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Really enjoy reading your thoughts.. here's my question : I live in Australia and I can clearly see the writing on the wall for this nation also. I'm about to sell my crappy suburban house to get out of debt and create a cash surplus. I've always wanted to live on acreage and be as self sufficient as possible but like most other people I have looked on as inflating property prices have put my dreams of self reliance out of reach. What I'm hoping for is a small window of opportunity that see's property prices crash while the dollar stay's operational so that I may be able to purchase land at an affordable price. How do you like my chances ?
Just a quick comment to everyone also : I look at this new global situation as an immensely positive opportunity for humanity to shed the illusion of culture and correct the overriding unintelligent behavior that has seen us at war with ourselves and our environment for so long, a beautiful opportunity to assuage the pain and accentuate the glory... Human beings are at their best when cornered and most people only seem to change when changing is inevitable, so bring on the inevitable change I say !
Friday 29 July 2011 07:37:26 pm
I see it as quite probable that real estate prices will fall over time, in real terms (whatever that means) making it possible for people with a bit of savings to grab a bit of land to settle on and grow food and fuel. I don't see the dollar, US or AU, or any other fiat currency, holding their value. But certain commodities can be used to bridge that gap. For instance, it will probably be a reasonable gambit for some time to trade a cache of bullion for some acreage. Other, bulkier commodities can be used to bridge the financial chasm as well, but here the task of safely liquidating them quickly enough to make a big purchase may turn out to be daunting.
Saturday 30 July 2011 10:01:17 am
Thanks for your thoughts Dmitry.. I'd like to re-frame my question if I may : Do you think it's likely there will be a period of time that the dollar will hold it's fiat value while property prices crash ? ( the AU dollar has never been stronger than it is now but property has totally stalled in my area ) hoping to have time to spend the money I have on property once it becomes affordable, while money still holds it's value...
thank you Dmitry
Yes, it's possible that fiat currency will remain "valuable" vis à vis useless assets like suburban tract housing even as its value plummets vis à vis useful materials such as food and fuel. But it seems likely that the price of useful bits of land (that hasn't been strip-mined and poisoned by industrial agriculture) will go up as industrial agriculture begins to fail. But other systems will be failing at the time, such as transportation and law and order, and so remote places with no access to rail lines or water transport are likely to remain cheap while more central places will remain expensive as parts of the population that still have resources drift toward more survivable areas. You'll have to evaluate your immediate surroundings, keeping in mind that relocating to an unfamiliar place in unstable times is a risky proposition. It's a difficult problem; not impossible, just tricky, and there is no approach that's guaranteed to work.