The Crash Of 2008?

DOCTOR HOUSING BUBBLE looks at Client No. 10 and the Crash of 2008 compared to the Crash of 1929. Read this great post by Doctor Housing Bubble. The Spitzer Splatter, Client No. 9, was much more fun for anyone following the news. I agree with the Doctor’s conclusion, but not his analysis. There is a big bad bear recession headed our way.

OMB testified before the Senate Budget Committee broadcast on C-SPAN last week that 50% of the national debt is owed to foreigners; 20% of mortgage backed securities were owned by foreign entities, and over 20% of the state and municipal bond market has been owned by foreigners. As US interest rates are lower, and the dollar declines foreign individuals and entities are fleeing the dollar in favor of gold, commodities, oil futures, the Euro, and local currencies around the word.

For the first time in US history the economic destiny of the US is in the hands of foreign entities and individual making independent economic decisions. If the dollar melts down dramatically inflation will increase because our dollars buy fewer consumer goods made overseas while at the same time the economy is in recession. Asset bubbles will occur as foreigners flee the dollar. The Federal Reserve may have a difficult time keeping enough money in circulation to run the economy, and at the same time keep interest rates down. The recession is likely to be a big bad bear market for real estate and employment. This will add to the real estate wows we have already.

Being a Mountain Man from the Rockys, I’ve seen market Grizz bars a’fore, an’ I kin’ skin Grizz. But I can tell ya it can get ‘citin’ and it ain’t no fun ‘tall.

Follow McMurdie’s Real Estate Rule No. 31: in a recession/depression sell everything you don’t intend to keep; work hard an’ don’t mind a little grit in your teeth; save your cash; don’t borrow money; be charitable to those people who are wiped out, unemployed, have no home, or no money, and when the bottom hits buy all the real estate you can lay your hands on!

I ‘ll let you know when it is time to buy.

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