If we see more Inflation or even Hyperinflation, what will happen to the price of real estate or your personal home. I go over an article about the topic and would love to get your take on the subject below.
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I believe you were referring to Quantitative easing
7:20 I can't get over "exaSTerbates" hahah the first time he said it a little earlier I thought I was maybe hearing it wrong and gave him a pass… But not the second time!
the key with real estate is economic growth…and this is not happening…a big no right now….people are just coming to real estate for excess cash…wrong..especially you need an inflation caused by demand pull in the market economy…but we are seeing a cost push inflation…big one….in addition to scarcity more to come…dangerous for real estate…real purchasing power will eat away money for houses…real value of a house will only go up with economic growth…rest is bubble air……inflation is a trap…small inflation coupled with growth is good for houses…..high inflation with no growth…dangerous for houses…..and cost of maintenance will go through the roof
The best to what happens is by looking back to history.
Housing prices and rents usually does not follow together with goods but rather with affordability – which is income, while income is the last thing to go up and by usually not as much as it should be..
Best case scenario is Venezuela. Apartments and complexes abandoned by its owners. Collecting rents are just not worth the troubles.
The real question is who will be able to afford rent never mind the price of a home.
He meant interest have to rise in order to keep money in the bank..
If one is concerned about the LONG-TERM survivability of the dollar (or current government or empire/superpower-status as history teaches logical thinkers what eventually happens to literally 100% of empires/governments/superpowers or their paper-currencies) within just 1-decade, when should one buy at least a getaway/vacation house if they can pay cash for it & remain debt-free?
I understand real-estate prices aren't sustainable (especially for the younger/millennial-generation) unless they/powers keep the inflation growing non-stop long-term (which I don't see happening either) – thus, I tend to agree the current powers/Fed will likely raise interest rates to delay inflation from getting "EXCEPTIONALLY BAD" (thus, buy some more time before 'collapse' phase) which would likely lower home prices and if that occurs, that would probably be a better time to buy. However, if they raise rates, that will cause a mess in the economy as many people/consumer-class and businesses (+ government) are ALREADY DROWNING IN DEBT & raising rates could bankrupt more entities which is 1 counter-argument why the powers that be may try to prevent raising the interest-rates & keep inflation-levels rising. Therefore, when would be an appropriate time to buy a vacation/getaway house entirely for cash? Now when real-estate prices are at record highs (seems not the best time due to record-high prices ABOVE previous "housing bubble's peak") or later but if inflation-levels continue increasing (without a deflationary-reverse), one's cash/purchasing-power will only erode much further?
The endgame of runaway inflation is that the government is forced to rapidly increase interest rates to get the thing under control. At that point the cost of borrowing money to finance a house goes sky high on the property prices collapse
So the ninja believes the FED will increase interest rates/ a.k.a. taper. They should have done that already like 4 years ago, now it`s too late and they are not even talking about it. I guess they look forward to hyperinflation to burn up their massive depths which just keep growing bigger as the economy ever smaller, and once they raise Interest rates, 50% of "Business" will die, as well as all the inflated Markets taking down the government itself.
Say the new houses normally cost $500k to build, during the inflation cost increases 30% more to $650k and it sells at $700k in inflation. When the mortgage rates go up to a degree, will the new houses be cheaper than its cost of $650k? I have no idea but I feel it won't
if i understand correctly…..after the 70s…. becouse of inflation….. nobody bought bonds….. no1 buys bonds…. intrest rates goes up to 16%……. from today if intrest rate goes up to |0% within the next 3-4 years…… housing market is fucked?
This sucks because I've got this house I'm fixing up and gonna be selling for 300k because prices in that area are insanely hot, but I'm desparate to spend that back into a condo or something of relative permanence for my own safety as I don't trust renting for the life of me, over the next 5-10 years I'm terrified with living in this society, forget a hedge against inflation, I need a hedge against homelessness.
Sacramento, CA Housing Prices Crater 22% As Appraisal Fraud Hobbles California
Does debt also inflate away during times of high inflation? As cash becomes less valuable so does debt? For example, with $1000.00 loan with income at 100 bucks a month to pay off that loan pre inflation, loan stays $1000.00; but now paid 500 bucks a month during high inflation; so easier to displace loan?
Yes, only if it is variable rate debt. Most home loans are fixed-rate so not sure if your thesis will apply to real estate or other hard assets financed with fixed-rate debt.
Real Estate will crash for a unique reason, first time ever: The inability to execute ANY plan of action because the consequences of any plan or action is too horrific to apply. This is where Keynesian economics has brought us and there is no way out of a chaotic implosion to the financial system. If the house is valued in a fiat that goes zero, guess what, the value of the house goes to zero also. See Venezuela for a confirm
National debt=30 trillion…current interest on that debt=@ one trillion a year. Interest rates can not rise as government will have to start to borrow to pay the interest on the debt. If interest rates rise…any money in banks, or 401k's, or IRA's or in government pensions or in Vanguard, or in Fidelity will go to zero i.e. kiss that money goodbye.
Inflation is being manipulated by the fed and the left.
Good luck to businesses and private equity firms out there! Hope you can stay in business selling whatever goods and services you provide and can afford your current employees salaries to keep up with high inflation and avoid major businesses tax payments, cause taxes don’t pay themselves. Those government employees need to keep up with inflation too!
Also good luck to those foreign businesses and investors too, cause hyper inflation means lower dollar values which means only people using your goods and services would be your own people in your countrys ever increasing currency value, which probably isn’t a lot of.
What about stagflation