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EJ
02-25-09, 06:46 PM
http://www.itulip.com/images/bus.jpgWhat just happened?

As Paul Volcker pointed out over the weekend, the global financial system has disintegrated and no one has any idea how to fix it. Lots of good ideas about how to fix the banking system, but as we've explained, even if any of these things are done -- and we are not holding our breath -- it's the endogenous credit system that's the real problem, the one that used to magically allow consumers to lend new money into existence by taking out a car loan or charging dinner on their Visa card, the one that depended on the now defunct securitized debt market.

Most reasonably aware North Americans have, like me, watched this mess develop for over 20 years (http://www.itulip.com/forums/showthread.php?p=4486#post4486). Credit was substituted for savings. Two incomes were substituted for one. Other people's savings were substituted for our own.

These past 20 years have been like a long bus ride into the middle of a desert without food or water, with the driver all along telling us that, no, we are not heading into a desert but traveling along a long stretch of beach that leads to an ocean with palm trees and swimming pools, we just can't see the water yet.

All along the way the skeptics look out the window and say, "We're going the wrong way," and, "Shouldn't we turn around or at least stop to pick up drinking water in case you're wrong?"

"Stop being so negative," yells the driver over his shoulder. "You don't understand neo-classical geography."

Meanwhile, the rest of the passengers in the bus sit watching Survivor on portable DVD players or reading about Britney Spears's hairstylist in The National Enquirer.

One day the bus runs out of gas. The driver gets out, looks around and says, "How about that. Here we are in the middle of the desert without food or water. Who could have known?"

He pulls out a cell phone and shortly a helicopter rescues him and his friends, leaving everyone else behind to fend for themselves.


The End

Postscript: Our leaders have driven our economy to the place economies eventually wind up that run on credit, discourage savings, and sold off productive capacity needed to generate new savings. Our readers have not listened to them but have saved their own food and water, metaphorically speaking, by staying out of debt and increasing their savings, even if this was not what everyone else was doing. Good for you. On the other hand, readers who are expecting a Mad Max world need to get a grip and re-read Are You a Doomer? (http://www.itulip.com/forums/showthread.php?p=11355#post11355) Law abiding citizens do not turn into criminals overnight. Your town will not be run by warlords. There will be no wandering hoards of looters or ox-drawn Rolls Royces. That's Y2K stuff. Try to keep it in perspective, folks. Everything is going to get really, really slow for a while.

iTulip Select (http://www.itulip.com/forums/showthread.php?t=1032): The Investment Thesis for the Next Cycle™
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BadJuju
02-25-09, 07:19 PM
I am going to give up on putting on the tactical gear all together! :mad: He he, thanks for the post, EJ.

Jay
02-25-09, 07:40 PM
EJ, I hear you and feel you are right, but wouldn't hyperinflation be a doomer scenario? One that you have suggested now might happen, albeit a small chance. My take was that the doomer rhetoric picked up recently due to these hyperinflation articles. If you think it might be true, even if only a small chance, it would be unwise in my book to not at least think about what that world might look like, and I don't think it would be pretty.

don
02-25-09, 07:48 PM
For the first time today I heard the Q word used to estimate the amount of derivatives out in Deep Space. That's Quadrillion. I'm not even sure how much that's suppose to be. There are actually dueling Quadrillion Definitions out there. Sounds like a god damn waltz in a costume drama. The Quadrillion. The number preceding the magic word was 1.6. Of course the other magic word is Derivatives. Much too revealing, those four little syllables. It would unerringly point a finger at guess who :eek: :D Not the poor dumb slobs that got roped into granite counter tops ;)

BrianL
02-25-09, 07:58 PM
... That's Quadrillion. I'm not even sure how much that's suppose to be. There are actually dueling Quadrillion Definitions out there. ..

That isn't unique to quadrillion. Billion and up, labels for numbers diverge. In some regions, 1 billion is 1,000,000,000. Elsewhere 1 billion means 1,000,000,000,000.

See http://en.wikipedia.org/wiki/Long_and_short_scales#Comparison for more detail.

(I'm not downplaying the size of quadrillion or talking about how accurate it is in this case, just trying to clarify the definition point)

phirang
02-25-09, 07:59 PM
nominal size is irrelevant. NETTING is what counts.

kartius919
02-25-09, 08:05 PM
Netting, funny. How much has that netted the US? AIG is a derivatives sinkhole and the taxpayers are keeping all the sheisters solvent.

dbarberic
02-25-09, 08:26 PM
A glimmer of hope; just like Obama's speech.

Or... is it deeper.....

GRG55
02-25-09, 08:46 PM
...On the other hand, readers who are expecting a Mad Max world need to get a grip and re-read Are You a Doomer? (http://www.itulip.com/forums/showthread.php?p=11355#post11355) Law abiding citizens do not turn into criminals overnight. Your town will not be run by warloards. There will be no wandering hoards of looters or ox-drawn Rolls Royces. That's Y2K stuff. Try to keep it in perspective, folks. Everything is going to get really, really slow for a while.


No Mad Max?
Really??? :mad:


For Sale: Partially finished bunker. Motivated seller. Includes free snow shovel and armoured Hummer. Will consider trade for McMansion in the suburbs...

we_are_toast
02-25-09, 08:57 PM
No Mad Max?
Really??? :mad:


For Sale: Partially finished bunker. Motivated seller. Includes free snow shovel and armoured Hummer. Will consider trade for McMansion in the suburbs...

If you want, I can mount my BB gun to the hood of my 1970 rusted out C10 chevy pickup and drive it around your place a couple of times if it would make you feel better?

tastymannatees
02-25-09, 09:19 PM
EJ, I hear you and feel you are right, but wouldn't hyperinflation be a doomer scenario? One that you have suggested now might happen, albeit a small chance. My take was that the doomer rhetoric picked up recently due to these hyperinflation articles. If you think it might be true, even if only a small chance, it would be unwise in my book to not at least think about what that world might look like, and I don't think it would be pretty.

Crime does go up during economic downturns, so on scale of one to ten how bad does it get over the current risk.? I live 5 and ten miles from two high crime cities, in good times we get some overflow in the suburbs. My street had 5 burglaries last summer, the break ins occurred at night while people were asleep and were robbed at gunpoint...

When you are desperate the middle class looks pretty rich and is easy pickings for those with nothing to lose...

I think the advice should be it'll be generally OK but be prepared for any contingency


Law abiding citizens do not turn into criminals overnight

What if they are not Law abiding citizens to begin with?

jk
02-25-09, 09:25 PM
Everything is going to get really, really slow for a while.
the last year or two have certainly been action packed. but real bear markets aren't v-shaped. they end in boredom and light volume as everyone loses interest and the averages scrape along support.

Jay
02-25-09, 09:30 PM
the last year or two have certainly been action packed. but real bear markets aren't v-shaped. they end in boredom and light volume as everyone loses interest and the averages scrape along support.
Sure jk, but what level is support at this time around?

jk
02-25-09, 09:51 PM
Sure jk, but what level is support at this time around?
when all these discussions are boring, and no longer elicit a frisson of anxiety and ecstasy, when you don't bother to check the markets for a week or two because you just forget to, we'll be there.

FRED
02-25-09, 09:54 PM
when all these discussions are boring, and no longer elicit a frisson of anxiety and ecstasy, when you don't bother to check the markets for a week or two because you just forget to, we'll be there.

Quite right! Apply the Japanese experience to the DJIA.

It's 2026. The DOW is trading at 2700, 81% below its peak.

Zzzzzzzzzzzzzzzz.

Contemptuous
02-25-09, 10:04 PM
Fred - I've now got this comment archived. I think it may come back to haunt you in 12-18 months. There is a stock market explosion - or moonshot, however we want to call it - up ahead not too far away, which iTulip will then have to re-incorporate into their thesis, and that may be a bit awkward given the unequivocal prognosis below to the contrary. USD set to bust out on the upside soon now is my view and can rise into the mid-90's this time. Stock market after the completion of this meltdown can be like dry tinder doused in gasoline (when torched, it goes up, a lot).


Quite right! Apply the Japanese experience to the DJIA.

It's 2026. The DOW is trading at 2700, 81% below its peak.

Zzzzzzzzzzzzzzzz.

a warren
02-25-09, 10:14 PM
Luke, Is this explosion going to be nominal or real?



Fred - I've now got this comment archived. I think it may come back to haunt you in 12-18 months. There is a stock market explosion - or moonshot, however you will then want to call it - up ahead not too far away, which iTulip will have to laboriously re-incorporate into their thesis IMO quite soon.

jtabeb
02-25-09, 11:03 PM
For Sale: Partially finished bunker. Motivated seller. Includes free snow shovel and armoured Hummer. Will consider trade for McMansion in the suburbs...

Sold!! For a fist-full of Ben Franklins! (or will trade for a large cash of firearms and ammunition, 20 year supply)

jtabeb
02-25-09, 11:06 PM
Fred - I've now got this comment archived. I think it may come back to haunt you in 12-18 months. There is a stock market explosion - or moonshot, however we want to call it - up ahead not too far away, which iTulip will then have to re-incorporate into their thesis, and that may be a bit awkward given the unequivocal prognosis below to the contrary. USD set to bust out on the upside soon now is my view and can rise into the mid-90's this time. Stock market after the completion of this meltdown can be like dry tinder doused in gasoline (when torched, it goes up, a lot).

I don't think he means in real terms, do you luke? I look to the history and have to ask has there ever been a deflationary collapse on a FIAT currency?

Von Mises predicted a crack-up boom, I really can't see how it turns out otherwise.

What am I missing?

orion
02-25-09, 11:10 PM
Lukester,

Could you expand more on your call.

How high and long is this moon shot?

What convinces people to be so optimistic? I guess it's not an inflation thing as you say dollar goes up.

You seem to imply this crisis ends quickly.


Stock market after the completion of this meltdown can be like dry tinder doused in gasoline (when torched, it goes up, a lot).

metalman
02-25-09, 11:40 PM
Lukester,

Could you expand more on your call.

How high and long is this moon shot?

What convinces people to be so optimistic? I guess it's not an inflation thing as you say dollar goes up.

You seem to imply this crisis ends quickly.

give me ten bucks for ever massive rally that luke's called in the past 14 months and i'd retire.

zoog
02-26-09, 12:12 AM
Lukester,

Could you expand more on your call.

How high and long is this moon shot?

What convinces people to be so optimistic? I guess it's not an inflation thing as you say dollar goes up.

You seem to imply this crisis ends quickly.

You've somehow missed his countless posts on the topic in numerous threads?:confused:


I think there is an even chance that a significant stock bull market in the US INDEXES kicks off in the next 18 months....

...I think it's gonna blow sky high. 28000 dow within 60 months and a stubbornly strong USD...


IMO - the advice to be owning some best of breed blue chip stocks at these beaten down levels is by no means clearly a crappy idea. There are one or two highly reputable analysts calling for a historic bull market up ahead in the US indexes. Kickoff date is uncertain, but the window they are suggesting is within 24 months at the very outside, and likely a lot sooner than that...


...I believe we are in for a period of several years of amazingly persistent USD strength as we observe a progressive disintegration of multiple currencies worldwide. This is one area where iTulip's exceedingly rational assessment may be kept waiting for longer than they project...

We're all waiting with baited breath to see if he's right or not.;) What if he is?:eek::D

Jim Nickerson
02-26-09, 12:26 AM
You've somehow missed his countless posts on the topic in numerous threads?:confused:

We're all waiting with baited breath to see if he's right or not.;) What if he is?:eek::D

What kind of bait are you using for your breath?

zoog
02-26-09, 12:38 AM
What kind of bait are you using for your breath?

lol... nightcrawlers (http://en.wikipedia.org/wiki/Nightcrawlers), of course. Yum.:D Oops I meant [a]bated.

raja
02-26-09, 12:45 AM
On the other hand, readers who are expecting a Mad Max world need to get a grip and re-read Are You a Doomer? (http://www.itulip.com/forums/showthread.php?p=11355#post11355) Law abiding citizens do not turn into criminals overnight. Your town will not be run by warloards. There will be no wandering hoards of looters or ox-drawn Rolls Royces. That's Y2K stuff. Try to keep it in perspective, folks. Everything is going to get really, really slow for a while.
There are many gradations between "really slow" and Mad Max, and I think we're going to end up somewhere between these two.

IMO, "really slow" is too optimistic.
What about all the retirees who've already lost half their retirement nest eggs. You know they're going to lose a lot more. This means government ration cards for food and energy. These people won't call that "really slow".

And there are going to be a lot of formerly law-abiding citizens without enough for food that will start robbing those they perceive as more well off.

We're going to buy a watch dog . . . in fact, two of them.
My Ukrainian wife has lots of experience with what happens when poverty hits, and she says the criminals will poison the first dog, so you need to keep a second around the back. Her father in Ukraine has nine . . . and I can assure you they are nasty. :eek:

ASH
02-26-09, 12:51 AM
You've somehow missed his countless posts on the topic in numerous threads?:confused:

We're all waiting with baited breath to see if he's right or not.;) What if he is?:eek::D

I've been trying to keep score, a little.

