Massive American Debt! (Cheap Zingers )

Massive American Debt! (Cheap Zingers )

I don't generally like situations where "the jokes just write themselves." Those types of conjunctures make everyone sound like a gifted satirist. One of my former employers made a career out of telling obvious jokes about the economy in an (ultimately successful) bid to make market participants believe he was clever. What he lacked in real analytical skills and writing ability he more than compensated for with a kind of relatable bitterness towards... well, towards anyone and everything, reall
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7 thoughts on “Massive American Debt! (Cheap Zingers )

  1. As much as I would like to join the bubble parade I cannot. This price increase in housing was 12 years in the making. Prices lagged, as did housing starts. And the demographics are favorable too. Can I envision prices flat for 4 years? Sure. A price collapse? Nope.

  2. Great read as usual. I am not concerned if household debt is increasing mainly thanks to banks originating more mortgages. Real estate value should keep pace with inflation and so long as most home owners do not abuse home equity lines of credit to buy crap, mortgage debt should be about the best kind of debt US homes can have in this environment. I refinanced my main property recently and have a home equity line tagged to the Fed’s rate (so it’s not going up any time soon), making lower payments in a depreciating currency to a bank while my real asset increases in nominal value is as good as capitalism can get in my opinion. If household debt was increasing because of credit card or student debt then I would be feeling the tingles of fear. Anyway, as soon as mortgage forbearance expires I plan to look for a second home as an investment, no mortgage this time though, I’ll pay for that sucker with debased fiat which I will get from selling crypto (a digital asset!), unless Warren and Gensler really spoil the party before then, in which case I might sell my over valued home and move to tropical El Salvador.

  3. The problem with living in just one house all 12 months of the year, no matter how beautiful the view, (assuming one has excess cash), is that it is very difficult to find a place with an ideal climate during all 12 months. Too damp/rainy, too hot/humid, or too cold/gray are the main culprits during a too significant portion of the year.
    If one can easily take some money out of the market and buy additional homes, it might be a better way to enjoy wealth (vs. looking at a number on a screen representing one’s wealth).
    Hopefully, the sum total of the additional home(s), along with the original home, provide a great climate to live in year round. Moving from home to home, for a few months at a time is very feasible for the “work from home” crowd- especially if one home is in a no income tax state – where one might be able to establish a “primary domicile” for state income tax purposes.
    I still say “no debt” as a hedge to one who might have a bit of “key man risk” related to their income stream.

    1. Here is the zinger- if any/all of those homes are in a sought-after vacation location, and one has a place to lock up some personal possessions, one can rent out the home when they aren’t using it, to cover fixed costs. If you are willing to give up 25-40% of the rental income, one can find a good agent to deal with all of that. It might not be great to leave homes empty for extended periods anyway.

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