14-Aug-12 World View-Investors prepare for collapse of euro

[John]

14-Aug-12 World View -- Banks, companies and investors prepare for collapse of the euro


Syrian anti-government rebels say they shot down a fighter jet

** 14-Aug-12 World View -- Banks, companies and investors prepare for collapse of the euro
** http://www.generationaldynamics.com/cgi ... 14#e120814



Contents:
Syrian anti-government rebels say they shot down a fighter jet
Analysis: Finding a Global Solution to the Syrian Crisis
Planned Saudi industrial city excludes mixed gender workers
Greece continues downward spiral as economy contracts 6.2%
Banks, companies and investors prepare for collapse of the euro


Keys:
Generational Dynamics, Syria, Bashar al-Assad, Javier Solana,
Alawites, Sunnis, Shias, Iraq, Saudi Arabia,
Greece, European Central Bank, ECB

[Trevor]

That's good news for now, but that feeling of safety can only last so long. Eventually, they'll realize that there is no safe place anywhere and then Germany and America will collapse just like everyone else. Btw, Spain's 10 year bond yields are 6.9% and Italy's at 5.9%.

You say Syria is in an awakening period and this is a non-crisis civil war. What about Libya? When I was watching it, there seemed to be a lot more energy than we're seeing in Syria right now.

[zachstehagen]

Dear John,
I am confused. The government and others say that inflation is VERY LOW or that it's NOT A WORRY, etc. Yet for the past three years I have seen a consistent and continual increase in prices for food, electronic items (even a shaver head that used to run between 30 and 35 dollars is now priced at 90 dollars plus tax). Rents are also increasing. Also a friend of mine recently priced the home (of his recently deceased mother) for sale at $950,000. Within three days he had multiple offers, with one being $1,050,000.
Am I crazy?
Thanks in advance for your help with this. It's important because I want to buy a condo but am waiting for prices to go lower (based on my understanding of what I have been reading on the Generational Dynamics site).

[John]

Dear Trevor,

> You say Syria is in an awakening period and this is a non-crisis
> civil war. What about Libya? When I was watching it, there seemed
> to be a lot more energy than we're seeing in Syria right now.

Libya was/is in a Crisis era.

John

[John]

> I am confused. The government and others say that inflation is
> VERY LOW or that it's NOT A WORRY, etc. Yet for the past three
> years I have seen a consistent and continual increase in prices
> for food, electronic items (even a shaver head that used to run
> between 30 and 35 dollars is now priced at 90 dollars plus
> tax). Rents are also increasing. Also a friend of mine recently
> priced the home (of his recently deceased mother) for sale at
> $950,000. Within three days he had multiple offers, with one being
> $1,050,000. Am I crazy?

> Thanks in advance for your help with this. It's important because
> I want to buy a condo but am waiting for prices to go lower (based
> on my understanding of what I have been reading on the
> Generational Dynamics site).

CNBC just announced this morning that the U.S. inflation rate (PPI)
last month rose by 0.3% (annual rate). That's the overall rate, but
there are specific places where inflation is higher or lower than the
overall rate. I don't know about shavers, but I've written several
articles recently about the drought pushing corn prices up 60% in two
months. As for real estate, you're talking about high-end property,
and the rules are different for those. Low-end properties are under
tremendous price pressure because there are so many distressed homes.
But there are a lot of people with money who are looking for "safe"
places to put it, and one of those places is high end real estate.
Your friend's mother must have maintained that property very well.

A good place to keep track of real estate price issues is the
Calculated Risk blog:
http://www.calculatedriskblog.com/

I've estimated that real estate prices are going to fall to 1990 levels.
I can't recommend buying real estate now, unless you're certain you're
going to live there for at least 15 years.

John

[gerald]

Dear John,
I am confused. The government and others say that inflation is VERY LOW or that it's NOT A WORRY, etc. Yet for the past three years I have seen a consistent and continual increase in prices for food, electronic items (even a shaver head that used to run between 30 and 35 dollars is now priced at 90 dollars plus tax). Rents are also increasing. Also a friend of mine recently priced the home (of his recently deceased mother) for sale at $950,000. Within three days he had multiple offers, with one being $1,050,000.
Am I crazy?
Thanks in advance for your help with this. It's important because I want to buy a condo but am waiting for prices to go lower (based on my understanding of what I have been reading on the Generational Dynamics site).

Zachstehagen:

Do not believe the government inflation rate - they are playing games with the number.

When trying to decide what to do regarding owner occupied real estate, one should consider a number of issues - in no particular order of importance

1) the proverbial axiom - location, location, location - this includes the area's demographics ( including income and cultural characteristics and their short and long term trends ),
utilities and possible environmental issues such as earthquakes, floods, radon gas , water contamination, etc.
2) local government- taxes and tax trends
3) one's personal situation, - job security and income, age, family situation, etc.
4) financing - the structure and duration of the financing including penalties -- unless one pays cash
5) physical condition of said property - this includes it's age and construction

It should also be noted that an owner occupied real estate purchase can be an emotional decision.

( As a side note QUALITY income producing real estate can be increasing in value while owner occupied real estate is generally decreasing in value, the two are not the same, one should not be used to judge the trend of the other )

Now regarding when to buy, will prices continue to go down,? Looking at the overall market, it appears over built and there appears to be a decreasing pool of potential buyers, so prices should generally continue to fall. However, sub markets can go against the trend. You must not forget, every parcel of real estate is unique. For example, on a per square foot bases property on the north side of a road may sell for twice the price compared to the south side. And a corner condo may sell at a premium to a non corner unit of the same square footage. With this in mind there is another joker in the deck to deal with ( a big one ) and that is the value of money,- which is influenced by government, politics, banks, and the population's perception of money . Real estate is a hard non- liquid asset and is affected by all of the above. ( some also say a single family residence should not be considered an asset but an expense ) For a stark example compare the value, over the last 40 years, of two similar single family homes both then worth say $100,000, one on the near north side of Chicago ( today worth say $3,000,000 ) and the other near down Detroit ( today worth say $20,000 )

This decision to purchase can be momentous.

Wishing you the best

[Trevor]

Libya was/is in a Crisis era.

What I was wondering was whether or not it was their crisis war or at least the beginning of it.