This (http://www.itulip.com/forums/showthread.php?p=58910#poststop) is from November 4th...


Look for a modest 2 month rally starting either now or shortly, and then as we get into January or February at latest look for another really vicious drop down. If you see the DOW breaking below it's 2002 lows, you'll know also that GANN GLOBAL has warned that that is the flag for a much bigger fall. Regardless, he places the probability of another very large leg down as *very high*.

...

At any rate if we see a market collapse into a second leg down in January / February we'll know that these "mere technicians" - Robert McHugh and GANN GLOBAL's James Flanagan, are doing a solid job as they purportedly have done for many years.

At the time, I asked...


So, if a major second leg down fails to materialize in 2-3 months, will you regard these refined technical methods as being discredited?

Lukester said yes, but as we see, the DJIA did break through its 2002 lows before the end of February.

This is just one data point... and I note that at the time, a big drop in January/February was supposed to flag a much bigger fall -- not presage a big run up. But still, I have to admit that the one time I was following closely, the scenario Lukester was predicting transpired in the time frame predicted.

Contemptuous
02-26-09, 12:52 AM
:D:D You two are a real coupla 'toons. Just you wait. I'm gonna be tweaking you about this.


lol... nightcrawlers (http://en.wikipedia.org/wiki/Nightcrawlers), of course. Yum.:D Oops I meant [a]bated.


What kind of bait are you using for your breath?

Jim Nickerson
02-26-09, 01:07 AM
lol... nightcrawlers (http://en.wikipedia.org/wiki/Nightcrawlers), of course. Yum.:D Oops I meant [a]bated.

This is about as interesting as much other stuff here from time to time.

Waiting with bated breath is much different than waiting with abated breath. The latter wouldn't make it to the denouement unless it was imminently upon us.

kartius919
02-26-09, 01:21 AM
The problem I think others are having is that a massive run-up in stocks would require hyperinflation. Unemployment is rising with no real bottom in sight. Thus less consumption and lower profits for many of the service sector, which there are many. So in real terms, most are expecting a decline in stock prices. However, in nominal terms, no one doubts the possibility of a large run up. I just can't fathom a scenario in which we have actual real growth. There is too much excess global supply of manufactured goods and insufficient global demand due to low global wages. The key driver I think would be oil and agriculture so might be best to keep a close eye on those commodities.

c1ue
02-26-09, 03:14 AM
My Ukrainian wife has lots of experience with what happens when poverty hits, and she says the criminals will poison the first dog, so you need to keep a second around the back. Her father in Ukraine has nine . . . and I can assure you they are nasty.

Raja,

Your wife should take the dogs to security training. Among other things, security dogs are trained to never eat anything except given by hand from their responsible parties.

Just being vicious doesn't mean anything.

Spartacus
02-26-09, 03:51 AM
Raja,

Your wife should take the dogs to security training. Among other things, security dogs are trained to never eat anything except given by hand from their responsible parties.

Just being vicious doesn't mean anything.

I was under the impression that once a dog is well trained for security it's on a hair trigger.

I forget where I read it, must have been one of the Loompanics books I got in high school but supposedly on military bases there is one group that always has their weapons loaded and "ready just in case", the dog handlers

mfyahya
02-26-09, 04:19 AM
I'm getting confused with the time line mentioned here:


Law abiding citizens do not turn into criminals overnight. Your town will not be run by warlords. There will be no wandering hoards of looters or ox-drawn Rolls Royces. That's Y2K stuff. Try to keep it in perspective, folks. Everything is going to get really, really slow for a while.

with this from the final stretch (http://www.itulip.com/forums/showthread.php?p=78579#post78579) post:


History teaches us that adjustments to imbalances can be sudden and brutal, and we think it imprudent to bet that the mother of all international payments imbalances -- between the US and the rest of the world -- will be the exception.
The rise of gold from $260 to $700 in six years followed by an increase from $700 to $1000 in two years may be quickly followed by a rise from $1,000 to $5,000 in just a few months.

Doesn't gold at $5000 in a short while imply massive unemployment, empty store shelves etc? I don't mean things would go to MadMax levels but maybe the standard of live could rapidly go closer to third world levels, which is very unpleasant for those not used to it.

c1ue
02-26-09, 07:57 AM
I was under the impression that once a dog is well trained for security it's on a hair trigger.


Spartacus,

Security and viciousness are not synonymous.

If the goal is protection, the dog needs to be trained so that it won't be distracted from what it is intended to protect.

If on the other hand the goal is intimidation, then an angry snarling dog is just fine.

Police dogs like K9, for example, are not intended for use as security.

Their most common use is intimidation and/or subjugation.

As another example - one security tactic used is to train the dog to bark only under certain circumstances. The idea is to not allow potential intruders to gauge the number and position of canine security by provoking a reaction before actual intrusion.

Slimprofits
02-26-09, 08:53 AM
I'm getting confused with the time line mentioned here:

with this from the final stretch (http://www.itulip.com/forums/showthread.php?p=78579#post78579) post:

Doesn't gold at $5000 in a short while imply massive unemployment, empty store shelves etc? I don't mean things would go to MadMax levels but maybe the standard of live could rapidly go closer to third world levels, which is very unpleasant for those not used to it.

Agreed on the confusion.

metalman
02-26-09, 11:54 AM
Agreed on the confusion.

the message... tone down the guns 'n gold and survivalist talk we tend toward here every time ej posts a warning.

gold to $5000 and a crashed economy does not mean this...

http://moinansari.files.wordpress.com/2008/10/mad_max.jpg

it means this...

http://www.itulip.com/images/roadtoruin.jpg

think of all the sleep towns you've ever driven through on your way through busy suburbs and between cities. now imagine busy suburbs and the cities sleepy like the sleepy towns. no much going on. run down.

yep, high crime areas will expand. if you live near one, can you expect a widening circle of crime? yes. does that mean buy guns and build a perimeter fence around your house and create a private 'green zone'? well... that's one approach. personally, i'd move.

seanm123
02-26-09, 12:53 PM
Been to the motor city lately?

Putting faith in a Bible -- and a gun

Charlie LeDuff / The Detroit News

DETROIT -- Paulette Bouyer is a member of a peculiar little sorority in this city; a church lady who keeps a loaded pistol.
Once a rabid booster of living in Detroit, Bouyer's home was broken into in broad daylight two weeks ago. The interlopers even made it through the iron gate that covers the door. Now, Bouyer says, she is so afraid, she is prepared to break the Sixth Commandment -- thou shall not kill -- by virtue of her Second Amendment right to bear arms.
"If I could get a covered wagon and a mule and a piggybank, I'd get up and ride out of here tonight," she said. "Because if somebody walks through my door uninvited, somebody else is going to have to carry him out. Is that any way to live?"

She spends her days locked in her house of bars on Greenview Street on the city's west side. She watches the street suspiciously through a peephole covered by the metal security gate. In her window facing the street is a Bible opened to the book of Job.
Bouyer said she wishes to leave today. But she cannot leave today or tomorrow or next week. Who would buy her small three-bedroom bungalow?
"It's worthless," she said. "I can't get out."
It is a sentiment that stretches far across the metro region, from Sterling Heights to Warren to Redford. People trapped on an economic roller coaster, unsure where the bottom is, stuck in a declining neighborhood, chained to an aging house worth less than they owe.
Bouyer's neighborhood was one of those coherent places that city boosters liked to point to as a wholesome, functioning district where good people lived and children thrived. But the decline has come sharply and swiftly, people like Bouyer say.
The home next door to Bouyer's is boarded up. The house next to that is a charred ruin. The home across the street a victim of foreclosure. There are six houses on the block in similar disrepair. At the bottom of neighborhood on Seven Mile squats the abandoned Arnold Nursing Home, a hulking eyesore in the Greek revival style that has no windows and a sagging pediment. It has proven to be the millstone that has pulled the once thriving neighborhood down. At the top of Greenview Street on Eight Mile the story is the same: strip clubs and empty storefronts where small businesses once prospered. A student was recently shot and killed in a drive-by at nearby Henry Ford High School.
"I loved this city and I committed my life and my money to it," Bouyer said, on her way to cast her vote for mayor Tuesday. She is a brassy and well-put together woman, a 61-year-old grandmother with swollen joints and sensible shoes. She is prone to charming little turns of phrase such as "fantabulous." She keeps a neat home with cream carpets, a Bible on the table and the six-shooter next to that. Bouyer is president of her block association, a single mother who put two boys through college while working on the factory floor at Fisher Body.
When she bought her home 23 years ago, hers was a thriving, integrated community, she said. People kept their lawns cut. Children were in by dark. The future seemed bright. Then the future arrived.
"This neighborhood has become a desert of nomads," said Bouyer, a native Detroiter. "Older people take their garbage out once a week and lock themselves back in. People are moving out and it seems like nobody cares."
Bouyer committed her life to Detroit, preferring to see the glass half-full. She endured the bad times: the riot of 1967, the murder of her husband in 1977, the crack epidemic of the '80s and '90s, the blight of the abandoned nursing home in 2002, the drug addicts who moved into the foreclosed house next to hers in the middle of the night along with their children. The wild nights ensued. The loud music. The liquor in paper bags. The strange men.
But two weeks ago, while she was away at the store in the middle of the day, somebody pried through the bars and kicked the front door in. For whatever reason, they made off with nothing. But they had unlocked the windows, perhaps to return at another hour.
"I told her to get out, just walk away," said her son Chris, who lives in another state. "It's not normal that a church lady needs to be packing to go to church."
Bouyer cast a cynical vote for mayor at the Calvary Presbyterian Church at 10:30 a.m. on Tuesday. By that time, just 16 others had voted.
"People have given up," said Johnnie Wilford, a friend of Bouyer's and a member of her church sorority. "We've been forgotten out here."
Felix Seay said as much: "I'd sell my house and leave to another state if I could."
Even Pastor Kevin Johnson said he sometimes fantasized about acquiring his own handgun to stop the thieves from robbing his church. But the problem is much bigger than that, he said.
"With the decline of the middle class, the lack of jobs and the schools deteriorating, it is a perfect storm and we are in the eye of the hurricane," he said. "One day I'm getting out of here too, Lord willing."
Bouyer's choice for mayor did not place in the top two of Tuesday's primary. Even so, she said she would be willing to stay in Detroit with a few provisos.
"I want to see the police," she said. "I want to see the abandoned buildings torn down. I want to see something for these kids. That's not too much to ask, is it? To do right? Is that too much to ask?"


http://www.detnews.com/apps/pbcs.dll/article?AID=/20090226/METRO08/902260402
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zoog
02-26-09, 01:07 PM
the message... tone down the guns 'n gold and survivalist talk we tend toward here every time ej posts a warning.

gold to $5000 and a crashed economy does not mean this...



it means this...



think of all the sleep towns you've ever driven through on your way through busy suburbs and between cities. now imagine busy suburbs and the cities sleepy like the sleepy towns. no much going on. run down.

yep, high crime areas will expand. if you live near one, can you expect a widening circle of crime? yes. does that mean buy guns and build a perimeter fence around your house and create a private 'green zone'? well... that's one approach. personally, i'd move.

That's what I did.:cool: As long as you are living anywhere near relative concentrations of people, I would expect crime to increase. But placing yourself in an area with relatively less crime to start with would be an advantage, and would probably minimize the level of "fortressing" necessary.

cjppjc
02-26-09, 01:28 PM
DETROIT -- Paulette Bouyer is a member of a peculiar little sorority in this city; a church lady who keeps a loaded pistol.

That's one lady you would like to meet. To be in the presence of her strength of character and her obvious determination.

goadam1
02-26-09, 02:21 PM
Wait, one day you are saying maybe we should buy booze to barter with and the next you are calling us doomers.

goadam1
02-26-09, 02:22 PM
In the previous article EJ said we wouldn't repeat Japan. Are you implying we will or saying it is a boring analogy.

metalman
02-26-09, 02:28 PM
In the previous article EJ said we wouldn't repeat Japan. Are you implying we will or saying it is a boring analogy.

mucho road between japan and mad max... er... with burned out cars strewn all over it! :)

http://scrapetv.com/News/News%20Pages/Politics/Images/burned-out-car.jpg

goadam1
02-26-09, 02:33 PM
Honestly, your last article was road to ruin and this article telling us to cheer up tells us we are broken down in the middle of nowhere with no food or water. What the hell should I think?

goadam1
02-26-09, 02:35 PM
funny but disturbing. Anyway, mad max is when we run out of oil and soylent green is when we eat each other. I think we will still get to those places but not yet.

phirang
02-26-09, 02:35 PM
AIG is getting its CDS' backstopped by all the J6P US posters here.

Nice, eh?

EJ, how's Obongo working out for you so far? Has he given enough wealth away to the bankers for your liking?

