Where is Silver going?

The equity isn't lost forever, and it would be a mistake to think so. If someone could not afford to live in the house without borrowing against anticipated increases in the equity, they should not have purchased it in the first place. Of course one can point out specific circumstances where someone is hurt by the real estate recession, but I think it's a mistake to generalize it to everyone and conclude that the damage is permanent and irreversable.

Edit: I would also remind you that mortgage interest [most of the payment] and real estate taxes are tax deductible and that these are signifcant advantages over renting.

 

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"The equity isn't lost forever, and it would be a mistake to think so..."

The equity IS lost forever, and every year we have 5% to 8% inflation (soon to be much more), you get further and further from recovery somewhere down the line. The illusory gains in the sales price of your home are fueled by the same inflation that caused the housing bubble in the first place. It is not out of the question that it will happen AGAIN.

The Government, specifically HUD, Fannie Mae, and FHA, lied to you about the true cost of housing, the risk factors, the economic outlook, including the fundamental bottom-line BIG LIE that "everyone" should be a homeowner, as if it were a right. And of course, any agency or industry that promoted housing took a healthy slice off the top (follow the money), and whichever party could scream "homebuyers" the loudest tended to win elections.

"If someone could not afford to live in the house without borrowing against anticipated increases in the equity..." Exactly backwards. If someone could not afford to live in the house without counting on...increases in the equity, then they shouldn't qualify. And the increases in equity, inflationary at best, led to a second scurrilous easy-money, easy-qualify racket, that of HELOC (home equity line of credit), in which the increase in value, based on the sale of comps, was immediately snatched out of the hand of a grinning bank(st)er and splurged on Volvos, televisions, cruises, riding lessons, hot tubs, and $300 shoes.

Finally, the reliance on two income-earners in a traditional family practically guaranteed disaster if one spouse lost his/her job. There was no margin for error. And the big gains in home value? Realized only when you SELL, and oops, you have to shell that money back out to buy some other house at its inflated value.

Incidentally, I was a Realtor for 10 years and I worked for FHA for 15 years -- I was part of the problem. The Government lied, the media lied, the credit counselors lied, all to induce some hapless bunny to buy a house (or condo), so they all could get a little up-front piece of the action. Don't believe me? Look around in 2013.

Remember Ambrose Bierce and his "Devil's Dictionary"? New definition:
>>Condominium - an apartment you can't move out of...

The housing bubble is not over; buy at your own risk. You may profit by paying off your mortgage in ever-cheaper dollars, but the replacement housing is where you'll hit a snag.

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I agree about real estate. I just don't know if it's safe yet. You can get a heck of a deal if you look around though. If I was starting out I would buy a totally crumbled house on an in town lot in some cool town and live there making some sweat equity happen now though. You have to live somewhere, and I know you can get a house for less than 20 grand around here now, which is the price of the lot. How can you go wrong with that? If the lot has some commercial potential you could always use it for something as well. The trick is to keep it simple.

It's like buying a nice coin for silver value. Even if silver goes down a little, the coin is still worth something. Real estate needs to be like that. Find a place that's worth its value now, and it can only get better. You can easily get burned buying some crappy McMansion, just like you can buying some fancy coin.

 

I don't know where silver is going in the next year, but today it's going straight up! It's over $32 now and headed for da moon!

 

I would just point out that in my opinion, and nobody knows the future, it would be a mistake to believe that the housing recession is permanent. And home prices don't have to go up by the same or greater percentage as inflation to beat inflation because the investment is leveraged. I would also point out that a bottom in just about all markets is reached when everyone "knows" and can "prove' with examples and statistics that prices are going to stay low, or worse. The buyers last year and this year might look pretty smart five to ten years from now, and even the buyers at the top will probably regain their equity if they have the income to continue making payments. Time will tell. If you wait until real estate is "safe," you're probably going to pay a much higher price with a much higher interest rate.

 

I'll tell you where silver is going today, and that's down. It's down about a buck and still tanking. I wonder if this is the "smackdown" we were waiting for? I might even buy some more this weekend if I see any around. If silver gets back around $20 I may be buying a bunch.

 

I don't think I said the real estate recession is permanent; I said it's not over yet. Down the line, the costs of owning a home (maintenance, taxes, insurance, etc.) will surge as hyperinflation sets in. Yes, your mortgage payment and interest rate will presumably stay the same (but READ the small print), but "other" costs will swamp the owner on a fixed income or whose salary is not adequately inflation-adjusted. It ain't over, and the market could turn on a dime.

The eventual release of huge numbers of foreclosures-in-process (most currently held off the market) will certainly work to the detriment of recent buyers, who bought in the temporarily-rising markets of 2012 to, say, 2014.

 

I am not buying any more real estate. That's for sure. It eats you up. Meanwhile Eric Sprott thinks silver is the investment of this decade. I love this kind of thing.

http://www.youtube.com/watch?v=xbDWqS68Hag

 

I wouldn't be surprised if we've seen the bottom in real estate since mortgage interest rates have bottomed out and are rising again. I don't think real estate will keep up with inflation though, because most people won't be buying houses (demand) again until the jobs come back, and the jobs won't come back without free enterprise, and free enterprise won't come back as long as money is being printed and given to some businesses and not others. Also, inflation means less buying power for the consumer. So I am anticipating a rentee's market for years to come. Sure the Fed will be buying up mortgage backed securities as long as QE3 is in effect, but that's mostly preventing a double dip as opposed to boosting prices. If you can afford real estate for renting purposes it may be a good move, having someone else pay your mortgage while you build equity, but if you are trying to flip houses I'd steer clear. I am not interested in real estate other than having a roof over my head and a place to call home.

 

I think you're completely wrong. Time will tell.

 

I hope I'm wrong. The middle class has already been savaged by the Government, greedy predatory banks, and reprehensible lobbyists. Unfortunately, they are the easy prey; the poor have nothing to steal, and the rich are in cahoots with the pols.

 

[h=2]Where is Silver going?[/h]

Directly into my safe! As much as i can fit!

 

I just bought about 35 dollars worth of halves, quarter and dimes at 21.75x face. I don't know where silver is headed, but I just made a bet it will bounce back up. Even if it doesn't I have the silver.

 

I see silver is dipping a bit this morning. Maybe the correction isn't over yet. I hope it is, but my hopes and what happens are not always the same thing. Maybe there will be another buying opportunity...

 

It seems to be headed back to where it was at the beginning of yesterday. So much for yesterday's gains.

 

Repeat after me: T-R-A-D-I-N-G R-A-N-G-E

 

True. I am not too concerned by this dip. Now if it keeps going down, I guess it's a buying opportunity. You always have to look on the bright side...

 

I agree with Doug. Man, you have to relax and realize all assets on an exchange trade in ranges.

Before I came to CT, I used to look at PM prices maybe once a year. Its an asset for long term holding, so daily or weekly fluctuations, even monthly or yearly, should really not matter.

If you are in the market to buy some serious quantity, looking at it weekly may be appropriate, but most buying opportunities last a while. I was comfortable enough when it got down to $25 earlier in 2012 to buy some junk I want just because, but it stayed there for a period of time.

Life is too short to stress.

 

I'm happy we got the usual - buy the rumor, sell the news - Bernanke bump. With all the SAE sales I am in a buying mood and the lower the price goes the more I can buy.