鲜花( 1181) 鸡蛋( 48)
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1) Inflation always exits. We both agree on that.
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2) Real estate is a good hedge against inflation only when inflation is modest and controlled. You have to understand the spending behavior of the typical North Americans. They never have any significant amount of saving in the bank to be spent. Instead, their house purchasing power solely depend on two items:( }; w& k: b9 W, m
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A. Their disposable income: salary - tax - living cost
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At this point, the typical buyer can get a 5% down, 30 year mortgage at below 3% variable or 5% fixed. That's as good as item B can get in decades. So, the future of B can only get worse, or at best be equal to that of the current state.3 I" n' K( m$ x: c7 C$ [
. d2 o- g- W* B8 |& iWill A be improved? Yes, if there is a healthy recovery. However, that is not guaranteed. If stagflation takes place (recession+inflation) or if there is hyper-inflation (due to the $3T newly minted), item A will be severely squeezed for the worse of the real estate market. Gold would then be the top choice for wealth preservation. |
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