I recall being banned for cynically dismissing EJ's adulation of Obama, and unfortunately history has ALREADY vindicated me.

goadam1
02-26-09, 02:37 PM
The problem is we actually are FOLLOWING you. You are a beacon. You are a leader. So we take everything you say VERY seriously when you talk about stuff that implies trading kidneys for kidney pies.

goadam1
02-26-09, 02:39 PM
Yeah, being right is so important right now. "I told you the plane would hit the mountains, too bad we are dead."

cjppjc
02-26-09, 02:50 PM
Honestly, your last article was road to ruin and this article telling us to cheer up tells us we are broken down in the middle of nowhere with no food or water. What the hell should I think?

I don't think you need to take the funny analogy EJ made so literely. It was funny that's all. Everything doesn't need to have a deeper meaning.

simitpatel
02-26-09, 02:51 PM
Wait, one day you are saying maybe we should buy booze to barter with and the next you are calling us doomers.

lol, i was thinking the same thing. :)

i took the itulip doomer test, and by that standard i am not a doomer. however i think the test may need to be revised as i do consider myself a doomer. here is my simple three question doomer test:

1. i have 12 months of storable food, water filters, and plan on buying a firearm. while i am not a wealthy person i did not break the bank to make these purchases. i live a simple and boring life. am i doomer?

2. argentina in 2001, or hyperinflation in general. doomer scenario? do you think it can happen here in USA?

3. new world order-istas. doomers?

i think if you're three for three on that test, you're a doomer. i dont live in fear and am at approx 41% in gold/silver (should be noted that i am not wealthy like i said and thus do not have the "i have so much money where do i put it all" type of issues....if i was i'd probably be less in precious metals).

also, EJ's point of there being thousands of years of human history to support his non-doomer stance is a good argument in my opinion, though let us remember a few things that have happened over the past few thousand years:

1. nazi germany, rise of hitler. i am talking about auschwitz type stuff, not weimar hyperinflation (though that is pretty doom-ish by my standards as well)
2. argentina in 2001/2002. i've heard some stories from folks who lived through that. seems pretty doom-ish to me, and so i dont see how hyperinflation isn't a doomer scenario.
3. present-day iraq

while there are plenty of things to celebrate -- technology, the Internet, greater tolerance of cultural diversity, etc -- i would argue that doomer scenarios do happen. and if it happened before, it can happen again, as history repeats -- doubly so when folks remain unaware that it is happening (like what we're in now).

IMO, there's irrational doomers -- folks who base their who lives around doom -- and more rational doomers, who take precautions that would be considered doomer by others.

goadam1
02-26-09, 02:56 PM
I get the humor around here. But saying I hope you are all prepared for hyperinflation and visit bulliounvault.com for all you end of money needs, kind of gets my blood going.

cjppjc
02-26-09, 02:56 PM
AIG is getting its CDS' backstopped by all the J6P US posters here.




What does that mean?

Basil
02-26-09, 03:07 PM
give me ten bucks for ever massive rally that luke's called in the past 14 months and i'd retire.

Add another ten for every collapse of Gold he has called and you would be very wealthy.

goadam1
02-26-09, 03:15 PM
I am a rational doomer. I run a business. I employ people. I make business decisions. I send my kids to school and brush their teeth. It is one thing when you start on a site and use it to get the idea to get out of stocks and protect your wealth and another when people I have grown to respect start making calls about wether it will look like Argentina 2001 or Germany 1938. So I need to make rational choices about how far to go and how much to prepare. I have no debt. I am running my life and business on zero debt. I assumed the world wasn't ending. But for me talking about Weimar Germany and losing all my wealth to inflation is like talking to a hypochondriac about cancer viruses.

a warren
02-26-09, 04:00 PM
Why isnt anyone talking about guns? Wat are ya? Girls?

goadam1
02-26-09, 04:03 PM
bang. you're dead. Now get serious, we are in the middle of nowhere with no water. Go...

Slimprofits
02-26-09, 04:20 PM
the message... tone down the guns 'n gold and survivalist talk we tend toward here every time ej posts a warning.

gold to $5000 and a crashed economy does not mean this...

http://moinansari.files.wordpress.com/2008/10/mad_max.jpg

it means this...

http://www.itulip.com/images/roadtoruin.jpg

think of all the sleep towns you've ever driven through on your way through busy suburbs and between cities. now imagine busy suburbs and the cities sleepy like the sleepy towns. no much going on. run down.

yep, high crime areas will expand. if you live near one, can you expect a widening circle of crime? yes. does that mean buy guns and build a perimeter fence around your house and create a private 'green zone'? well... that's one approach. personally, i'd move.

I'm not in the "green zone" crowd (is there one?), but like some others, am having a hard time imagining sleepy versions of the cities that I know. Busy suburbs are another story... Cities with lots of people that live in small apartments, or worse, are not going to be quiet. I'll be hanging in the 'burbs.

Contemptuous
02-26-09, 04:23 PM
Why isnt anyone talking about guns? Wat are ya? Girls?

AWarren - I may be putting words into his mouth, but (I think) EJ's saying that kind of chatter is a bit silly. Our country can wind up in serious, really serious trouble and our employment can go up in a puff of smoke, without the people sliding into a "guns drawn" state of siege across America. Guns and survivalist topics are the least inquiring topic to examine relative to what's coming. If that's indeed what EJ's saying I agree with it 100%.

Such chatter becomes like an echo chamber and feeds it's participants anxieties in a steady build up until the theme is considered practically self-evident. It builds in volume until these pages just read like a silly-fest to new members coming in and browsing this stuff for the first time. There is all kinds of unholy destruction that can be visited upon our economy and it will still be far short of the survivalist / guns / frozen food and flashlights scenarios. I have not participated in any of that talk because frankly I find it silly. IMO it dumbs these pages down.

Respectfully.

rabot10
02-26-09, 04:29 PM
For what it's worth, what I got out of this cryptic, short article was that I need to add a portable GPS to my list of supplies. May be the only way to find my way home. Thanks.

phirang
02-26-09, 04:29 PM
What does that mean?

You future taxes are going to people worth 8-10 digits who shorted J6P's subprime mortgage.

Slimprofits
02-26-09, 04:33 PM
What does that mean?

http://blogs.barrons.com/stockstowatchtoday/2009/02/26/aig-to-get-government-protection-in-300-billion-of-cds/

flintlock
02-26-09, 04:45 PM
Big difference between Mad Max and having some guns and food stored away. Having gun/ammo doesn't mean you expect to be blazing away at gang members as they come through the wire. It could be a simple deterrent to the local home invasion crew, a perceived sense of security, whatever. Worst case you sell them for a profit.

Spending a tiny fraction of your net worth on some basic supplies to carry you over in a pinch doesn't sound Mad Max to me. Anyone remember the gas shortages last year in the Southeast US? That minor interruption of supply caused hoarding which further added to the problem. Could we not have a similar interruption in some other necessity? Food, water, electricity, gas to heat our homes? I think having supplies on hand for a short term interruption of supply to be a prudent decision. Total self sufficiency, while not a bad idea, is probably not necessary.

But I do think we could see a slowing of efficiency in our ability to transport supplies and deliver utilities in a hyperinflation scenario. How do you price transportation when fuel cost is rising 20% a day? Bound to be some chaos in that regard. Trucker strikes, stuff like that. A little forethought now could pay big dividends when the stores are empty and the baby is hungry.

goadam1
02-26-09, 04:47 PM
I haven't jumped on that chatter either. But "booze for barter" is kind of a freak out statement. So is it "booze for barter" world coming at us?

Masher
02-26-09, 05:00 PM
I haven't jumped on that chatter either. But "booze for barter" is kind of a freak out statement. So is it "booze for barter" world coming at us?

That's what Shadowstats guy is talking about on national TV. Whiskey, man!

cjppjc
02-26-09, 05:00 PM
http://blogs.barrons.com/stockstowatchtoday/2009/02/26/aig-to-get-government-protection-in-300-billion-of-cds/

Well that kind of figured. 300 billion here. 200 billion there. 450 billion here. 80 billion there. But what does this mean.

J6P US posters

Contemptuous
02-26-09, 05:01 PM
My understanding is: EJ or John Williams can mention in passing that something like booze for barter is a hypothetical, but that does not mean everyone has to immediately incorporate it as an absolutely assured outcome. Such assumptions feed on themselves and within a couple of days there are so many antecedent posts mentioning it that it becomes percieved as the "likeliest outcome".

Awarren - no offense intended guy. I personally don't have anything against accumulating survival gear, nor it's use. Merely suggesting that we keep a sense of how "probable" its' eventual use might be. I guess I trod on your toes with the above rejoinder, and I sincerely apologize.


I haven't jumped on that chatter either. But "booze for barter" is kind of a freak out statement. So is it "booze for barter" world coming at us?

Masher
02-26-09, 05:01 PM
Wait, one day you are saying maybe we should buy booze to barter with and the next you are calling us doomers.

He never says booze for barter. Where does he say booze for barter?

Slimprofits
02-26-09, 05:09 PM
Anyone remember the gas shortages last year in the Southeast US? That minor interruption of supply caused hoarding which further added to the problem. Could we not have a similar interruption in some other necessity? Food, water, electricity, gas to heat our homes?

Or the ice-storms in Massachusetts that caused severe power outages a few weeks ago? The flooding in Kentucky? etc. etc. etc. etc. I'm not a doomer, I'm a realist.


But I do think we could see a slowing of efficiency in our ability to transport supplies and deliver utilities in a hyperinflation scenario. How do you price transportation when fuel cost is rising 20% a day? Bound to be some chaos in that regard. Trucker strikes, stuff like that. A little forethought now could pay big dividends when the stores are empty and the baby is hungry.

Concur 100%.

SuitablyIronic
02-26-09, 05:10 PM
Fred - I've now got this comment archived. I think it may come back to haunt you in 12-18 months. There is a stock market explosion - or moonshot, however we want to call it - up ahead not too far away, which iTulip will then have to re-incorporate into their thesis, and that may be a bit awkward given the unequivocal prognosis below to the contrary. USD set to bust out on the upside soon now is my view and can rise into the mid-90's this time. Stock market after the completion of this meltdown can be like dry tinder doused in gasoline (when torched, it goes up, a lot).
Moonshot: (Definition) An exercise where an enormous amount of government money is spent to show that we have bigger balls than the rest of the world.

End result: A few photos and some grey dirt in a jar. Ultimately futile.

I think that there is definitely going to be a moonshot in the near future, you read it here first on iTulip!

Slimprofits
02-26-09, 05:10 PM
Well that kind of figured. 300 billion here. 200 billion there. 450 billion here. 80 billion there. But what does this mean.

J6P US posters

"Joe Six Pack Americans that post on itulip.com"

Masher
02-26-09, 05:14 PM
If you are new here or don't stop by often, all this guns and gold and food and water talk is weird for a finance and economics site, even one that is forecasting a depression with high inflation. EJ trying to get folks "back on topic"?

cjppjc
02-26-09, 05:14 PM
"Joe Six Pack Americans that post on itulip.com"

Thank you. Makes sense now.

Isn't some of the risk taking being wiped out. I mean when you make a bet. (Oh, I'm sorry a hedge.) Isn't part of the bet who your betting with. Bookies never cover their street guys bad decisions on counter party risk. If I don't pay my bookie, he is on the hook to his organization for the money.

I believe it was Jim Grant who asked:

What do you call capitalism without the risk of finacial failure?
Socialism for the rich.

Prazak
02-26-09, 05:51 PM
Perhaps there are better places for doomer-gloomer types to congregate than a site given over to macro-financial commentary. But when you stumble across a group of intelligent people and many of them happen to share your views and are planning accordingly it's natural to want to compare notes.

If you live in one of the cities that have been struck by one of the awful terrorist attacks, or that are on the well-known target list of nihilistic jihadis, you may possess a certain additional existential dread. It's highly unlikely that any of the thousands or so people who are determined to do wholesale violence to this place will actually succeed. Because the counter-terrorism authorities are so very competent. Right? In the meantime, isn't it prudent to plan an emergency exit, in case of one of those nightmare scenarios ever comes to pass -- especially if you are a parent with responsibility over young lives?

Now throw in thoughts of Peak Oil. I'm no geologist or oil man, but there are lots of persuasive well-researched cases out there laying out a pretty troubling scenario fifteen years out or so. Even the IEA tip-toed in that direction a couple months ago. Maybe after the glaciers melt away we'll find vast new stores of oil in Greenland. Maybe Obama's great leap forward in green industry will find new ways to light up the grid. Maybe not.

If preparing for these scenarios, even if they are not likely, makes me foolish, so be it. Just don't come asking for food if TSHTF.

Masher
02-26-09, 05:58 PM
Perhaps there are better places for doomer-gloomer types to congregate than a site given over to macro-financial commentary. But when you stumble across a group of intelligent people and many of them happen to share your views and are planning accordingly it's natural to want to compare notes.

