic has also given a huge labour shortage as people are being paid to stay at home, again inflating prices of goods.

At the same time our money is being devalued and more money chasing the same good/services has pushed prices up and given us less for our British pound.

All in all no good news so far!!!

I've also seen the property market slow but only after prices went parabolic. I can't work out if Inflation continues will this increase or decrease property? Maybe someone smarter than me will know the answer?

Personally I allocate a small amount monthly to stocks and shares but not too much as I am worried about the market being in a bubble and crashing. My main monthly investments are now BTC ETH Gold & Silver (Canadian Maples when I can get them).

The reason for my investing strategy is - I really believe we have kicked the can long enough and are coming to the end of the road.

Our monetary system is about to be replaced and we will lose financially when this happens. Also with inflation robbing us through back door taxation, I see the crypto and physical metals as best to beat inflation.

I also want my money out of the banking system should banks start to fall.

As for property I am buying a house which I don't want to but the Mrs does (Happy wife happy life) I feel the market will crash and I would prefer to wait. The way I have justified the purchase is to look at it as buying the debt rather than the house.

I have secured a 5 year fixed rate at 1.09% Historically this is very low and will offer me some protection should my my businesses decline as the great depression bites.

So the good news

You can beat inflation and what is going to happen when Fiat currencies fail. You can still acquire property at BMV and very cheap rates and there will be some exciting opportunities for business owners as the world is reset.

What I do buy/do every month to keep moving forward and stay ahead when the crash fully happens.

60% BTC
20% ETH
10% Other crypto (speculation)
10% Gold & Silver

I buy debt as cheaply as possible on long term fixed rates.
Invest in building my own businesses to give me an income and stay ahead of inflation.

As a new member this was my first reply to a post and I hope it was helpful.
I agree with almost everything your says but it terms of crypto I don't think IMO BTC or ETH is the way to go I would say invest in any crypto currency that has a utility use (XRP,chainlink,dot,steller,tron,etc). The new currency will most likely be a coin and that coin will need some sort of infustructre/utilities that im assuming the fed can just out source since people are making it already. although BTC and ETH is a good investment right now because of inflation I def don't think its good long term IMO. all these government people want the world to go green and move away from so called "dirty" energy. I feel the same will go with the the production these coins they cost a tremendous amount of power to produce and the technology is outdated. the amount of one whole coin is a lot and the only possible way you could use it Is to break it down(for normal everyday use) and that defeats the purpose having it in the first place. Could they find a away to mine these 2 coins using more "eco friendly ways" yes you could but I doubt they will take that approach when there are utility coins being mind at 100s of % lower power than BTC or ETH. not saying there not good investments right now because even I would at this moment in time. But I think holding those to for the long haul might not be the best idea judging it form those factors, then again might be wrong lol. Just sharing my thoughts.
 
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pat9000

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I love DeFi and it can be pretty lucrative, but difficult.

For example, I went to Pancakeswap.finance and hopped in the cake pool back in February. I've been enjoying 100% - 140% APY on my investment. About 5X'ed my investment and if I want to liquidate, I can anytime. Truly the future and even Mark Cuban has embraced it. Just look at his blog, blog maverick. He did lose $75,000 on a rug pull though lmao Titan coin I think...
 

Vasili27

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I love DeFi and it can be pretty lucrative, but difficult.

For example, I went to Pancakeswap.finance and hopped in the cake pool back in February. I've been enjoying 100% - 140% APY on my investment. About 5X'ed my investment and if I want to liquidate, I can anytime. Truly the future and even Mark Cuban has embraced it. Just look at his blog, blog maverick. He did lose $75,000 on a rug pull though lmao Titan coin I think...
I have heard of that I believe there called syrup pools and im very interested in these
 

thechosen1

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