skunkape
Paranormal Maven
No tax dollars for ATM's. That's just gross.
-
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Splain this to me!
- Thread starter tyder001
- Start date
Free episodes:
skunkape
Paranormal Maven
Where is this magickal place? Can you grow cannabis on your own property without having to shoot a bunch of pigs?
skunkape
Paranormal Maven
DamnDirtyApe
Skilled Investigator
The economy can "fall apart" in a few different ways - One way would be for the dollar to become debased through further inflation, the economy could contract into a massive depression (in which case all asset classes would fall in price) or there could be a "SHTF" Shit Hits the Fan total collapse scenario with food shortages, martial law, etc.
The reason people like gold is that is has been ackowledged by the world as a store of value for thousands of years. Dig up an old sunken ship from the 1800s and the gold in its treasure has retained the same value as it did when it sunk. The paper money used back then is now worthless. Three thousand year old gold is as good as new, whereas paper money all eventually becomes worthless.
Throughout history, all governments (as in ALL, every single one) have used debasement of their paper currencies as a way to pay for ever expanding debt. Inflation started back in ancient Athens by mixing cheap metals into gold coins) Rome blew up their economy through debasement as well.
So the inevitable course of money (especially paper "fiat" money not tied to a tangible asset) is to lose value over time until it is replaced by something else. The Pound Sterling has lost 98.6 percent of its purchasing power since its inception in the late 1600s. The US dollar has lost 98 percent since the year 1900.
Thus the dollar will continue to decline in value as it has over the past 100 years. In fact the first currency we printed - the Continental - became worthless through debasement. Thats why the US constitution declares that ONLY gold and silver be used a form of money. But of course the government got around that with the Federal Reserve Act. Thanks to Nixon in the 70s, the US dollar is now backed by nothign more than America's "good credit and reputation" LOL.
So why gold and silver? Simple - they do not change in value against other asset classes, rather they remain constant over the long term. What people perceive as an increase in the price of Gold/Silver is, over the long run, simply a function of the debasement of a currency. That sounds hard to weird, but its true - an ounce of gold in 1900 had the same purchasing power as it does today. But through inflation (printing of excess amounts of currency) it takes more "dollars" to buy that same ounce of gold today.
In a true, world ending SHTF scenario, gold might not be immediately useful (Although in other examples of economic collapse around the world through war or famine gold has always been valued. Especially when a currency collapse is the cause of the problem)
But once we move beyond a "hide in your bunker" phase back to a semblance of normal trade and commerce, history shows gold will again become useful as a store of value and a unit of money.
Personally, I think it's wise to have as many bases covered as possible for anything from a terrorist attack to a natural disaster (earthquakes where I live) That means a firearm or two, ammo, cash, food and water and supplies (batteries, toiletries etc). We do have a lot of gold and silver bullion as well because I know that the long term value of fiat "dollars" is to go to essentially zero and my gold/silver bullion carries no counterparty risk.
When a currency gets weaker you do not want to have your wealth locked up in it. Gold/Silver or other strong currencies will be insurance. It's hard to say exactly what currencies will grow stronger since ALL the of the world uses various forms of fiat money.
Due to short term factors such as deleveraging, margin calls, foreign capital flight etc. the dollar could continue to remain strong relative to other currencies in the short - mid term. For the past 4 or 5 years the real estate market in the US was in a bubble that is now popping. Eventually prices will fall back in line with per capita income and other general asset classes. Actually, over the long term, all the asset classes generally track each other within a narrow band, In the short term they will fluctuate and bubbles will form, but eventually that bubble pops and returns to the normal range.
By the way, most people don't realize this, but even before the recent crash the DOW had DECREASED in value over 9 years since the year 2000 when measured in inflation-adjusted dollars. Large stock market numbers do not mean anything unless measured against inflation. The stock markets have been in a bear market for 10 years, but because inflation has jacked up the nominal prices, most people think the opposite.
DamnDirtyApe
Skilled Investigator
The economy can "fall apart" in a few different ways - One way would be for the dollar to become debased through massive inflation, the economy could contract into a massive depression (in which case all asset classes would fall in price) or there could be a "SHTF" Shit Hits the Fan total collapse scenario with food shortages, martial law, etc.
The reason people like gold is that is has been ackowledged by the world as a store of value for thousands of years. Dig up an old sunken ship from the 1800s and the gold in its treasure has retained the same value as it did when it sunk. The paper money used back then is now worthless. 3 thousand year old gold is as good as new, whereas paper money all eventually becomes worthless.