If you live in one of the cities that have been struck by one of the awful terrorist attacks, or that are on the well-known target list of nihilistic jihadis, you may possess an existential dread. It's highly unlikely that any of the thousands or so people who are determined to do violence to this place en masse will actually succeed. Because the counter-terrorism authorities are so very competent. Right? In the meantime, isn't it prudent to plan an emergency exit, in case of one of those nightmare scenarios ever comes to pass -- especially if you are a parent with responsibility over young lives?

Now throw in thoughts of Peak Oil. Lots of persuasive well-researched cases out there that lay out a pretty troubling scenario fifteen years out or so. Even the IEA tip-toed in that direction a couple months ago. Maybe after the glaciers melt away we'll find vast new stores of oil in Greenland. Maybe Obama's great leap forward in green industry will find new ways to light up the grid. Maybe not.

If preparing for these scenarios, even if they are not likely, makes me foolish, so be it. Just don't come asking for food if TSHTF.

Certainly, but what do people actually do under these conditions? Do they run into their homes and hide with their Glocks and shotguns? Do they form neighborhood groups for security? Do they help each other out and pool resources such as food? Isn't this worthy of discussion? Why always right to guns and food storage?

a warren
02-26-09, 06:05 PM
Luke. My sarcasm was not clear. Here in NZ there was a recent 60 minutes documentary showing the three of four neo-nazis doing their survivalist training. They drove thier Hi lux into a river & got it stuck, then ran around with cammo gear hiding behind bushes. I think they had bb guns. Those that noticed laughed at them. My comment was aimed at the itulipers who seem to think guns will solve their problems. I think they are just deluded. Like that guy in Apocalypse Now with the fancy habits.



Awarren - no offense intended guy. I personally don't have anything against accumulating survival gear, nor it's use. Merely suggesting that we keep a sense of how "probable" its' eventual use might be. I guess I trod on your toes with the above rejoinder, and I sincerely apologize.

Prazak
02-26-09, 06:26 PM
Certainly, but what do people actually do under these conditions? Do they run into their homes and hide with their Glocks and shotguns? Do they form neighborhood groups for security? Do they help each other out and pool resources such as food? Isn't this worthy of discussion? Why always right to guns and food storage?

Sorry, I didn't mean to sound as if I were going right to guns and food storage. Just trying to defend the principle of reasoned doomerism.

ASH
02-26-09, 06:31 PM
My understanding is: EJ or John Williams can mention in passing that something like booze for barter is a hypothetical, but that does not mean everyone has to immediately incorporate it as an absolutely assured outcome. Such assumptions feed on themselves and within a couple of days there are so many antecedent posts mentioning it that it becomes percieved as the "likeliest outcome".

Speaking as an offender (http://www.itulip.com/forums/showthread.php?p=78714#poststop), I agree with your point. However, I think a rational approach to risk management requires consideration of low probability outcomes. Your policy should align with the likeliest outcome, but your planning should include unlikely outcomes. That is, after all, why we have insurance. And like insurance, it makes sense to pay a low premium to prepare to survive an improbable, but catastrophic, outcome. It makes no sense to pay a high premium to insure against a very unlikely event, but so far I've mainly read (and written) contingency planning. Stockpiling some food is not a big deal; there's a world of difference between that and selling all your belongings, leaving your city job, and starting a beet farm in some dusty corner of Idaho to wait out the apocalypse.

Unfortunately, the rhetorical and psychological hazards are exactly as you depict -- the more you fear something, and the more you talk about it and imagine it, the more likely it seems. That means a legitimate discussion of low-probability outcomes, imagined in sufficient detail for planning, has the negative consequence of distorting the perceived risk. That is human nature, but it does not make such exercises illegitimate. (My wife recently read a book about the misperception of risk called The Science of Fear: Why We Fear The Things We Shouldn't and Put Ourselves in Greater Danger (http://www.amazon.com/Science-Fear-Shouldnt-Ourselves-Greater/dp/0525950621), which got me thinking along these lines.)

I know the comments regarding Mad Max posts aren't "all about me", but I do feel compelled to justify what I've written. Worrying about rising crime and the security of your person and property in an economic depression is legitimate. Worrying about what types of assets the state is going to tax most heavily in this scenario is legitimate. And farming? Well shit -- on the plane ride out to Orlando this week, I sat next to a very nice grey-haired old lady who grew up during the Great Depression. How did her family make ends meet? By farming. If I lose my job in a hyperinflationary depression that lasts for years, should I (a) stay where I am in the suburbs and subsist off whatever the state is able to provide me, or (b) try to raise what I need myself? Sure, most likely people won't starve, but I bet you those who are out of work but can raise their own food will eat a good deal better than those who can't. Having a plan for short-term civil disorder, the interruption of utilities, personal security, and eating well while unemployed shouldn't be tarred with the Mad Max brush. And frankly, even planning for Mad Max is legitimate, as long as one doesn't take action that is incommensurate with the probability. I admit I did indulge (http://www.itulip.com/forums/showthread.php?p=75635#poststop) in consideration of a true Mad Max scenario awhile back, but that was mainly in the context of pointing out how challenging (http://www.itulip.com/forums/showthread.php?p=75835#poststop) security would truly be in such a scenario. Perhaps that was a bridge too far, but I thought the aspiration to live in security as an isolated family unit needed to be examined.

Anyway, I see worst case contingency planning as being legitimate, so long as everybody keeps in mind what the relative probabilities are. That said, I also recognize that consideration of such scenarios is distracting. Maybe this, too, needs to be buried off the front page in its own separate forum?

goadam1
02-26-09, 06:38 PM
there is a big difference in preparing for a stock market crash, a 50% drop in revenue, inflation and 12% unemployment or 20% unemployment and 40% inflation. I live in New York City and I think 20% unemployment and hyperinflation might not look like mad max but it will be pretty scary. So yeah, I go from concerned business owner and investor to thinking about home security, how safe the streets will be and what my exit plan should be.

ThePythonicCow
02-26-09, 08:36 PM
... selling all your belongings, leaving your city job, and starting a beet farm in some dusty corner of Idaho ...Security, like real estate and politics, is local. The person in a long stable small mid-western town will have quite different security risks than a person in New Orleans or Detroit.

Things will change, and they will change differently for each of us depending on our neighborhood, as well as on our individual abilities and vulnerabilities.

The collapse of some of the world wide FIRE economy will accentuate local and regional differences. We routinely see this in natural disasters, where the reaction of the populace and the variety of risks subsequently imposed on them diverges greatly by neighborhood and town. Contrast the reactions of some Mississippi towns with that of the lower elevation portions of New Orleans to Katrina.

That's why I moved from Silicon Valley to North Texas. The economic model of Silicon Valley that had enriched me for the last 30 years no longer felt as safe to me as that of areas such as North Texas.

Depending on where you live, the answer might be get the heck out, even if you have to do so at considerable cost. That doesn't necessarily mean raising beets in Idaho; there are a million ways to get out of the big city.

metalman
02-26-09, 08:46 PM
Fred - I've now got this comment archived. I think it may come back to haunt you in 12-18 months. There is a stock market explosion - or moonshot, however we want to call it - up ahead not too far away, which iTulip will then have to re-incorporate into their thesis, and that may be a bit awkward given the unequivocal prognosis below to the contrary. USD set to bust out on the upside soon now is my view and can rise into the mid-90's this time. Stock market after the completion of this meltdown can be like dry tinder doused in gasoline (when torched, it goes up, a lot).

so ridiculous. no one is doubting there is gonna be some kind of big rally, but no one can say when.... certainly not you. you've been calling for one for months. itulip ain't about speculating on unpredictable things. wrong site, luke.

tombat1913
02-26-09, 09:19 PM
Perhaps there are better places for doomer-gloomer types to congregate than a site given over to macro-financial commentary. But when you stumble across a group of intelligent people and many of them happen to share your views and are planning accordingly it's natural to want to compare notes.

If you live in one of the cities that have been struck by one of the awful terrorist attacks, or that are on the well-known target list of nihilistic jihadis, you may possess a certain additional existential dread. It's highly unlikely that any of the thousands or so people who are determined to do wholesale violence to this place will actually succeed. Because the counter-terrorism authorities are so very competent. Right? In the meantime, isn't it prudent to plan an emergency exit, in case of one of those nightmare scenarios ever comes to pass -- especially if you are a parent with responsibility over young lives?

Now throw in thoughts of Peak Oil. I'm no geologist or oil man, but there are lots of persuasive well-researched cases out there laying out a pretty troubling scenario fifteen years out or so. Even the IEA tip-toed in that direction a couple months ago. Maybe after the glaciers melt away we'll find vast new stores of oil in Greenland. Maybe Obama's great leap forward in green industry will find new ways to light up the grid. Maybe not.

If preparing for these scenarios, even if they are not likely, makes me foolish, so be it. Just don't come asking for food if TSHTF.
In light of prior disagreements I just want to take this opportunity to say that this is something we can absolutely agree upon, all of it. Cheers

simitpatel
02-26-09, 11:11 PM
Certainly, but what do people actually do under these conditions? Do they run into their homes and hide with their Glocks and shotguns? Do they form neighborhood groups for security? Do they help each other out and pool resources such as food? Isn't this worthy of discussion? Why always right to guns and food storage?

when i jumped on the rational doomer bandwagon in 2005, my first approach was to try to make this a discussion topic. i'd present the evidence from multiple angles. i'd talk to anyone who could listen. i became, and still am, politically informed and active.

guess what i found out? no one cares. they don't want to hear it. just check many of the responses in this thread, perhaps even EJ's original post, which curiously followed a coherent thesis for how hyperinflation could play out.

IMO, finding like-minded people in your community is the best bet, assuming it can be done. if it cannot be done, then yes, guns, food, water, and metals. bonus points if you can get off the grid.

as others have noted, i dont recommend building your whole life around doom. i am a big fan of being prepared and taking insurance measures. if you earn a reasonable living and are prudent with expenses, guns and a little bit of food can bring peace of mind at very little cost. how is this different than health insurance? given the nature of insurance companies, medical institutions, and big pharma, i'd argue it's a wiser bet.

the truth is that most people dont like to think about it, even though it doesnt cost much financially, because taking such actions implies unpleasantness about how things could turn out.

zoog
02-26-09, 11:38 PM
Wait, one day you are saying maybe we should buy booze to barter with and the next you are calling us doomers.


He never says booze for barter. Where does he say booze for barter?


My understanding is: EJ or John Williams can mention in passing that something like booze for barter is a hypothetical, but that does not mean everyone has to immediately incorporate it as an absolutely assured outcome. Such assumptions feed on themselves and within a couple of days there are so many antecedent posts mentioning it that it becomes percieved as the "likeliest outcome".

Classic example of this phenomenon which seems to happen around here sometimes. Increasingly so as time goes on, I might add.

In Hyperinflation case revisited - Part One: On the road to hyperinflation. Will we complete the trip? (http://www.itulip.com/forums/showthread.php?p=77759) EJ notes:


...Lately [John] Williams is pressing his followers to double down on gold and stock up on Whiskey for barter, while Sinclair proclaims “this is it” as in “the big one” that the doomers have warned about for decades....

Nowhere in the article is EJ himself saying "you will need whiskey to barter with because the dollar will have collapsed". He merely relates the kinds of statements that John Williams and Jim Sinclair have been making lately.

When in doubt, I always go back and read EJ's essays again. I often find it helpful to re-read them for better understanding anyway.

ASH
02-27-09, 12:40 AM
Nowhere in the article is EJ himself saying "you will need whiskey to barter with because the dollar will have collapsed". He merely relates the kinds of statements that John Williams and Jim Sinclair have been making lately.

When in doubt, I always go back and read EJ's essays again. I often find it helpful to re-read them for better understanding anyway.

Well, he does say:


During the Russian hyperinflation in the early 1990s vodka was the primary item of barter, so his suggestion is not off-the-wall if in fact a US inflation developed to hyperinflation levels.

as well as...


Maybe we simply lack imagination, but we have had a hard time accepting the above dire scenario for the US. If it happens we're all going to need more than a few bottles of whiskey to get through it. It means the end of the US as we know it, both the society and the nation's international standing.

and


As we noted back in 2001, the US is certainly on the road to hyperinflation. Inflation is the policy, the answer to every ill. But the road from inflation to hyperinflation is long, and there are ways to get off.

That sounds to me like an endorsement of alcohol as a potential trade good and an invitation to consider "the end of as we know it" [U]in the event of an honest-to-God hyperinflation. Then there's the statement that we have been on the road to hyperinflation since at least 2001, in EJ's estimation, although such an outcome is not assured. So no, EJ did not tell anyone to go out and buy alcohol as a trade good, or that society will collapse -- he just said that possibly there could be hyperinflation, in which case US society as we know it will come to an end, and alcohol will be of use as a trade good. What, exactly, is your beef with the folks who read this and shat themselves? An asteroid might hit the earth, but EJ doesn't spend his time cataloging all the possible bad things which might happen. That's why his readership sits up and takes notice when he does raise an ugly scenario, even if it's not the most likely outcome. We figure he raised the issue because the danger is realistic enough to bother talking about.

