Fed Farts

The Fed is blowing bubbles fueled by the gaseous dollars they continue to print.  These printed dollars dilute the dollars that were earned and are legitimate.  Not all of these dollars are locked in megabanks’ liquidity cells.  A trillion goes to feed federal government overspending and turns into current real inflation.   We suspect that the ‘banksters’ are lending other trillions to investors who are riding the housing and stock market bubbles. 

Home Price Bubble

It’s easy to identify the beginning of the current home price bubble that developed after 2008.  For speculators, the low hanging fruit included foreclosures in viable neighborhoods with active, qualified home buyers.  The continued low home interest rates made home purchase an easy decision for higher income families.  When monthly rents are higher than monthly house payments and interest rates are low, these families become “buyers”

Before 2008, when we had an economy, 25 to 35 year olds were a major force driving home purchases.  But with Obama’s war on the U.S. economy, these folks are unemployed and under-employed.  When we had an economy, new college grads could at least find jobs that paid enough to give them the promise of self-support.  But with Obamacare’s 30 hour week and the job market share of minimum wage jobs, new grads are left with these low-paying jobs. With continuing high legal and illegal immigration, these conditions will not change. There are simply not enough jobs for both citizens and immigrants, nor will there be unless significant changes are made in U.S.  policy.

When the home speculators figure out when they will run out of home-buying customers, they will stop buying and home prices will level off and head lower.  When homeowners figure out they are playing “musical chairs”, they will worry if there will be any buyers when they are ready to sell their homes.  More pressure will appear of interest rates move higher.  Interest rates have a dollar for dollar effect on home prices. 

There appears to be no safe haven.  Seniors who recognize the dynamics described above may be tempted to sell now and turn their equity into cash.  But cash is more than ready to be devalued.

Most seniors will not sell now; they will retain their homes, because at least a home is a real asset.  The old family homes that were inherited by the family during times of “low home prices” were retained and used by family members, rather than being sold at a loss.

Some will hedge with gold and silver despite the fact that this market can be manipulated.  The problem here is retaining enough cash to absorb higher prices that come with inflation and taking gains made in the metals.

Many families who are not tied to urban jobs are selling their homes and buying small farms.  These are sales reps who can live anywhere in their territory, the self-employed and others who don’t really need to go to an 8 to 5 job in the city. This is a good move for survivalists who are physically and financially able to set up a “truck farm” to grow their own food. They will need to be vigilant to protect their land from take-over by federal agencies.

I like stocking up on can goods.  If the economy crashes and the food stores run out of food, can goods will suffice for a while. If my home is threatened by urban rioters, I will simply throw can goods at them.

Norb Leahy, Dunwoody GA Tea Party Leader