Throughout history, all governments (as in ALL, every single one) have used debasement of their currencies as a way to pay for ever expanding debt. It started back in ancient Athens by mixing cheap metals into gold coins) Rome blew up their economy through debasement as well.
So the inevitable course of money (especially paper "fiat" money not tied to a tangible asset) is to lose value over time until it is replaced by something else. The Pound Sterling has lost 98.6 percent of its purchasing power since its inception in the late 1600s. The US dollar has lost 98 percent since the year 1900.
Thus the dollar will continue to decline in value as it has over the past 100 years. In fact the first currency we printed - the Continental - became worthless through debasement. Thats why the US constitution declares that ONLY gold and silver be used a form of money. But of course the government got around that with the Federal Reserve Act. Thanks to Nixon in the 70s, the US dollar is now backed by nothing more than America's "good credit and reputation" LOL.
So why gold and silver? Simple - they do not change in value against other asset classes, rather they remain constant over the long term. What people perceive as an increase in the price of gold/silver is, over the long run, simply a function of the debasement of a currency. That sounds hard to weird, but its true - an ounce of gold in 1900 had the same purchasing power as it does today. But through inflation (printing of excess amounts of currency) it takes more "dollars" to buy that same ounce of gold today.
In a true, world ending SHTF scenario, gold might not be immediately useful (Although in other examples of economic collapse around the world through war or famine gold has always been valued. Especially when a currency collapse is the cause of the problem)
But once we move beyond a "hide in your bunker" phase back to a semblance of normal trade and commerce, gold will again become useful as a store of value. I can't imagine a scenario for when having a huge amount of gold or silver would be seen as worthless (except perhaps after an extinction level disaster such as a gamma ray burst or giant meteor hitting Earth.)
Even if it never came to that, you do not want to have your wealth locked up in dollars if we suffer heavy inflation. Gold/Silver or other strong currencies will act as insurance. It's hard to say exactly what currencies will grow stronger since ALL the of the world uses various forms of fiat money.
Keep in mind that due to short term factors such as deleveraging, margin calls, foreign capital flight etc. the dollar could continue to remain strong relative to other currencies in the short - mid term. For the past 4 or 5 years the real estate market in the US was in a bubble that is now popping. Eventually prices will fall back in line with per capita income and other general asset classes. By the way, most people don't realize this, but before the recent crash the DOW has DECREASED in value over 9 years since the year 2000 when measured in inflation-adjusted dollars. Large stock market numbers do not mean anything unless measured against inflation. The stock markets have been in a bear market for 10 years, but because inflation has jacked up the nominal prices, most people think the opposite.
Personally, I think it's wise to have as many bases covered as possible for anything from a terrorist attack to a natural disaster (earthquakes where I live) That means a firearm or two (minimum of a 12 gauge shotgun), ammo, cash on hand, food and water and supplies (batteries, toiletries etc). We do have a lot of gold and silver bullion as well because I know that the long term value of fiat "dollars" is to go to essentially zero and my gold/silver bullion carries no counterparty risk. Doesn't mean you have to live in a bunker or anything kooky - just be prepared with food and water for a few weeks and be able to get by without access to an ATM or store.
wouldnt it have been cheaper to simply pay the tax bill, rather re purchasing the whole house back ?
we have "land tax" here but only on propertys worth lots of money, the average house owner does not pay any. i dont.
i pay council rates, which pays for the garbage collection, kerbside recycling and the dog catcher etc etc etc.
down here if they do seize your home/land for outstanding tax or council rates, they have to sell it at auction, and pay you back the money from the sale (less the debt of course).
most people if this sceanrio is unavaoidable choose to sell their house, and downsize or move to the country, where some small towns wanting new blood are giving houses away or selling for a nominal value such as one dollar.
i still cant accept that your govt can seize a property worth a million dollars to pay a tax debt of 20k, and take the lot.
down here that scanario would see the hapless home owner get $980,000 back .
T
Tommy Allison
Guest
Um, that's where you're wrong.
You don't own anything in this world. If you own your land free and clear, if you don't pay your property taxes they'll take your land from you. By Force.
If you don't title or license your car, they can come take it out of your driveway if they deem it an eyesore. They can come collect any debt you owe on your credit cards, by confiscating the property bought with it if they so choose if things get bad enough.