Finally, there's this from the Road to Ruin (http://www.itulip.com/forums/showthread.php?p=78579#post78579) thread:


Our primary concern at this stage is no longer our readers' portfolios but their ability to weather a US dollar crisis if one erupts. In response, we are increasing our gold allocation to 30% and moving all Treasury holdings to the very shortest maturities, to three month Treasury bills, until we see indications that conditions are stabilizing. We encourage you to engage with the community to actively discuss strategies that are appropriate for you.

This is an invitation to discuss measures to weather a US dollar crisis, with respect to things other than our portfolios. Well, if we're not talking about our portfolios, then I guess we're talking about something else. I presume the intended topic was not what will be fashionable to wear in the event of a dollar crisis. The non-financial aspects of preparedness, perhaps?

My point is that although EJ clearly doesn't want iTulip to degenerate into a doomer survivalist website, it is silly to pretend that those writing posts about physical preparedness and personal security misread what he wrote, or that they are flying off on a crazy tangent to the topics he raised. That may not have been what EJ intended -- perhaps there was a problem with the choice of words -- but in this case it's not a simple problem with English reading comprehension on the part of the audience.

bpr
02-27-09, 01:03 AM
Silly me... I stocked up on whisky with no intention of bartering (unless I run out).

Contemptuous
02-27-09, 02:16 AM
Well those LEAP 2020 "global systemic crisis" guys are cranking up the dire tone here. I have not got time to translate this but will do so over the weekend if someone else doesn't first. They are calling for total armageddon. Civil war in a half dozen countries, including and most of all in the USA. We have two hundred million firearms in this country and the most combustible societal disorder according to them.

Geopolitical global dislocation, civil wars, regime changes. These guys are seriously insisting that this is their forecast. Whew!

They say "if you live in one of the primary affected zones, your best option is just to leave". :eek: :rolleyes: The immediate physical danger will be marginal in Europe, but according to them will be a "bonfire" in the US. Thanks a lot guys. We think highly of you also.

They say their synthesis and conclusions are formed by melding the opinions of "many dozens of professionals, politicians, people in the know", etc. Well in fairness, actually a good piece of their forecasting has already worked out, so it might be concluded that their forecasts have not been all that exxaggerated in the past two years.

They go on to opine: Doit-on en conclure que la crise mondiale peut se transformer en guerre mondiale ? "Les pronostics de LEAP sont extrêmes, mais la violence sociale pointe", admet Laurence Boone (http://www.lemonde.fr/sujet/f216/laurence-boone.html), économiste chez Barclays. Saying in effect: "Are we to conclude that this global crisis will transform into a world war?" And replying to this comment they quote Laurence Boone, economist with Barclays who observed: "The prognostications of LEAP2020 are extreme, but the potential for violent social reaction is pointing that way".

Evidently any comments EJ has made in this direction appear exceedingly cautious and conservative in comparison with this stuff. Maybe iTulip have it in mind to send the LEAP2020 people to the "Are You A Doomer" correctional facility for a little reeducation? I must confess LEAP2020 are climbing somewhat out on a limb with these prognostications. Anyway, it seems like a perfect bookend to add to this thread.

All the happy news and forecasting is compliments of "LEAP2020" folks. We doubtless all wish to send them a big "thank you".

Après la crise financière, la guerre civile ? Préparez-vous à "quitter votre région"...

LE MONDE | 26.02.09 | 13h44 • Mis à jour le 26.02.09 | 21h12

La crise économique et financière va-t-elle dégénérer en violentes explosions sociales ? En Europe, aux Etats-Unis ou au Japon, la guerre civile est-elle pour demain ? C'est le pronostic quelque peu affolant que dressent les experts du LEAP/Europe 2020, un groupe de réflexion européen, dans leur dernier bulletin daté de mi-février.

<!--/tpl:contenu/element/ensemble/tpl-esi_sur_le_meme_sujet.html.php--><!--/lyt:lyt-vide.html.php--><!--/inc:/element/ensemble/afficher_esi/1089411.html--><!-- Fin Appel du composant: /element/ensemble/afficher_esi/1089411.html -->
<SCRIPT type=text/javascript>init_boite_meme_sujet = function(){if ( "undefined" != typeof MIA && "undefined" != typeof MIA.Ensemble && ("undefined" == typeof MIA.Ensemble.initEventLoaded || !MIA.Ensemble.initEventLoaded) ){ var ensemble_id_defaut = 1089411; var hash_url = window.location.hash; var re = /^#(.*)ens_id=(\d+)[^\d]*.*$/; var ensemble_id_url = hash_url.replace(re, "$2"); if ( ensemble_id_url && ensemble_id_url != hash_url ) MIA.Ensemble.ensembleId = ensemble_id_url else if ( ensemble_id_defaut ) MIA.Ensemble.ensembleId = ensemble_id_defaut if ( "" != "" ) { MIA.Ensemble.titreBoite = ""; } MIA.Ensemble.initEventLoaded = true; MIA.Ensemble.formaliseBoiteMemeSujet();}}if ( (pave=document.getElementById('pave_meme_sujet_hid den')) ) pave.style.display = 'none';if(window.addEventListener ) window.addEventListener('load', init_boite_meme_sujet, false);else window.attachEvent('onload', init_boite_meme_sujet);</SCRIPT>Dans cette édition où il est question que la crise entre, au quatrième trimestre 2009, dans une phase de "dislocation géopolitique mondiale", les experts prévoient un "sauve-qui-peut généralisé" dans les pays frappés par la crise. Cette débandade se conclurait ensuite par des logiques d'affrontements, autrement dit, par des semi-guerres civiles.

"Si votre pays ou région est une zone où circulent massivement des armes à feu (parmi les grands pays, seuls les Etats-Unis sont dans ce cas), indique le LEAP, alors le meilleur moyen de faire face à la dislocation est de quitter votre région, si cela est possible."

Selon cette association, formée de contributeurs indépendants issus des milieux politiques et économiques et de professionnels européens de différents secteurs, les zones les plus dangereuses sont celles où le système de protection sociale est le plus faible.

La crise serait ainsi à même de susciter de violentes révoltes populaires dont l'intensité serait aggravée par une libre circulation des armes à feu. L'Amérique latine, mais aussi les Etats-Unis sont les zones les plus à risques. "Il y a 200 millions d'armes à feu en circulation aux Etats-Unis, et la violence sociale s'est déjà manifestée via les gangs", rappelle Franck Biancheri (http://www.lemonde.fr/sujet/eef5/franck-biancheri.html), à la tête de l'association. Les experts du LEAP décèlent d'ailleurs déjà des fuites de populations des Etats-Unis vers l'Europe, "où la dangerosité physique directe restera marginale", selon eux.

FAIRE DES RÉSERVES

Au-delà de ces conflits armés, le LEAP alerte sur les risques de pénuries possibles d'énergie, de nourriture, d'eau, dans les régions dépendantes de l'extérieur pour leur approvisionnement et conseille de faire des réserves. Cette perspective apocalyptique pourrait faire sourire si ce groupe de réflexion n'avait, dès février 2006, prédit avec une exactitude troublante le déclenchement et l'enchaînement de la crise.

Il y a trois ans, l'association décrivait ainsi la venue d'une "crise systémique mondiale", initiée par une infection financière globale liée au surendettement américain, suivie de l'effondrement boursier, en particulier en Asie et aux Etats-Unis (de - 50 % à - 20 % en un an), puis de l'éclatement de l'ensemble des bulles immobilières mondiales au Royaume-Uni, en Espagne, en France et dans les pays émergents. Tout cela provoquant une récession en Europe et une "très Grande Dépression (http://www.lemonde.fr/sujet/2d34/grande-depression.html)" aux Etats-Unis.

Doit-on en conclure que la crise mondiale peut se transformer en guerre mondiale ? "Les pronostics de LEAP sont extrêmes, mais la violence sociale pointe", admet Laurence Boone (http://www.lemonde.fr/sujet/f216/laurence-boone.html), économiste chez Barclays.

Reste un espoir, une "dernière chance" selon le LEAP, qui résiderait dans la capacité du G20, qui se réunira le 2 avril à Londres, à arrêter un plan d'action "convaincant et audacieux". Dans ce cas, le monde ne serait toutefois pas tiré d'affaire, puisque les experts ne manquent de rappeler que se profile aussi une sévère crise climatique...

Claire Gatinois


Article paru dans l'édition du 27.02.09. [ I gather this apparently ran in LE MONDE? If so, that's a stunner, because it's pretty outlandish fare for this mainstream newspaper. The freaked out paranoia is going mainstream. ]

Judas
02-27-09, 04:42 AM
Maybe I'm profoundly out of step with modern America, but "doomer" mentality and preparedness isn't some kind of sickness, but a return to normalcy.

As a kid we lived in a regular suburban-style neighborhood, but had a large garden and grew our own veggies that we put up by freezing and canning. We went fishing when the tautog were running and put up plenty of frozen fish. Keeping shotguns in the house and knowing how to use them was commonplace for home defense, and going to shoot trap was fun, along with game dinners. My grandpa gave some krugerrands to my parents for a "backup". Prep for blizzards or power outages or hurricanes was just what you did. Credit cards were for rich people or dire emergencies. Sewing torn clothes or getting shoes fixed was normal. This was the 1970s and early 1980s in New England, not Appalachia in the 1920s.

But somewhere along the way food was something that was served to you in restaurants or came out of a plastic container. Guns, one of our fundamental rights and common cultural artifacts, became scary boogeymen kept by shifty-eyed paranoids and militia members. Cutting up or even paying off credit cards is a sign of extreme distress. Gold? What are you crazy? You FIX things instead of throw them away? What's wrong with you?

Most of the "doomer" prep here is what we used to call "regular life".

Jay
02-27-09, 09:20 AM
Maybe I'm profoundly out of step with modern America, but "doomer" mentality and preparedness isn't some kind of sickness, but a return to normalcy.

As a kid we lived in a regular suburban-style neighborhood, but had a large garden and grew our own veggies that we put up by freezing and canning. We went fishing when the tautog were running and put up plenty of frozen fish. Keeping shotguns in the house and knowing how to use them was commonplace for home defense, and going to shoot trap was fun, along with game dinners. My grandpa gave some krugerrands to my parents for a "backup". Prep for blizzards or power outages or hurricanes was just what you did. Credit cards were for rich people or dire emergencies. Sewing torn clothes or getting shoes fixed was normal. This was the 1970s and early 1980s in New England, not Appalachia in the 1920s.

But somewhere along the way food was something that was served to you in restaurants or came out of a plastic container. Guns, one of our fundamental rights and common cultural artifacts, became scary boogeymen kept by shifty-eyed paranoids and militia members. Cutting up or even paying off credit cards is a sign of extreme distress. Gold? What are you crazy? You FIX things instead of throw them away? What's wrong with you?

Most of the "doomer" prep here is what we used to call "regular life".
Great post Judas.

jason
02-27-09, 10:24 AM
The driver turns to the passengers and says, "Listen people, I am just as shocked as you are. But we can fix this if we work together. Let's gather all our valuables, including your credit cards and bank account details, and use the money to rescue ourselves from this god-awful place. If we can just calm down and take decisive action, we can all get to the beach I told you about. This is not the time or place for debate---look around you!" Upon receiving all the money, jewelry, credit, and savings that the passengers have, he pulls out a cell phone and makes one quick call. Shortly a helicopter flies in to rescue the driver and his friends, never to return, leaving everyone else behind to fend for themselves.

zoog
02-27-09, 10:29 AM
I simply think people are over-reacting, as they are of wont to do. Fear is the mind-killer.

You guys carry on with your doomerism, I'm not here to stop you.

jk
02-27-09, 10:41 AM
the stock market is listening to this thread

http://2.bp.blogspot.com/_eKH-tiSXFbc/SaeqTvgCxNI/AAAAAAAAFFs/HEPO-wg8OOw/s1600/SPREAD.gif

simitpatel
02-27-09, 11:18 AM
I simply think people are over-reacting, as they are of wont to do. Fear is the mind-killer.

fear is indeed the mind killer, as those who afraid of the rationality of doomerism may have to learn the hard way. indeed, those who viewed itulip as doomers in 2006 have already learned this lesson the hard way.

goadam1
02-27-09, 11:35 AM
More likely, someone says, "I have some lemonade, I'll sell it to you for $100 a glass." And the guy next to you says, "I'll pay $200." Ka-poom.

FRED
02-27-09, 11:37 AM
From our upcoming iTulip Select forecast of the Modern Depression:


http://www.itulip.com/images/realVSpotentialGDP1930-1933.gif

http://www.itulip.com/images/realVCpotentialGDPbest2008-2011.gif


The worst case is an 18% contaction over three years that sets us back to 2000 real GDP, where we were at the peak of the stock market bubble, running a fiscal surplus, housing prices were rising. Even there, are we being too optimistic? Look for our arguments later.

