A house is a reasonable asset to own during times of (hyper)inflation. Many people across the globe got their house for free basically during the seventies. Ofcourse true hyperinflation is something else because of it's destructive influence on society in a wide number of fields possibly influencing the attractiveness of owning real estate.
I think Wilburbear's take on housing during a hyperinflation is actually correct even though it may seem illogical. Basic needs would inflate the most and be the first priority, thus almost all of one's income or cash would be dedicated to survival first. Considering the massive glut of houses still unsold, for sale or rotting away, there is still far too much supply for housing to benefit from hyperinflation, imo. One could even argue that housing has already experienced the "hyperinflation" during the late 90's thru 05 or 06. One last thing worth mentioning about the potential for hyperinflation benefiting housing prices. Don't forget that if prices started to climb again as they did over the past decade, that all of these bankrupt local governments would increase their take via property taxes.
I agree, but what if the banks plow these houses under rather than flood the market? a cash for clunker houses, perhaps? Also, how do you avoid property taxes? a tent comes to mind... I'm not sure you can avoid the upcoming increases in property taxes by renting rather than buying.
I understand this, but if the economy is going to hell in a handbasket, I want to be assured I have a roof over my head. It's almost impossible to have a paid for house and live in poverty.
kana, you're a real piece of work. I understand what hyperinflation is, but hard assets such as real estate will increase in value during hard times. Regardless of how much gold you own, you will still need a roof over your head.
Agree, that would be the last step, to demolish all of the existing unsold homes. There is some evidence it has already started in parts of California, I saw a few articles about it last year. Well, as far as cash for clunker houses goes, they already have all of these federal programs in overdrive to attempt to "fix" housing prices or stop the rate of decline. The fly in the ointment has obviously been banks which are reluctant to foreclose and a growing percentage of the population declaring themselves squatters with rights. I wasn't implying that one could avoid property taxes. Instead, I was arguing that rapid inflation of housing price values would also include rapid re-assessments of property values and much higher property taxes. Many states are bankrupt and the unions seem to have bought the system, so the required funding for all of these legacy costs need to be paid somehow. Most notably via property taxes. I also don't believe landlords have a whole lot of pricing power in this environment. With tons of failed condominium projects, empty houses, apts, etc, etc...I get the feeling that renters still have the upper hand.
you didn't severely insult me back so I'll give you a real advice Having lived through Dinar hyperinflation (I lived in of those Baltic states) As money turns into worthless paper, gold literally skyrockets in value. And price of all real estate loses 90% of value. if you had the foresight to convert house into gold and you can buy 10 houses at the end of hyperinflation so instead of 1 house in which you live you can have 10 this is very rare for people to do because human mind simply can not let go but I've seen neighbors who were smarter than me and did exactly this in 1991
I don't think this monetization is as bad everybody thinks. Treasuries are essentially cash with interest attached. other countries and large corps. use treasuries to buy arab oil Banks use treasuries as reserves for loans they trade the same as cash for big institutions would it be any different if these were dollars. And if inflation was to surface you could always deleverage the banks and hedge funds. knock down the reserve ratio and there you go