What people do not understand is that nobody owns anything in this world that someone else can't come and take away.
The only thing you own, is your mind, and even then it's not really yours because of what you fill it with.
you cant take it with you, so in that sense you dont own anything.
but while you live your choice can make a difference to how you live.
lets take two ppl both 20 years old, one rents a house for $250 a week, the other takes a mortgage for $300 a week.
25 years later the mortgage owner pays out the loan, and gets what is essentially a $300 a week payrise.....
the renter keeps paying, approx $260,000 in rent from age 45 to age 65, and at 65 one person has been enjoying an extra $300 a week in their paypacket for the last 20 years, and has a valuable asset worth hundreds of thousands, the renter has been paying $250 a week for the entire period (an extra 20 years on the landowner) and has no asset to show for the money.
renting doesnt save you from the property tax scenario, the landlord might default on their taxes, and have the property seized........
i like to compare it to non monetary situation, that of the salmon and the stream.
you swim against the streams current for as long as you can work and make money, when you cant you get washed away, but if the salmon can find a pool in the waterway it can stop swiming against the current and just float, owning your own home is like creating that pool.
it allows you to eventually stop struggling against the stream and use that energy for other purposes.
its true you dont own anything, because you cant take it with you, but you can use the game, to secure a better quality of life.
as the above scenario shows at 45 years of age, the landowner gets a $300 a week payrise, and can sell the property and travel the world before buying into the retirement village of choice.
the renter will likely end up in a one room govt hostel when they are too old to work
but while you live your choice can make a difference to how you live.
lets take two ppl both 20 years old, one rents a house for $250 a week, the other takes a mortgage for $300 a week.
25 years later the mortgage owner pays out the loan, and gets what is essentially a $300 a week payrise.....
the renter keeps paying, approx $260,000 in rent from age 45 to age 65, and at 65 one person has been enjoying an extra $300 a week in their paypacket for the last 20 years, and has a valuable asset worth hundreds of thousands, the renter has been paying $250 a week for the entire period (an extra 20 years on the landowner) and has no asset to show for the money.
renting doesnt save you from the property tax scenario, the landlord might default on their taxes, and have the property seized........
i like to compare it to non monetary situation, that of the salmon and the stream.
you swim against the streams current for as long as you can work and make money, when you cant you get washed away, but if the salmon can find a pool in the waterway it can stop swiming against the current and just float, owning your own home is like creating that pool.
it allows you to eventually stop struggling against the stream and use that energy for other purposes.
its true you dont own anything, because you cant take it with you, but you can use the game, to secure a better quality of life.
as the above scenario shows at 45 years of age, the landowner gets a $300 a week payrise, and can sell the property and travel the world before buying into the retirement village of choice.
the renter will likely end up in a one room govt hostel when they are too old to work
DamnDirtyApe
Skilled Investigator
A few points:
Gold and Silver Bullion are as close to "wholly owned" as possible because you pay no license fees or taxes on it until you sell it. Sure if you go bankrupt it can be seized just like any other asset, but there is no "maintenace" cost to holding onto your own bullion and you don't have to worry that the someone is going be insolvent when you try to convert your bullion into the latest currency. There is no counterparty risk.
As for renting vs owning, keep in mind that a smart use of money when renting over saving is to invest the difference. Sure if you simply pisss away that 50/week you are going to lose in the long run. But say for example that you took that 200/month and invested it an asset class that going through a long term bull market such as commodities or oil. You will end up far richer in 20 years than if you had simply tied up everything in real estate if the real estate market is in a bearish phase. Each asset class will have bearish and bullish movements that last for decades. A person wants to be out of a class that is stagnant and in one one that is bullish.
For example if you went out an bought a house in 2007 in a bubbled area like LA or Phoenix, you would now likley be FAR upside down, and will have to wait many years before you make up the difference, let alone make a large profit. Over the long long haul, housing markets track other asset classes and any money invested in one class will roughly track the others. Your house may now sell for twice what it did in 2000, but gold has tripled since then. It's all about bull/bear asset market trends.