Quincy K
02-27-09, 11:44 AM
Forecasting 20-25 percent U-3 UE by next year and proclaiming things to be just "really, really slow"?

When things get "really, really slow", many people are going to take matters into their own hands as they will have nothing left to lose. Three hots and a cot will actually be welcomed by the unfortunate but probably not accomodated(overcrowding) except for the seriously demented and violent.

It amazes me the naivity of some that believe that they cannot become a victim of a violent crime.

Right up to the point that they lose their watch, wallet and well-being.

20-25 percent U-3 UE is really, really bad. Much so than most here realize.

cjppjc
02-27-09, 11:55 AM
From our upcoming iTulip Select forecast of the Modern Depression:


http://www.itulip.com/images/realVSpotentialGDP1930-1933.gif


http://www.itulip.com/images/realVCpotentialGDPbest2008-2011.gif



The worst case is an 18% contaction over three years that sets us back to 2000 real GDP, where we were at the peak of the stock market bubble, running a fiscal surplus, housing prices were rising. Even there, are we being too optimistic? Look for our arguments later.





I like how Fred pops in and out so fast. Anybody ever catch him online?

goadam1
02-27-09, 01:16 PM
i agree. 20% u3 is an event to plan for. Maybe it isn't in a nice Boston suburb but it sure is around my world.

strittmatter
02-27-09, 01:19 PM
Maybe I'm profoundly out of step with modern America, but "doomer" mentality and preparedness isn't some kind of sickness, but a return to normalcy.

As a kid we lived in a regular suburban-style neighborhood, but had a large garden and grew our own veggies that we put up by freezing and canning. We went fishing when the tautog were running and put up plenty of frozen fish. Keeping shotguns in the house and knowing how to use them was commonplace for home defense, and going to shoot trap was fun, along with game dinners. My grandpa gave some krugerrands to my parents for a "backup". Prep for blizzards or power outages or hurricanes was just what you did. Credit cards were for rich people or dire emergencies. Sewing torn clothes or getting shoes fixed was normal. This was the 1970s and early 1980s in New England, not Appalachia in the 1920s.

But somewhere along the way food was something that was served to you in restaurants or came out of a plastic container. Guns, one of our fundamental rights and common cultural artifacts, became scary boogeymen kept by shifty-eyed paranoids and militia members. Cutting up or even paying off credit cards is a sign of extreme distress. Gold? What are you crazy? You FIX things instead of throw them away? What's wrong with you?

Most of the "doomer" prep here is what we used to call "regular life".

Grew up on a farm in north texas. couldn't agree more. would love to expand on this later........

Fiat Currency
02-27-09, 01:54 PM
I like how Fred pops in and out so fast. Anybody ever catch him online?

I snapped a picture of him once ... but it was quite a while ago ... here it is ...

1144 :D

BadJuju
02-27-09, 02:03 PM
I snapped a picture of him once ... but it was quite a while ago ... here it is ...

1144 :D


Hahaha! :D That's awesome.

Basil
02-28-09, 12:15 AM
Maybe I'm profoundly out of step with modern America, but "doomer" mentality and preparedness isn't some kind of sickness, but a return to normalcy.

As a kid we lived in a regular suburban-style neighborhood, but had a large garden and grew our own veggies that we put up by freezing and canning. We went fishing when the tautog were running and put up plenty of frozen fish. Keeping shotguns in the house and knowing how to use them was commonplace for home defense, and going to shoot trap was fun, along with game dinners. My grandpa gave some krugerrands to my parents for a "backup". Prep for blizzards or power outages or hurricanes was just what you did. Credit cards were for rich people or dire emergencies. Sewing torn clothes or getting shoes fixed was normal. This was the 1970s and early 1980s in New England, not Appalachia in the 1920s.

But somewhere along the way food was something that was served to you in restaurants or came out of a plastic container. Guns, one of our fundamental rights and common cultural artifacts, became scary boogeymen kept by shifty-eyed paranoids and militia members. Cutting up or even paying off credit cards is a sign of extreme distress. Gold? What are you crazy? You FIX things instead of throw them away? What's wrong with you?

Most of the "doomer" prep here is what we used to call "regular life".

Excellent post. I have wanted to write something along these lines this week but been a bit too consumed with the three year pay freeze and talk of benefit cuts at work. At least I knew it was coming. My colleagues have been blind-sided.

Anyways, it seems to me that interpreting talk of stocking food and fuel and having a gun as going 'mad max' or as being a doomer is intellectually dishonest, especially for itulip. It is mocking the argument rather than considering the rationale behind it.

Many of us know people who think that we are crazy for buying gold, taking our money out of equities, and continuing to rent. They sometimes refer to us as irrational doomers. Often they grossly distort the rationale many here follow for holding PMs and cash and set up straw men so that they do not need to take our arguments seriously. This is what some members of itulip are doing in ridiculing the instinct to invest in food and fuel and develop more elaborate contingency plans.

As some here have observed, U3 around 20% is not going to look pretty and will take a toll on the very weak social fabric of the US. In some places it will tear that fabric to shreds. If you live near one of those places, it would be wise to prepared.

What will a sudden stop look like in practical terms? It will not be pretty, and it is worth being prepared for it. In "Road to Ruin" EJ writes of GDP at -4% for 2009 and 2010. What about negative 6.2% as was announced today for Q4, 08? Were that to accelerate, things could get quite ugly before they get uglier.

For some, buying PMs and having cash on hand is what gives them greater peace of mind. For others, greater diversification into more tangible assets gives them peace of mind. Others feel the need to be able to defend themselves and their families against the increased crime rate that poverty brings, along with the inmates being released from prisons for budget relief. All of these are prudent measures based upon the same underlying analysis. We would all do well to recognize this before mocking the measures some are taking to prepare themselves.

No one here is talking about strapping gas cans on top of cars, selling everything and living like hooligans, nor of preparing for the end of time.

Southernguy
02-28-09, 07:23 AM
For what it's worth, what I got out of this cryptic, short article was that I need to add a portable GPS to my list of supplies. May be the only way to find my way home. Thanks.
Shall geopositioning satelites be working?;)

markoboston
02-28-09, 04:22 PM
Actually, I am considering a move right now from my rented Boston apartment to a mortgaged house in a somewhat nice Boston suburb. (It's not an upscale suburb, but it currently has a low crime rate. My partner's brother is a cop there.)

Does it sound crazy to be buying a house with a mortgage right now? I can't afford to buy outright and want to save cash for food storage and buying some practical stuff like a wood stove. I will be putting 20% down to get the mortgage. Prices have come down, but most "experts" say they are going down further. On the other hand, I am somewhat betting that inflation or hyperinflation will make the mortgage affordable even if my partner and I are underemployed. (We are buying cheap enough that either of us could cover the mortgage if the other lost his job.) In a deflationary scenario, my savings alone would keep us going for at least a year without income. Most of all, I want a house with a big yard and basement to grow and store food. I can't do that in an urban apartment.

Does this make sense?

cjppjc
02-28-09, 05:44 PM
Actually, I am considering a move right now from my rented Boston apartment to a mortgaged house in a somewhat nice Boston suburb. (It's not an upscale suburb, but it currently has a low crime rate. My partner's brother is a cop there.)

Does it sound crazy to be buying a house with a mortgage right now? I can't afford to buy outright and want to save cash for food storage and buying some practical stuff like a wood stove. I will be putting 20% down to get the mortgage. Prices have come down, but most "experts" say they are going down further. On the other hand, I am somewhat betting that inflation or hyperinflation will make the mortgage affordable even if my partner and I are underemployed. (We are buying cheap enough that either of us could cover the mortgage if the other lost his job.) In a deflationary scenario, my savings alone would keep us going for at least a year without income. Most of all, I want a house with a big yard and basement to grow and store food. I can't do that in an urban apartment.

Does this make sense?

Sounds like you want to buy a home. If you've wanted to for a long time go ahead. If you've just come to the idea, wait a little while longer.

ThePythonicCow
02-28-09, 06:41 PM
Sounds like you want to buy a home. If you've wanted to for a long time go ahead. If you've just come to the idea, wait a little while longer.The length of time one has been considering something doesn't especially determine how good a decision it is.

For that matter, the comments of others on forums such as this are not especially determinative either ;).

However the act of posing the question to others can be a useful way to help arrive at better decision. By "better" I don't mean what one would choose if one had a perfect crystal ball; that's not possible. I mean a decision that better fits the various aspects and circumstances of ones present life.

cjppjc
02-28-09, 06:48 PM
The length of time one has been considering something doesn't especially determine how good a decision it is.

.

Listen Cow.

No seriously, to a large extent the amount of time spent considering the purchase of a home will determine if the person will proceed with the transaction.

ThePythonicCow
02-28-09, 09:33 PM
Listen Cow.

No seriously, to a large extent the amount of time spent considering the purchase of a home will determine if the person will proceed with the transaction.How do you come to know this?

My reply was based on my personal experience with my own decisions, which more likely stick if they feel right and make sense to the all the ways I have of being aware of or analyzing my world. Major decisions leading to dramatic changes of direction that surprise even me, and which might guide my life for decades, can be made in the space of a day or so, if things line up right. Obviously, I cannot claim that my way of doing such things is the common or wisest course for others, so my extrapolation to the question at hand might be dubious.

So I ask how you have learned of this correlation you describe -- that the extent of time considering the purchase correlates with the probability of completing the transaction? And, for that matter, what the original poster seemed to be seeking was not an estimate of the probability of his completing the transaction, but rather insights into whether this would seem like a good economic, financial or other decision, from other people on this forum.

cjppjc
02-28-09, 10:08 PM
How do you come to know this?

My reply was based on my personal experience with my own decisions, which more likely stick if they feel right and make sense to the all the ways I have of being aware of or analyzing my world. Major decisions leading to dramatic changes of direction that surprise even me, and which might guide my life for decades, can be made in the space of a day or so, if things line up right. Obviously, I cannot claim that my way of doing such things is the common or wisest course for others, so my extrapolation to the question at hand might be dubious.

So I ask how you have learned of this correlation you describe -- that the extent of time considering the purchase correlates with the probability of completing the transaction? And, for that matter, what the original poster seemed to be seeking was not an estimate of the probability of his completing the transaction, but rather insights into whether this would seem like a good economic, financial or other decision, from other people on this forum.

I am a real estate agent. Believe me, people who rush into buying a home BACK OUT more often then those who have taken the time to think and talk about purchasing a home. It's a waste of time, money, and sometimes the sellers will go under contract, and then those sellers go under contract..... and so on. It sucks when all those people get F..... over. People who have spent the time doing some research and soul searching are more emotionally invested in the transaction. They usually will close.

markoboston
02-28-09, 10:38 PM
OK, well, for what it's worth, I've wanted to buy a house for years. I haven't been able to because I had a big grad school debt, and while I was paying it off, house prices were rising above what I could afford. So I rented and saved and saved. Now prices have fallen to the point that I can do it, with a mortgage, but with substantial savings left over to stock up. I just wonder if buying right now, when prices could drop a lot further, is a stupid idea. On the other hand, if I don't buy now, while mortgages are available and affordable and before things fall apart, I may not be able to buy before inflation evaporates my savings. I really want that big vegetable garden (and maybe some chickens) and a basement for stocking up. I would like a place of my own.

jk
02-28-09, 10:45 PM
OK, well, for what it's worth, I've wanted to buy a house for years. I haven't been able to because I had a big grad school debt, and while I was paying it off, house prices were rising above what I could afford. So I rented and saved and saved. Now prices have fallen to the point that I can do it, with a mortgage, but with substantial savings left over to stock up. I just wonder if buying right now, when prices could drop a lot further, is a stupid idea. On the other hand, if I don't buy now, while mortgages are available and affordable and before things fall apart, I may not be able to buy before inflation evaporates my savings. I really want that big vegetable garden (and maybe some chickens) and a basement for stocking up. I would like a place of my own.
if you're buying the home as an investment, don't. if you're buying a home to live in and the finances make sense going forward - which sounds like the case - why not? you might check the math by looking at what the house would rent for, and whether you'd be better off renting a similar place instead of buying.

cjppjc
02-28-09, 10:48 PM
OK, well, for what it's worth, I've wanted to buy a house for years. I haven't been able to because I had a big grad school debt, and while I was paying it off, house prices were rising above what I could afford. So I rented and saved and saved. Now prices have fallen to the point that I can do it, with a mortgage, but with substantial savings left over to stock up. I just wonder if buying right now, when prices could drop a lot further, is a stupid idea. On the other hand, if I don't buy now, while mortgages are available and affordable and before things fall apart, I may not be able to buy before inflation evaporates my savings. I really want that big vegetable garden (and maybe some chickens) and a basement for stocking up. I would like a place of my own.


