he Rich Man's Housing Crisis

Large, expensive houses will decline in value more precipitously than utilitarian housing in an era of declining energy availability and increasing food and energy prices.

The financial markets and the credit markets have only just begun to wreak their havoc, and that havoc will impact the wealthy in ways that might be incomprehensible at this moment. But just ask any Florida homeowner of "luxury" or "executive" residences how the sale of their home is going. The short answer is there is NO MARKET for these properties... and I in my opinion, there never will be. Once the oil import and North American natural gas production twin crisis's hit, Corporate America is going to take a hatchet to their payroll, Wall Street is going to be renamed Floor Street, and Real Estate agents are going to skip being called "waiter!" (because restaurants will be deserted) and go right to migrant crop worker.

(Disagree with my vision? Tell you what - I will tell you what futures contracts I am buying in the commodities market. You take the other side of the trade. It is a zero sum game, so whatever I lose you stand to make - or the other way around.)

At the same time the equity in your home goes to zip-ity-do-da, the source of you wealth might be headed there, too. Own bonds? Hyper inflation and the dollar crisis will convert them to toilet paper. Own equities? Better be gold miners and energy companies - the rest are circling the drain. Own a private business? Hope it is not leveraged, dependent on cars for customers or employees, or discretionary. Not going to be a lot of use for the millions of financial planners, brokers, insurance salesmen (folks, I am in the financial services business - that career path is doomed), real estate agents, lawyers, hair stylists, retailers, etc... are any of these types your customer? Well, they are going to have a great deal less discretionary spending money than they have now.

Someone is going to be left holding the bag. It doesn't have to be you.

Yours for a better world

Mentatt (at) yahoo (d0t) com