Americans Collectively Owe Almost $1 trillion in Credit Card Debt.

How is it not true?
Renting you get what in the end?
Owning/mortgage you have something to sell in the end.

I suggest you redo your math..

Inflation does cause price increases, it is not the only cause though.
Pesky things as workers demanding raises no matter how good they have it increases prices as well

Do you think construction workers would work for the same was 10 years down the road and be happy?.

 

An ARM is not every single loan now is it? I would never get an ARM, a low fixed rate however is a different story.

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You appear to be confusing those who can afford a home with those who can not. Those who can afford a home makeout in the long term with home ownership. Those who can not afford the home lose the home. That however is the same with anything, if you can not afford something you should not get it.

 

Come on, man....take an investing or real estyate class or something. That's just ridiculous!!! That might make sense if houses were built in your imagination and didn't actually occupy space.

You should always diversify your investments. But gold and silver are (inflation) hedges nothing more.

 

EXACTLY!!! What people fail to notice is that they are taking advice from someone whose very existence depends on your interest (bank), HUGE sales commission (realtor) and local government (inflated property taxes). I would NEVER EVER NEVER take their advise. I can only trust myself and of course a calculator. If you are good at math most likely you will end up on top of things.

 

BTW this is the type of discussion I like. People here are agreeing on many things, then disagreeing on others.

So much nicer than the common place 'you're either on my side or against me' that a few of this forum appear to hold onto dearly

I don't take anyones advice but my own as well

 

You may not own the property by renting, but I would rather get evicted from an apartment than lose my house.

Alright, explain why houses today are way more expensive than they were in the 1920s. Also, explain why computers today are cheaper than they were in the 1980s.

 

How are you paying for an apartment, and still saving enough to buy a house with cash, unless you are already making enough to just buy a house with a really short term, low interest loan that you can pay off in a year?

For most people, that rent check is what they WOULD save for a house.

 

No. Go buy a book!

 

I wouldn't listen to anything the banks tells you. I know from first hand experience, behind closed doors, the only think we talked about at Wells Fargo is how to put people in debt.

The reason for that is simple.........when you're in debt to the bank, you're a slave to the bank.

 

No, back up your statement with facts so everyone here understand what you're saying. Please prove me wrong right now.

Crazy Rob, no one here will believe you if you can't answer my question. Why were houses cheaper in the 1920s then they are today? Why were computers more expensive in the 1980s than they are today?

I already know the answer, I just want to read what you have to say.

If you save a large enough percentage of your income, like 30% to 40%, in about ten years, you should have enough to buy a house in cash if you make the income of the average American. This means if you start saving for a house when you get your first job at 16, by 30 you should have enough to pay for it in cash.

You are right about inflation, but with gold and silver, you beat inflation. Crazy Rob says that Gold and Silver a just "a hedge." It is far more than that. Gold and Silver is the money we should be using, instead of paper dollars.

Do you know why? Because if we were using Gold and Silver instead of Federal Reserve notes, aka dollars, then the prices of goods and services would be stable, and balanced to the "true" value of those goods and services.

Gold and Silver are honest forms of currency. Paper money is dishonest, and leads to poverty over time!

 

Rent prices are at an all time lows while mortgage payments are at an all time high. Would you rather pay $1,900 a month for a place you own right now or $800 a month for a rental?

Find a rent versus own calculator and you can come back and tell us your findings. Keep in mind we are on a downtrend in RE so it might take at least 5-6 years for the market to start climbing.

 

That is a preference, not anything more, especially not what will make you $$$ in the long term.

Couldn't have anything to do with much of the computer equipment coming from overseas coud it? Small computer parts do not take up land, are also made by low cost employees. Assembly lines become MUCH more efficient, not just slightly more efficient like housing.

Technology type goods also are bought by people non stop, over and over again, not like houses which are a rarity on the buy/sell portion of a persons lifetime purchases/sales.

Houses take up actual land, computers do not.

Technology is totally different than housing, I honestly am dropping my draw at you trying to make a comparison.

I am not the one to explain this, I can admit that right off the bat. It however is pretty easy to see there is a huge difference between the two. How to explain it though, is a bit more complicated than simply seeing it for what it is. Not even remotely closely related.

 

Ok, dude! ha ha ha!

 

Not sure where you get your numbers from but a crappy apartment around here is about $750, a nice one easily in the $1,000.00 mark or more.

My house doesn't cost me anywhere near $1,900.00 a month, and that includes the $4,000.00 in taxes, insurance, utilities, etc.

Once I refinance it will be about $1,200.00

Ghee an apartment for about $1,000.00 or my own place for $1,200.00

Not much of a choice IMHO

 

You're trying to compare real estate to retail, and you are demanding clarification?

 

Well, Grim at least you're trying, unlike Crazy Rob, who just tells me to buy a book. I would first like to say that you've made good points. Houses take up land, and people don't buy them every day, so they would naturally be more expensive than any computer.

But, there is a reason why houses today are more expensive than they were in the 1920s, and the answer is inflation. The American dollar today is weaker than it was in the 1920s, which means it takes more dollars to buy a house than it did in the past.

It should not be this way. Houses today should either be the same price as they were in the 1920s, or be lower in price, provided methods and cheaper materials have been found to build them. But instead we see the price of just not houses going up, but just about everything else with the exception of computers.

If America truly had a strong economy, everyone should be able to save for a house rather than borrowing from a loan. The fact that we have to borrow tells me we're in a lot of trouble.

I don't think it is a ridiculous question to ask. The house and computer are both products. Labor has to be put forth to construct both. If it took longer to build a house in 1785 than it did in 1985, that means that the house in 1785 would have been more expensive, because it would have taken more time and effort to build that house.

In 1985, new machines could be used to quickly build the house in a fraction of the time it took to build a house in 1785. This means, in theory, the 1985 house should be cheaper, according to the labor theory of value in economics, which I posted a link to yesterday.

 

Mortgage payments should always be at an all-time high. It's defaults and foreclosures that should be avoided.

 

I am totally in agreement on the falling dollar, I do however think there is more to it than just that

 

The UK is in a similar position too from what I've gathered - debt just seems to be something people were less scared of than they were a couple of generations ago.

 

Do you know how much of that is interest and how much principle? Take your interest payment and multiply it by 12 than add your taxes and give me a total amount, you will find out that that your total amount that you will have paid out will be about the same what you would have to pay to rent. Now their is some benefits to owning and renting, you need to choose which makes more sense. I own and rent right now. The benefit of me renting is that I live on an amazing 2/2 condo on the water for a ridiculous price and I can just get up and move if I wanted, so flexibility. Now on my house if I wanted to liquidate my equity I would need to sell my house so I would need to sell in this market which is crappy, so no flexibility and I am forced to make house payments until I can sell (for a reasonable profit). What all of us need to accept is that the whole country has a negative equity right now so you will start feeling it in everything in life. From the price per gallon of milk, to the price of gas, to the value of your currency and everything else. You need to understand that the economy is in trouble and it is the principle concern right now.