Sounds like you want to buy a home. Will prices continue down? Very likely. Will rates move up and make up for any money saved on the purchase? Maybe. I can give you one piece of practical advise. The best time to purchase a home on the northeast, contrary to popular wisdom is in the dead of winter.

ThePythonicCow
02-28-09, 11:33 PM
I am a real estate agent. Believe me, people who rush into ...Well stated answer to my question - thanks.

Forrest
03-01-09, 06:17 AM
Maybe I'm profoundly out of step with modern America, but "doomer" mentality and preparedness isn't some kind of sickness, but a return to normalcy...But somewhere along the way food was something that was served to you in restaurants or came out of a plastic container. Guns, one of our fundamental rights and common cultural artifacts, became scary boogeymen kept by shifty-eyed paranoids and militia members. Cutting up or even paying off credit cards is a sign of extreme distress. Gold? What are you crazy? You FIX things instead of throw them away? What's wrong with you?

Most of the "doomer" prep here is what we used to call "regular life".


I too was raised by Great Depression teenagers...one from a farm, one from a country suburb before suburbs existed.

My Dad made sure that we spent every summer at a 30's era cabin belonging to my grandmother near Yellowstone National Park, in Wyoming...no electricity, you carried water from the stream or spring in buckets hanging from a yoke; you cooked on a wood stove, and you dodged grizzlies and moose on the way out to the outhouse at night (moose are terrifying in the dark!). My Mom made sure we all learned to raise food, and most of my orchard trees still produce, with more young trees and vines going in this spring, and a lot of square foot gardening in 2'x2' pots.

Everyone I know has shot guns and scoped rifles for varmints (Two legged and four legged) and I have people shot as well as snake shot for the Colt Cobra (my, it is a sweet weapon...quiet, with almost no recoil!). Most of us gun owners in California got extra ammo the week Obama was elected...they're on back order now for months!. And although we live in So Cal, my family managed to find a couple of parcels of land (5-acres each), and when the grid goes down, which it seems to regularly, we only need gasoline for the generator to keep the wells going, and a large propane tank kept always half full. Next project is to get going with the plan of putting in an oldfashioned windmill for the wells as soon as possible, and with the drought, extra wells.

We are in earthquake territory, and above the snow line, and in high fire territory, so our roads get flooded out, mudded out, snowed out, burned out, and iced out, and we're used to being cut off, lighting candles and the oil hurricane lamps, and using wood stoves. The electric company is a co-op that goes out every time someone hits a pole, or the winds go over 70 mph. Batteries are kept in the spare freezer, and we have enough propane and gasoline to keeps things going...for a while.

I'd love to put in the bunker, but my Dad thought the gold would be of more use - and all that without reading i-Tulip (he bought his gold in 2004...my investments were less timely!) and since I built 14 years ago, and my Dad 22 years ago, I might be able to sell both houses off one day, and move to a lower tax state, with more water, and less extreme Liberals. My Dad's house is paid off, mine is still worth a bit more than I have against it, and the apartments support themselves with a nice income, so there is hope in the long run, but I'm probably stuck for ten years plus.

I'd love to stock up food for a year, but with my savings in gold, a bit of silver (for loose change), and cash reserves, I can only boast of about 3 months of food, and that would be eating skinny. So I keep buying staples, canned goods, and things I never use, like coffee, or canned fish, extra chocolate and excess sugar, matches, can-openers, as well as OTC medications, aspirin, and hydrogen peroxide, soap, shampoo, and excess toiletries, and what not to trade with. Otherwise, lots of bottled and dried fruit, canned meats, stews, soups, and some of the egregious MRES (to give away, mostly). But even my large two bedrooms are getting hard to walk in, due to the stacks of stuff in plastic stacking bins, and with our summer heat, putting them in a storage container or garage just won't do.

Adding to your hoard is wonderful in good times and bad, particularly when the nearest market is thirty miles away, but only if your neighbors are doing the same, and you happen to have a spare air conditioned barn, or a basement...and I don't! Those who can't or don't prepare I hope never stumble onto my property during a tense time, unless I know them well. I don't want to use the back hoe in that manner.

What I'd really like to get my hands on is the 2 1/2 year list of items my Mormon neighbors are rumored to have, for they are supposed to be the best at planning for emergencies of any group. (Any LDS please pm me if you can get me said list!)

Fortunately, there are enough gun owners in our small community to help form a protective band with those of us that value quiet privacy, (even if I'm not on terms with them to ask for details of what they are storing...it's a touchy topic!), while 2/3rd's of the remaining population are long time residents who mostly attend church, and help each other through our community church council, but have little enough themselves. Total residents...about 6000, spread out in a 30 mile x 30 mile area, and not too bad an area for a crowded state with a freeway 35 to 45 miles away in three different directions.

The problem is, so few people, even in my small area, can afford to, or are willing to prepare for very much...they are just getting by, and even those that do believe, at least officially when I am speaking about it, have to shrug off what might be needed due to their finances, or are in denial, not really believing that something might go wrong...even for a few weeks.

I'm glad for the guns, glad for the gold buried tidily under the third rose bush from the seventh tree behind the wellhouse, and especially glad for a trio of Dobermans helping to protect us from molestation with the illegals going by. Without a local police force, the best thing I can do is maintain a low profile.

Large homes are marvelous when things are bright and beautiful, but I sure am glad I downsized when I did. Living smaller, (from the outside, at least) and apparently more frugally than your neighbors is not a bad thing, with all that's going on, and I think it may be a good way to avoid being preyed upon if things get nasty. Strange how the local junkyard, complete with a very mean dog, and a guy with a shotgun, never gets bothered much, while the nicer places have the occasional problem. If things get nasty, perhaps the bad guys will not bother with my small dwelling complete with gun and dogs in favor of the McMansion down the street with the security service?

I am cautiously preparing for every way the cat can jump...isn't that what we are supposed to do? Be responsible, for ourselves, our families, and help our local communities as we can?

Realistically, there is only so much anyone can do to protect themselves from the bad guys, particularly when they are the ones running the country. And having drug cartels in power only 50 miles south is troubling...I fear an onslaught of refugees, particularly with Arnold and Co. welcoming them with open arms. (Schwartzeneggar's professed views not-with-standing...after all, he's married to a Kennedy with a very soft heart for the oppressed.)

No place is perfectly safe...no one can be protected from everything indefinately. Even the richest of us cannot outrun time, even if we outrun everthing else. The point for us all, is to survive all this mess with something in hand to go on with, and to do it as cheerfully and enjoyably as is possible. If we can manage not to lose what we have worked for, it will be very well.

Our task is to live the journey, and squirrel away a bit here and there for a rainy day, to munch on with a good book by candlelight...particularly when there's a hurricane hovering on the horizon.

And there are a lot of storm clouds out there.

GRG55
03-01-09, 07:04 AM
OK, well, for what it's worth, I've wanted to buy a house for years. I haven't been able to because I had a big grad school debt, and while I was paying it off, house prices were rising above what I could afford. So I rented and saved and saved. Now prices have fallen to the point that I can do it, with a mortgage, but with substantial savings left over to stock up. I just wonder if buying right now, when prices could drop a lot further, is a stupid idea. On the other hand, if I don't buy now, while mortgages are available and affordable and before things fall apart, I may not be able to buy before inflation evaporates my savings. I really want that big vegetable garden (and maybe some chickens) and a basement for stocking up. I would like a place of my own.

One important factor to include in your analysis is just how mobile you prefer to remain. Real estate is not a liquid asset; a house is easier to buy than it is to sell...and selling a house in the future may be even more difficult still. So if you anticipate wanting [or having] to move elsewhere or live abroad, you might want to ask yourself how owning a house may help or hinder that. Just a thought from personal experience...

ThePythonicCow
03-01-09, 08:27 AM
Forrest -- if you are (reasonably enough) concerned with an influx of drug gangs from south of the border, why did you choose that location to live?

swgprop
03-01-09, 03:00 PM
Will prices continue down? Very likely.

OMG - A real estate agent predicting a drop in RE prices?? Heresy!! You risk the wrath of the NAR you know.. :D

Contemptuous
03-01-09, 03:18 PM
Forrest -

<< But even my large two bedrooms are getting hard to walk in, due to the stacks of stuff in plastic stacking bins >>

Just my own opinion here, but the extent of your survivalist obsession and that of your father seems to border upon the unhealthy to this viewer. My parents were depression era kids also, yet I never got this sort of bunker mentality from them, nor would I want it, frankly. I remember reading fantasy books with this end of days theme when I was a teenager. Haven't bothered to read one ever since. The "preparedness" your family has embraced to this extent verges upon an undercurrent of emotional distress. You just won't ever use all this stuff guy. You'll wind up sheepishly eating some of those tinned foods in five years, figuring to consume them before they go bad, which will be after this economic collapse occurred and was subsequently resolved without any huge dramatic changes to your lifestyle other than at the general price level. Your "societal breakdown" never quite materialized, with the roving armed gangs of Mad Max characters. ... And the dobermanns ... protecting your "survival" food supplies and buried gold ... (!!) :o

Here's a deeply subversive, radical idea. Buy a cello, or a silver flute, and try falling in love with that as a thing of beauty, instead of the Colt Cobra. If your mind is repelled by this alternative, and finds it effete or even repugnant, that provides some real clues as to the hermetic mindset which your family's survivalist preoccupations have instilled in you. The "great depression teenagers" gambit is false. I also have parents to taught me much from that era, and the values they instilled had nothing remotely resembling your preoccupations.


I too was raised by Great Depression teenagers...one from a farm, one from a country suburb before suburbs existed.

My Dad made sure that we spent every summer at a 30's era cabin belonging to my grandmother near Yellowstone National Park, in Wyoming...no electricity, you carried water from the stream or spring in buckets hanging from a yoke; you cooked on a wood stove, and you dodged grizzlies and moose on the way out to the outhouse at night (moose are terrifying in the dark!). My Mom made sure we all learned to raise food, and most of my orchard trees still produce, with more young trees and vines going in this spring, and a lot of square foot gardening in 2'x2' pots.

Everyone I know has shot guns and scoped rifles for varmints (Two legged and four legged) and I have people shot as well as snake shot for the Colt Cobra (my, it is a sweet weapon...quiet, with almost no recoil!). Most of us gun owners in California got extra ammo the week Obama was elected...they're on back order now for months!. And although we live in So Cal, my family managed to find a couple of parcels of land (5-acres each), and when the grid goes down, which it seems to regularly, we only need gasoline for the generator to keep the wells going, and a large propane tank kept always half full. Next project is to get going with the plan of putting in an oldfashioned windmill for the wells as soon as possible, and with the drought, extra wells.

We are in earthquake territory, and above the snow line, and in high fire territory, so our roads get flooded out, mudded out, snowed out, burned out, and iced out, and we're used to being cut off, lighting candles and the oil hurricane lamps, and using wood stoves. The electric company is a co-op that goes out every time someone hits a pole, or the winds go over 70 mph. Batteries are kept in the spare freezer, and we have enough propane and gasoline to keeps things going...for a while.

I'd love to put in the bunker, but my Dad thought the gold would be of more use - and all that without reading i-Tulip (he bought his gold in 2004...my investments were less timely!) and since I built 14 years ago, and my Dad 22 years ago, I might be able to sell both houses off one day, and move to a lower tax state, with more water, and less extreme Liberals. My Dad's house is paid off, mine is still worth a bit more than I have against it, and the apartments support themselves with a nice income, so there is hope in the long run, but I'm probably stuck for ten years plus.

I'd love to stock up food for a year, but with my savings in gold, a bit of silver (for loose change), and cash reserves, I can only boast of about 3 months of food, and that would be eating skinny. So I keep buying staples, canned goods, and things I never use, like coffee, or canned fish, extra chocolate and excess sugar, matches, can-openers, as well as OTC medications, aspirin, and hydrogen peroxide, soap, shampoo, and excess toiletries, and what not to trade with. Otherwise, lots of bottled and dried fruit, canned meats, stews, soups, and some of the egregious MRES (to give away, mostly). But even my large two bedrooms are getting hard to walk in, due to the stacks of stuff in plastic stacking bins, and with our summer heat, putting them in a storage container or garage just won't do.

Adding to your hoard is wonderful in good times and bad, particularly when the nearest market is thirty miles away, but only if your neighbors are doing the same, and you happen to have a spare air conditioned barn, or a basement...and I don't! Those who can't or don't prepare I hope never stumble onto my property during a tense time, unless I know them well. I don't want to use the back hoe in that manner.

What I'd really like to get my hands on is the 2 1/2 year list of items my Mormon neighbors are rumored to have, for they are supposed to be the best at planning for emergencies of any group. (Any LDS please pm me if you can get me said list!)

