The Fed Reserve was supposed to protect the value of the U.S. Greenback â€" at least that is how it was originally sold to the general public. We still don't know why the dollar required "protection". It was solid for the longest time, except for the time when President Lincoln printed too many of them to pay for the War between the States, but those greenbacks came and went.
When the Fed was set up in 1913, the greenback was worth as much on that day as it was when Napoleon Bonaparte set off for Russia.
Instead what the Federal Agency has successfully done is permit the dollar to slide and decline through the 20th century and is now worth only about 3 cents! The chance of a continuing decline is robust.
The Great Correction
So long as the Great Correction continues, joined with traditionally low rates, it's going to be a wonderful time to invest in property.
Thanks to the genesis of the Fed Reserve virtually 100 years back, Ben Bernanke has a little "technology" called a printing press. And he knows how to use it!
The Great Correction commenced about 5 years ago and the Feds have been fighting it ever since with trillions of greenbacks of fiscal and monetary stimulus.
Naturally, the markets and the economy reacted positively and GDP expansion recommenced in 2009. Nevertheless there is no ?recovery? The private sector is correcting and the GDP expansion rates have been going down for 40 years.
The feds may continue to fight these disheartening growth rates, and they will fight the Great Correction together with it.
The government borrows over a trillion dollars per year with no end visible. Last year, 61% of that money came from? Ben Bernanke's printing press!
The issue is that almost all of the growth is dependent upon further spending and money-creation by the Feds. This continued money creation will further wear away the U.S. Greenback thru inflation, permitting you to pay down your fixed rate mortgage with less expensive and less expensive greenbacks, and eventually making your mortgage pointless.
US Real Estate Today
US real estate might be the best investment of all time today. Adjusted for inflation, housing costs are back to 1979 levels, and mortgage rates are about 1/3 what they were back then at 15% to 20%. Over the term of a $200,000 mortgage you would pay as much as $700,000 including interest.
In addition, the everyday house sold in 1979 was about 1,600 square feet while the average house today is about 2,200 square feet. That's a difference of $75 per square foot now vs $100 in 1979. That is a much bigger home.
There are very good real estate deals to be had in markets all round the U.S. For example, you should buy 3-bedroom single-family houses between $50,000 to $80,000 in markets like Indianapolis, Atlanta and Kansas Town, among others, with hires between $700 and $900 per month. And all these properties generate double-digit capitalization (cap) rates.
US housing is a better deal now than it has ever been re affordability and price per greenback. To get back to business cost levels, the price would need to elevate by $100,000.
If you could borrow mortgage loans at the base rates in history, and ahead of what could actually be the largest inflationary time in U.S. History, would you not borrow as much as you possibly could?
When the Fed was set up in 1913, the greenback was worth as much on that day as it was when Napoleon Bonaparte set off for Russia.
Instead what the Federal Agency has successfully done is permit the dollar to slide and decline through the 20th century and is now worth only about 3 cents! The chance of a continuing decline is robust.
The Great Correction
So long as the Great Correction continues, joined with traditionally low rates, it's going to be a wonderful time to invest in property.
Thanks to the genesis of the Fed Reserve virtually 100 years back, Ben Bernanke has a little "technology" called a printing press. And he knows how to use it!
The Great Correction commenced about 5 years ago and the Feds have been fighting it ever since with trillions of greenbacks of fiscal and monetary stimulus.
Naturally, the markets and the economy reacted positively and GDP expansion recommenced in 2009. Nevertheless there is no ?recovery? The private sector is correcting and the GDP expansion rates have been going down for 40 years.
The feds may continue to fight these disheartening growth rates, and they will fight the Great Correction together with it.
The government borrows over a trillion dollars per year with no end visible. Last year, 61% of that money came from? Ben Bernanke's printing press!
The issue is that almost all of the growth is dependent upon further spending and money-creation by the Feds. This continued money creation will further wear away the U.S. Greenback thru inflation, permitting you to pay down your fixed rate mortgage with less expensive and less expensive greenbacks, and eventually making your mortgage pointless.
US Real Estate Today
US real estate might be the best investment of all time today. Adjusted for inflation, housing costs are back to 1979 levels, and mortgage rates are about 1/3 what they were back then at 15% to 20%. Over the term of a $200,000 mortgage you would pay as much as $700,000 including interest.
In addition, the everyday house sold in 1979 was about 1,600 square feet while the average house today is about 2,200 square feet. That's a difference of $75 per square foot now vs $100 in 1979. That is a much bigger home.
There are very good real estate deals to be had in markets all round the U.S. For example, you should buy 3-bedroom single-family houses between $50,000 to $80,000 in markets like Indianapolis, Atlanta and Kansas Town, among others, with hires between $700 and $900 per month. And all these properties generate double-digit capitalization (cap) rates.
US housing is a better deal now than it has ever been re affordability and price per greenback. To get back to business cost levels, the price would need to elevate by $100,000.
If you could borrow mortgage loans at the base rates in history, and ahead of what could actually be the largest inflationary time in U.S. History, would you not borrow as much as you possibly could?
About the Author:
Marco Santarelli is 1investor, author, and the instigator of Norada Real-estate Investments â€" a state real estate investment firm offering turnkey investment property in growth markets across the nation. Also he is the original writer of How to Invest with a Falling US Buck.
