MIKE

“When American’s used their homes as ATM’s, the world economy boomed. Once that debt fueled bubble burst, China started to fall. When the US stopped importing from China, China stopped importing from the rest of the world. Now, the whole world is feeling the pain as the two largest economies in the world collapse.

So, is the crisis over? I don’t think so. We are, as Richard Duncan states, in the New Depression.

This is why the 8 New Rules of Money are important. The rules of money have changed and we need to change with them– or we are toast.”

Quote by Robert Kiyosaki in his latest book “The Conspiracy Of The Rich”

When Obama says that the only way out of this Recession is to spend more with more stimulus packages, what are you thinking? Do you think going into more debt is the answer? If this last housing boom was fueled by the false equity in our homes, then what will happen to the price of your house when the stimulus packages do not work. If there are no buyers to get rid of the glut of empty homes, what will happen to there value? I think it will continue to drop for the next 5-10 years. Just a hunch. Yes, if you buy a property with positive cash flow (rent covers costs of mortgage/repairs/etc.) you should be safe. But what if the real estate market continues to drop, what will happen to the cost of rent? Would it be safe to say that it too would drop until the market corrects itself? There are a few real estate “guru’s” who profess that you can’t go wrong with real estate because the value will eventually return. But what happens in the mean time? Do you wait until your rents fall so low that it is no longer financially sound to hold on to your property? Some say that real estate is a good hedge to inflation, I agree. However, if inflation raises the value of homes, but there is no one who can afford it, the value will remain low. Unless you are purchasing a home for pennies on the dollar, I believe there are other investments that will perform better. Another asset class that will rise due to inflation is Gold and Silver. I believe that Gold and Silver will rise before real estate. Nonetheless, real estate isn’t a bad investment right now, just be ready to take a hit when it comes to the value of your home and equity. If you can weather the equity storm then an investment in real estate is a good investment.

If you enjoyed this video, please check out my blog entry called “the Freeway Paradigm” at the top of the page. Also if you enjoyed these posts please be so kind as to re-tweet or “share” this on Facebook and spread this to as many as you can. I would greatly appreciate it… Thank you!

MP

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