[Newfie]

Coming home from a chore yesterday I commented to the Wife I could see 5 skyscrapers under construction. Some modest but one to be the tallest building in Philadelphia housing 25,000 Comcast workers.

We put up an apartment for rent and it was taken in a week. 1 br 1 bath, 3rd floor walk up, $1,400/month. Another lady could not take it because she needed to move in by Feb. 1. This was JAN. 28? That now seems typical, people wait to the last minute to rent.

Our Daughter was looking to buy a house, but it got too much for her, understandable, right out of college trying to get settled. But I was helping her look. Most of the adds I saw, for 3 bedroom starter homes in the city, row houses, maybe 70 years old, were slanted towards investors, not home owners.

We get a lot of mail from real estate investors wanting to buy our house. But I did the math and I make a lot more in rents than I could possibly do in investments. That will be true even carrying a mortgage (for 2 more years) and paying a property manager, which we will have to do when we move into the boat.

I think investors are skittish and are looking for some tangible form of investment.

OTOH, boat prices are down and several makers are in trouble or already bankrupt. I don't know for sure but I believe that mega yacht sales are firm. A while ago I heard that worldwide mega yacht yards had backlogs. Now I think some, maybe most, of these yachts go into charter for tax advantages if nothing else. It's still a pile of money on conspicuous consumption.

I'm not making any predictions here, just reporting what I see.

[Outcast_Searcher]

I am still convinced everybody has an inflated paper wealth.

Why? This seems like wishful doomer-bubble thinking to me.

If the scenario is we're going into deflation, then the supposed hoards of folks who are scared out of the market and hoarding lots of cash should do well as deflation continues (assuming modest deflation and not a hard crash). So how do they have "inflated paper wealth". This includes lots of older people and lots of young people who fear the market for different reasons.

Or you have the coward (or practical investor, I'm not sure which) like me who has an extremely balanced portfolio, including LOTS of near-cash, well diversified assets by country, industry, asset class, etc. So almost any economic scenario I can envision, some assets will be helped, and some assets will be hurt. The idea is to prevent anything from crashing most/all of the assets, including deflation.

And most of all, you have the masses, who essentially have NO paper wealth, since they don't save anything and live paycheck to paycheck. This includes a HUGE proportion of first worlders. How do THESE people have inflated paper wealth.

How you are convinced that "everybody" is in the same boat financially is completely beyond me.

[Outcast_Searcher]

The billionaire developer went belly up his development got sold off for less than half price his dream of a 6 star resort remains a dream.

No citation. No hint of who or when or where or why. Great information. Is this a parable, perhaps?
Meanwhile in the real world of the US, both housing and apartments are fetching higher prices overall, year after year. Kind of flies in the face of the idea that people can't afford gasoline at well under $2 a gallon.

[Shaved Monkey]

Over stretched I would imagine.
He had a few projects on the go around Australia(possibly the world, he lived in LA for a while) and the financial crash came.
He sold out,packed up and left town.
The families been into property development since the 1800s
Not going to mention names/places they are well known and will probably sue.
Other multi-millionaire developers have lost their shirts here too.
When dreams of 5 million dollar apartments didn't sell fast enough for the banks to be happy.
even several hundred thousand dollar apartments didn't sell fast enough for others.
It all depends on how your geared as to where your tipping point is.
The promised Airport didnt get built or maybe it was never going to be built, just bait to attract apartment buyers.
All that white shoe brigade fantasy is now gone, large tracts of land, mothballed for large retail corporations in the future have been sold off.
Most of the true locals are happy, the shop keepers,business owners and investors are not.
Life goes on.
Paradise wasn't over exploited.....yet

[sidzepp]

Florida panhandle here.
Three forces that fuel the economy here. Military spending, retiree spending, tourists.
Military is working overtime now (wonder what's up?) More defense contractors. Tourists numbers are dropping and those that are coming are spending less. Retirees are nervous with the state of their investments.

[dolph9]

When I say that paper wealth is not what people think it is, I am referring to the mispricing of everything in our current debt fueled world, with the consequent serial asset price bubbles and collapses.

I'll use one example out of many. Suppose you have a house 10 years ago which was new, valued at $100,000, and now it's ten years old, and it's valued at $200,000. Now, if you are a defender of the system or owner of the home, you will defend this currency valuation. You will put forth all of the usual arguments, supply/demand, etc. But what you fail to see is the credit inflation, and how this is creating an artificial price and a home that actually should deflate in value, the older it gets. You fail to see how inflation masks what really is decay, how no price can rise forever, which is a pathetic attempt to overcome thermodynamics.

According to your logic, we should all want to be decrepit 95 year old billionaires. Because we would have a billion dollars, and that billion dollars would buy us youth and eternal life!

Starting to get the concept now? Are you starting to see the flaw. You cannot value anything by its currency value alone, you have to look at the object itself.

Do I know what the value is? No, but I can pretty confidently say that no price will rise to infinity, no human being will live forever, all resources of the world are finite, humans are tribal and territorial creatures who fight each other for control, etc. I can say each of these with pretty much 100% confidence.

But none of us actually thinks we are going to experience the big one...the collapse of the entire dollar based system, until it hits. And then when the paper wealth disappears you have revolutionaries in the streets, followed by totalitarianism and war.

History of our species, really.

[Newfie]

Dplph9,

Much I agree with in that post.

[Shaved Monkey]

These 10 French castles are cheaper than Sydney units (condos/flats)
The perception of value money, wealth, asset is mad.

http://www.news.com.au/finance/real-est ... 181142d49f