There is a time to own and a time to rent, a time to be IN the markets and a time to be OUT.. same thing for gold, energy,currencies, commodities etc. Unless you are a professional trader, the best you can hope for is to hitch a ride along a bullish asset class and ride it up for while then hop off when it bubbles up to a breaking point. It's not easy, but that's how guys like Warren Buffet, Jim Rogers, and George Soros made billions -solid, core positions in a bullish asset class (or shorting stocks/currencies in a bearish class like Soros did)
My wife and I are currently renting and will continue to do so for a few more years until I am convinced that prices have stablized. We looked at buying back in 2005 but even then housing prices in LA and Phoenix were getting silly. Due to cheap easy credit, people who had no business buying houses at all were getting sucked into the lure of easy money. It just didnt add up at a gut level - how could people making 75k buy an 800k or more house? Something just didn't make sense. rather that try to time the markets by risky flipping or whatever, we chose to simply wait it out and rent. Houses in our neighborhood are now up 250K or more lower in price that in late 2007.
When you see shows on TV called "Flip This House" you know the end of the bubble is near. Reminds me of something I read about the great stock market crash of 1929 - a banker who was heavily invested in the markets (but sold out his positions just in time) recounted how one day he went to get his shoe shined and his shoe-shine boy was giving out stock tips! He realized then the bubble was sure to burst soon.
Gold and Silver Bullion are as close to "wholly owned" as possible because you pay no license fees or taxes on it until you sell it. Sure if you go bankrupt it can be seized just like any other asset, but there is no "maintenace" cost to holding onto your own bullion and you don't have to worry that the someone is going be insolvent when you try to convert your bullion into the latest currency. There is no counterparty risk.
As for renting vs owning, keep in mind that a smart use of money when renting over saving is to invest the difference. Sure if you simply pisss away that 50/week you are going to lose in the long run. But say for example that you took that 200/month and invested it an asset class that going through a long term bull market such as commodities or oil. You will end up far richer in 20 years than if you had simply tied up everything in real estate if the real estate market is in a bearish phase. Each asset class will have bearish and bullish movements that last for decades. A person wants to be out of a class that is stagnant and in one one that is bullish.
For example if you went out an bought a house in 2007 in a bubbled area like LA or Phoenix, you would now likley be FAR upside down, and will have to wait many years before you make up the difference, let alone make a large profit. Over the long long haul, housing markets track other asset classes and any money invested in one class will roughly track the others. Your house may now sell for twice what it did in 2000, but gold has tripled since then. It's all about bull/bear asset market trends.
There is a time to own and a time to rent, a time to be IN the markets and a time to be OUT.. same thing for gold, energy,currencies, commodities etc. Unless you are a professional trader, the best you can hope for is to hitch a ride along a bullish asset class and ride it up for while then hop off when it bubbles up to a breaking point. It's not easy, but that's how guys like Warren Buffet, Jim Rogers, and George Soros made billions -solid, core positions in a bullish asset class (or shorting stocks/currencies in a bearish class like Soros did)
My wife and I are currently renting and will continue to do so for a few more years until I am convinced that prices have stablized. We looked at buying back in 2005 but even then housing prices in LA and Phoenix were getting silly. Due to cheap easy credit, people who had no business buying houses at all were getting sucked into the lure of easy money. It just didnt add up at a gut level - how could people making 75k buy an 800k or more house? Something just didn't make sense. rather that try to time the markets by risky flipping or whatever, we chose to simply wait it out and rent. Houses in our neighborhood are now up 250K or more lower in price that in late 2007.
When you see shows on TV called "Flip This House" you know the end of the bubble is near. Reminds me of something I read about the great stock market crash of 1929 - a banker who was heavily invested in the markets (but sold out his positions just in time) recounted how one day he went to get his shoe shined and his shoe-shine boy was giving out stock tips! He realized then the bubble was sure to burst soon.
its definatly something you have to figure out using local data, renting can be a better option in some cases.
the point about investing the difference has merit, but i wonder how many people who rent also do that.
on the subject of the Govt seizing your land, or the idea that failing to pay your land tax means you loose everything......................
http://en.wikipedia.org/wiki/Eminent_domain
im seeing the words
"...nor shall private property be taken for public use, without just compensation".
in the US constitution.
the point about investing the difference has merit, but i wonder how many people who rent also do that.
on the subject of the Govt seizing your land, or the idea that failing to pay your land tax means you loose everything......................
http://en.wikipedia.org/wiki/Eminent_domain
im seeing the words
"...nor shall private property be taken for public use, without just compensation".
in the US constitution.
CapnG
Devil's Advocate
The government gets to decide what qualifies as "just compensation" though and you have no recourse save costly, time consuming legal trials which you would most likely lose (or go bankrupt pursuing).