Fortunately, there are enough gun owners in our small community to help form a protective band with those of us that value quiet privacy, (even if I'm not on terms with them to ask for details of what they are storing...it's a touchy topic!), while 2/3rd's of the remaining population are long time residents who mostly attend church, and help each other through our community church council, but have little enough themselves. Total residents...about 6000, spread out in a 30 mile x 30 mile area, and not too bad an area for a crowded state with a freeway 35 to 45 miles away in three different directions.

The problem is, so few people, even in my small area, can afford to, or are willing to prepare for very much...they are just getting by, and even those that do believe, at least officially when I am speaking about it, have to shrug off what might be needed due to their finances, or are in denial, not really believing that something might go wrong...even for a few weeks.

I'm glad for the guns, glad for the gold buried tidily under the third rose bush from the seventh tree behind the wellhouse, and especially glad for a trio of Dobermans helping to protect us from molestation with the illegals going by. Without a local police force, the best thing I can do is maintain a low profile.

Large homes are marvelous when things are bright and beautiful, but I sure am glad I downsized when I did. Living smaller, (from the outside, at least) and apparently more frugally than your neighbors is not a bad thing, with all that's going on, and I think it may be a good way to avoid being preyed upon if things get nasty. Strange how the local junkyard, complete with a very mean dog, and a guy with a shotgun, never gets bothered much, while the nicer places have the occasional problem. If things get nasty, perhaps the bad guys will not bother with my small dwelling complete with gun and dogs in favor of the McMansion down the street with the security service?

I am cautiously preparing for every way the cat can jump...isn't that what we are supposed to do? Be responsible, for ourselves, our families, and help our local communities as we can?

Realistically, there is only so much anyone can do to protect themselves from the bad guys, particularly when they are the ones running the country. And having drug cartels in power only 50 miles south is troubling...I fear an onslaught of refugees, particularly with Arnold and Co. welcoming them with open arms. (Schwartzeneggar's professed views not-with-standing...after all, he's married to a Kennedy with a very soft heart for the oppressed.)

No place is perfectly safe...no one can be protected from everything indefinately. Even the richest of us cannot outrun time, even if we outrun everthing else. The point for us all, is to survive all this mess with something in hand to go on with, and to do it as cheerfully and enjoyably as is possible. If we can manage not to lose what we have worked for, it will be very well.

Our task is to live the journey, and squirrel away a bit here and there for a rainy day, to munch on with a good book by candlelight...particularly when there's a hurricane hovering on the horizon.

And there are a lot of storm clouds out there.

cjppjc
03-01-09, 03:18 PM
OMG - A real estate agent predicting a drop in RE prices?? Heresy!! You risk the wrath of the NAR you know.. :D


The NAR ALWAYS has rosie assumptions, that's for sure. I remember about 2 years ago a colleague being quoted in a newpaper article as saying "Prices were already rising." I got a chuckle out of that.

Forrest
03-01-09, 04:08 PM
Forrest - Just my own opinion here, but the extent of your survivalist obsession and that of your father seems to border upon the unhealthy to this viewer...Haven't bothered to read one ever since. The "preparedness" your family has embraced to this extent verges upon an undercurrent of emotional distress...

Hmmmm...not an obsession...not even a preoccupation...just part of the monthly shopping! The Aussies went so far as to order it's populace to stock up for six weeks of trouble, and that was before October '08. Having 3 month's supplies...3 month's scant supplies for my family, and those of my friends without means to provide a safety net for themselves is not unseemly.

I'd like more, investing in immediately useful commodities regularly allows me to buy in bulk as things become available at low prices, and if I don't sell them in the local community, I can eat them. I am buying in those commodities that make life pleasurable even in the midst of difficulties...have you seen the rise in coffee and sugar prices?. Also, my give-away MRE's doubled in value in two months from purchase last August...not a bad return on a 5 year investment intended for charity in the first place.

Emotional distress was not really a feature of our summers in the mountains...it was a lot of fun, but the knowledge of how to live during a time of difficulty is priceless, and I enjoyed writing about it, just as I enjoyed reading about every one else's ideas and plans.


You just won't ever use all this stuff guy. You'll wind up sheepishly eating some of those tinned foods in five years, figuring to consume them before they go bad, which will be after this economic collapse occurred and was subsequently resolved without any huge dramatic changes to your lifestyle other than at the general price level. Your "societal breakdown" never quite materialized, with the roving armed gangs of Mad Max characters. ... And the dobermanns ... protecting your "survival" food supplies and buried gold ... (!!) :o

My dear Lukester! The ' "survival" food supplies" ' I'm putting up against emergencies are simply an extended version of what your wife probably keeps in the pantry...providing you have space for a pantry, or time for a wife...you sound like a city guy that eats out a lot!!!

I don't expect societal breakdown to the point of Mad Max...I do expect the things needed for comfort to be in short supply from time to time...and living so far from Cost Co. and Ralph's makes it a requirement to have a lot of beer and chips at hand when friends drop in for a bar-b-que and the game of the week, not to mention keeping the freezers stocked with good steaks!

And my big black babies? They look fierce...they are supposed to, and yes, they bark and look mean, but they also sleep at the foot of the bed, and curl up at my feet in the living room. They are also better than a doorbell...particularly since my gate is 800ft from my front door, and everyone who knows me comes around to the back!

As for the buried gold...do you keep yours in a vault you've never seen, or something? Not to mention that I don't have trees near the well house...the roots might invade the pipes, and no one with sense plants rose bushes where they can't be seen!

Dude, lighten up!

Contemptuous
03-01-09, 04:17 PM
Hmmmm...not an obsession...not even a preoccupation... Dude, lighten up!

Uh huh. Whatever you say Forrest.


But even my large two bedrooms are getting hard to walk in, due to the stacks of stuff in plastic stacking bins

kartius919
03-01-09, 05:53 PM
If everyone tells you not to buy a house, then is it time to buy a house?

cjppjc
03-01-09, 06:04 PM
If everyone tells you not to buy a house, then is it time to buy a house?


Reread the posts on this page. GRG55 and JT make great points.

kartius919
03-01-09, 07:04 PM
I cannot read, I can only type nonsense.

Basil
03-02-09, 12:03 AM
OK, well, for what it's worth, I've wanted to buy a house for years. I haven't been able to because I had a big grad school debt, and while I was paying it off, house prices were rising above what I could afford. So I rented and saved and saved. Now prices have fallen to the point that I can do it, with a mortgage, but with substantial savings left over to stock up. I just wonder if buying right now, when prices could drop a lot further, is a stupid idea. On the other hand, if I don't buy now, while mortgages are available and affordable and before things fall apart, I may not be able to buy before inflation evaporates my savings. I really want that big vegetable garden (and maybe some chickens) and a basement for stocking up. I would like a place of my own.

Mark,

It sounds like we have been examining the same real estate market. I have concluded that it is best to wait at this time. Though my circumstances are probably different than yours. I see a drop of 10 to 15% coming quickly in the greater Boston area. The upscale suburbs have been the holdouts, but even places like Wayland have been falling rapidly as of late. I would bet that places like Newton, Lexington, Brookline, etc. go down hard in the next few months.

A great forum for these issues is Bostonbubble.com. The monthly graph that the administrator calculates is excellent. It demonstrates that the declines are increasing more rapidly by the month.

I also like to use this calculator http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html. It is the best I have found, especially interesting when you increase the rate of inflation to match itulip's projections.

By waiting one year, you could save a very big chunk of change. A very good friend of the family, who has made a killing in real estate twice and lost her shirt once has told me to wait until there is blood in the water and then low-ball with abandon, unless I find the perfect place for my family.

So for now we are waiting and watching.

ThePythonicCow
03-02-09, 06:22 PM
Actually, I am considering a move right now from my rented Boston apartment to a mortgaged house in a somewhat nice Boston suburb. One other thought on this move -- Some neighborhoods, after they get enough foreclosures, are going to go to h*ll in a handbasket. I'd look for places to live that will be able to keep pretty much the same people, still on good terms with each other, through hard times. Some of the most recently built subdivisions already have too many vacant houses, which become magnets for disrepair and crime.

ASH
03-02-09, 07:33 PM
One other thought on this move -- Some neighborhoods, after they get enough foreclosures, are going to go to h*ll in a handbasket. I'd look for places to live that will be able to keep pretty much the same people, still on good terms with each other, through hard times. Some of the most recently built subdivisions already have too many vacant houses, which become magnets for disrepair and crime.

I've been watching my street fill up with renters. Since I myself am a renter, I know this is kind of hypocritical, but the trend bothers me. I just signed a renewal of my lease for another year, but if I start seeing signs the neighborhood is actually headed downhill, I may have to move. I'm a renter by choice -- I suspect my neighbors rent out of necessity.

markoboston
03-02-09, 09:33 PM
Mark,

It sounds like we have been examining the same real estate market. I have concluded that it is best to wait at this time. Though my circumstances are probably different than yours. I see a drop of 10 to 15% coming quickly in the greater Boston area. The upscale suburbs have been the holdouts, but even places like Wayland have been falling rapidly as of late. I would bet that places like Newton, Lexington, Brookline, etc. go down hard in the next few months.

So for now we are waiting and watching.

I suspect you are right about this, but my partner is very eager to "own", and I agreed a couple years ago that we would do this in 2009, and here we are. So we are going to go ahead. Your circumstances probably are different from mine. Newton, Lexington, and Brookline are out of my league except maybe for a cramped condo. I am looking at Stoughton. I think it offers good value for money right now. It has already had a bigger drop than most of the Boston area. It probably has somewhat further to fall, but probably not as far as overpriced Lexington, Newton, or Brookline, as the corporate layoffs hit more and more managers, and as all those old people in those big houses pass away or downscale or move to Boca Raton.

Basil
03-02-09, 09:54 PM
I suspect you are right about this, but my partner is very eager to "own", and I agreed a couple years ago that we would do this in 2009, and here we are. So we are going to go ahead. Your circumstances probably are different from mine. Newton, Lexington, and Brookline are out of my league except maybe for a cramped condo. I am looking at Stoughton. I think it offers good value for money right now. It has already had a bigger drop than most of the Boston area. It probably has somewhat further to fall, but probably not as far as overpriced Lexington, Newton, or Brookline, as the corporate layoffs hit more and more managers, and as all those old people in those big houses pass away or downscale or move to Boca Raton.

I cannot afford those areas either. But I do think that they are about to get more affordable and my gold and that real estate may meet in the middle at some point over the next few years.

My wife has been hot to own for some time, but now that she sees that everything we discuss on these forums is coming to pass, she is very glad that we did not buy. It took some time, but she is fully on board with the rent and wait strategy. The rent vs. own calculator from NYT was useful in this regard.

markoboston
03-03-09, 05:12 PM
I cannot afford those areas either. But I do think that they are about to get more affordable and my gold and that real estate may meet in the middle at some point over the next few years.
... It took some time, but she is fully on board with the rent and wait strategy.

You're lucky. My partner was never fully on board with rent and wait. A bit brainwashed about owning being a way to accumulate wealth, a bit in denial about evidence to the contrary. Meanwhile, I am getting a little nervous about economic collapse and a shutdown of the financial system, perhaps followed by hyperinflation, making it difficult to purchase anything at a certain point. Part of me wants to get in while things are still kind of normal. Part of me wants to wait for the bottom as you are doing. But we are not going to wait. My partner is making an offer on a place tonight.

Basil
03-03-09, 10:46 PM
You're lucky. My partner was never fully on board with rent and wait. A bit brainwashed about owning being a way to accumulate wealth, a bit in denial about evidence to the contrary. Meanwhile, I am getting a little nervous about economic collapse and a shutdown of the financial system, perhaps followed by hyperinflation, making it difficult to purchase anything at a certain point. Part of me wants to get in while things are still kind of normal. Part of me wants to wait for the bottom as you are doing. But we are not going to wait. My partner is making an offer on a place tonight.

Does not sound like you are stretching. So if it brings peace and stability, then it is a good thing indeed. I hope it works out well. I just got my landlord to lower my rent. So my argument for buying is getting weaker.

flintlock
03-05-09, 10:27 AM
Mark,

It sounds like we have been examining the same real estate market. I have concluded that it is best to wait at this time. Though my circumstances are probably different than yours. I see a drop of 10 to 15% coming quickly in the greater Boston area. The upscale suburbs have been the holdouts, but even places like Wayland have been falling rapidly as of late. I would bet that places like Newton, Lexington, Brookline, etc. go down hard in the next few months.

A great forum for these issues is Bostonbubble.com. The monthly graph that the administrator calculates is excellent. It demonstrates that the declines are increasing more rapidly by the month.

I also like to use this calculator http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html. It is the best I have found, especially interesting when you increase the rate of inflation to match itulip's projections.

By waiting one year, you could save a very big chunk of change. A very good friend of the family, who has made a killing in real estate twice and lost her shirt once has told me to wait until there is blood in the water and then low-ball with abandon, unless I find the perfect place for my family.

So for now we are waiting and watching.

Only thing I'll add to this is unless you are paying cash, consider what mortgage rates might be in a year.