In the middle of real estate bubble burst and banking collapse how do you protect yourself against deflation?
Peter Oberois
Feb. 18, 2007

Real Estate is collapsing from ground up. The mortgage defaults are skyrocketing. Many household who took equity out from home various purposes are paying their massive first, second, third mortgage and line credit interest by borrowing more from their home and personal loans.

The biggest problem lies with the investors who are stuck with ten or twenty homes!

Excessive public and private borrowing is the root cause of deflation out there. The banks have started realizing what they have done. No only some of their techniques will be reclassified as predatory lending, many of them will fail and go belly up in the next five to seven years.

In the middle of all that the world will continue to exist. All of us will have to continue to enjoy our lives? But how can we cope up with mistakes made by politicians, banks, financial institutions and others?

Deflation is nasty. Once the spiral starts, it is very difficult to end it. The public and private debt burden makes it almost impossible to get rid of deflation unless there is total financial meltdown and things get restarted all over again.

The situation is worse that 1929 because those days, derivatives did not control financial markets, hedge funds did not decide where Dow will open tomorrow and Government budget did not depend on how much borrowing can be made.

In order to cope up with the situation, one must reduce their personal debt levels. Cash is king in this kind of environment. US economy will register negative growth but will be far better performing that the rest of the world. As a result Canadian Dollar and US are the best currencies in that environment. Bond will go up dramatically although at some point of time it will crash as Asian central banks opt of US Dollar asset redemptions. But the bonds will recover again as only 5% of the Treasuries are in Chinese hands.

In the middle of real estate bubble burst and banking collapse how do you protect yourself against deflation?
Peter Oberois
In the middle of all that the world will continue to exist. All of us will have to continue to enjoy our lives? But how can we cope up with mistakes made by politicians, banks, financial institutions and others?
READ MORE>>

Actions of Treasuries and Dollar point to deflating economy and underemployment are changing into unemployment
Nina Malone
The businesses have started shrinking their work force again. Online business is gaining momentum and traditional businesses are replacing non-managerial workers with automation. The underemployment is slowly changing to unemployment again.
READ MORE>>

Dow 20,000 and 5000 – which one first?
Sam Adelton
People who are loosing their jobs have lived on their severance packages, 401(K) and finally borrowed against their home equity. They have started their own business to make sure their future is not affected. Small businesses need nurturing before....
READ MORE>>

Buy gold sell REITs: this can be new technique in the market place
Joe Weinman
The trick in this strategy is that you must know when gold and REITs will start moving in tandem. That will happen in the future when deflation is well established. The stagflation at this time is slowly getting converted into deflation.
READ MORE>>

MORE ARTICLES >>