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an economist

An economist you say?

How about Ben Jones
http://thehousingbubbleblog.com/

An how about Tyler Durden (A pseudonym, duh, but I think it would be hilarious to see the ZH response to our questions)
http://www.zerohedge.com/

Last but not least, George Ure, who is about 20% genius, 60% eh, and 20% nuts?
http://urbansurvival.com/week.htm

Thank you. I started investigating the housing issues facing us back in 2005 when my wife and I were considering moving up in home. Needless to say, we were floored by the price increases in our city since we bought our first home in 2001.

Two great places for reading up on and discussing housing, mortgage, and credit related issues are:

• The Housing Bubble Blog, and
• Calculated Risk

A single ounce of gold placed in a safe today will still be a single ounce of gold a decade or a century from now.

And that is exactly the point. I don't watch much T.V., but someone had the history channel on last night, and the show was on 'pizza'. Mr. Lombardi, an itallian immigrant, had opened the first pizza shop in New York City in 1905. In 2005 the shop celebrated a century of being in business by selling pies for the original price: $0.05.

Land's other drawback is that it's currently overpriced, as a result of the housing bubble. If I had anything to say about my grandparents' farmland I'd hold onto it, as it produces something of value *and* they own it free and clear. A relative thinks it's a bad investment because it "only" returns 5%/year.

So, if you're convinced the next crash is near (I'm not, but I agree it'll happen), buy stuff of lasting value -- but stuff that is *useful* in the meantime, not stuff that is simply stored in a safe.

I mostly agree with most your points in this post, which is why I'm considering diversifying. I only view gold as a short-term wealth holding device, as technology has made it less-scarce than it used to be (the cost to dig it out of the ground has dropped exponentially over the last 200 years).

The collapse of the economy as we knew it is well underway, with housing leading the charge.

Furthermore the amount of gold *grows* over time, more is found and dug out all the time, only small amounts of gold are lost or consumed.

Silver gets used up, for all sorts of industrial processes. Mirrors are made with a thin layer of silver, electrical switches use silver to prevent sparking, film photography uses silver, digital cameras use silver, electronics use silver. Silver reserves are quite low (much of the silver that's ever been mined has been used up), and the reason the price of silver is still low is apparently due to manipulation. I have much more silver than I do gold, for this very reason.

It just sounds like financial suicide.

I know that and you know that. Now try telling all the people whose mantra was 'but real estate always goes up...they aren't making anymore land' that :)

This is a fun site to read. Just remember that they like to paint a very bleak picture. I think it's somewhere between those people and the RE agents to where things will play out in the end.

"In the second quarter of 2006, one of every 66 households in the county was in some stage of foreclosure. 'Wages did not keep up with the appreciation of homes,' said Matt Revitte, a housing broker in Greeley. 'So many buyers bought into a multitude of loan products thinking the party wasn't going to end. But it happened. It always happens.'"

"'They can't pay it because they haven't received the promotions or raises they were counting on at work. They can't sell their house because too many similarly desperate people have also put their houses on the market, and at super-low prices in their rush to unload. 'Now panic starts to set in,' Realtytracs' Rick Sharga said. And with missed mortgage payments, here comes the bank."

-http://thehousingbubbleblog.com/?p=1428 (emphasis added)

Let me clue you in, pal... if everyone abstained from credit cards whose income was highly vulnerable, the economy would tank and your comfortable, pull-yourself-up-by-your-bootstraps universe would collapse anyway. Our economy lives and dies by consumer credit card spending: it is that huge a factor.

Ah yes, the fabled "consumer economy". Mainstream Media tells us that it's alright that the other half of the economic equation, production, has mostly moved to China in recent decades (... due to mismanagement of the economy by the Federal Reserve, but that's another post). They say this transfer of production is alright because we now have a "service economy".

The main problem, as I see it, is that China doesn't much need our "services", and the U.S. economy is now in the process of collapsing (beginning with the housing bubble). There are consequences for record budget and trade deficits, you know.

The collapse of Ford and General Motors will mark the acceleration of the trend, as hundreds of thousands of Americans depend on those two giants for their paychecks. General Watch also chronicles the decline and fall of General Motors.

Other sites whose economic analysis I've come to appreciate include The Daily Reckoning and Mish's Global Economic Analysis.

I myself am slowly running up the balance on my credit cards. Used to pay 'em off every month, but I'll need supplies for when the banking system goes, and there will be so many "bad debts" that I expect no one will come collecting. I'm not buying frivolous crap, mind you, just some bulk food items and other "stuff" I think will be useful.

I'm no economist, but I'd guess that firms/investors are pulling their money out of the shaky real estate market, and back into stocks and tech.

Just in time for the real estate market to collapse, taking most of the economy with it...