Just so we're clear: I've been waiting for the next recession for over a decade. I'm the one who talked about shorting stocks of the Fabian Socialist capital, back on the original KiA.
I said it before, but now I must insist: BE THE PINECONE
The mortgage industry is facing complete collapse. This is a result of most of the industry trying to focus on refinancing, rather than purchases. Now due to inflation, builders can't build homes. Prices are going up, and now interest rates are being cut. What that means is that people are going to start struggling to even pay their mortgages. What that means is that the Mortgage Backed Securities are going to start becoming unprofitable. What that means is that everything that depends on those MBS to be profitable is going to fail. And what depends on those MBS's? Everything. Government bonds, pensions, treasuries, sovereign debt, retirement funds... everything.
There is a world wide cost of living crisis due to inflationary policy. The Fed is making signals that it's going to try and fight inflation, by basically tanking the entire stock market. Frankly, if they were to do this, it wouldn't even be wrong. They no longer have much of a choice because they put it off too long. More likely, they won't until it's too late and the whole world economy really does fall off a cliff and they won't be able to stop it. Worse, the government backers of these mortgages are basically saying they won't be backing most mortgages anymore. Without that, no bank is willing to risk making a 30 year, hundred thousand dollar loan, to Joe Blow from Kokomo, who has a credit rating of 580. The mortgage industry is dead. That means the foundation of the entire debt system goes with it. That's what retirements, pensions, and sovereign debt rely on. If you keep all the lumberjacks home for a year, you will get a wood shortage the next year, and a furniture shortage after that. The mortgage industry works the same way; and the mortgage industry is financing everyone's stock market.
How dead is it? Go onto a search engine of your choice, and search "mortgage layoffs". Every major mortgage company has been laying off people like mad for a couple months now. 10%, 20%, 30% of all staff. This is because there's not enough homes, not enough borrowers, not enough people who can pay the loans, and now very soon everyone's interest payments are going to jump. Foreclosures will start to increase, and then there's nothing that can stop the inevitable. The Perennial Gale of Creative Destruction will not be denied. A market of lies must correct to reality.
This isn't like the Great Recession, because the truth is that in the Great Recession, a lot of people were too stupid to see the truth. I don't think anyone who matters is missing the signals now. Everyone's reacting aggressively to try and get to a seat before the music stops, and they all know it's coming. Nobody just wants to say it out loud because it's scary, and people are already scared, and the market would react even worse to fear.
But you know why I've been waiting for this for a decade? Because good, nice, clean people with middle class incomes lost fucking everything and asked under-class me if they could live in my garage. People with kids. Whole neighborhoods were abandoned. People lost futures. People lost hope.
I don't want that to happen to you.
Any of you. Even the retards among us. It's terrible and I want you to be okay.
So, here's what we do.
- Prep for hard times
- Save your money
- Grow through the collapse
Prep for hard times: get you're supply of food. Get your supply of heating items. Just get it now and put in storage however you can. Make arrangements for the winter, however you need to. I'm not saying it will turn into mad max, and it won't. But I am saying that 1 month of emergency rations will certainly help. It's going to be hard times for everyone, but you're NOT going to be the person caught with nothing.
Save your money: slow your spending on frivolous shit unless that shit can be sold as a useful asset later. Start pulling cash out of the bank now so you have it on the side, just in case someone gets the idea to restrict withdraw limits from your bank accounts. Gold, Silver, Crypto, I don't really care which one you do or don't like, you might as well have some of each. I rely on you to make the best decision for you on that front.
Grow through the collapse: this is a hard lesson. During collapse is the time where the most real growth will take place. Not through good times. The elites know this, and they are positioning themselves to be the beneficiaries of the largest transfer of wealth in human history. Hunkering down is good for a bit, but you are going to need to seize opportunities and take risks during the collapse. You actually get rewarded the most at that time. If you have a skill, get paid for it, and prove you're indispensable. If you see an opportunity that's not being taken advantage of, seize on it. This is actually the time you need to streamline, become more efficient, and be more aggressive. If it's not making you money, influence, or career advancement, why are you doing it? Advance your career by as you need to, and take responsibility from others who aren't pulling their weight, or seem lost. Don't wait for them to self-correct. Become the pillar of your own little communities that people can trust and go to for advice.
This is the essence of being the pinecone.
The Great Collapse will burn away all the brush, and if we have prepared ourselves properly, we will open up from the heat of the fire, root in the ash, and we will rise again
Fuck the Black Pills. Everyone's called me crazy already. Maybe I'm deluded. Maybe I'm a lunatic. Hell, let's assume I am.
But I believe in you, and you should to.
When we look back on our own histories, I don't want you to remember that you were the victim in this story. I want you to look back and see yourself as the hero.
When all this is over, I want you to remember what you accomplished when everyone, and everything, collapsed. I want you to remember that reading this post made you start thinking about how you would be the pillar of your friends and family, and we bore our crosses, and re-built our civilization on our backs.
Be the pinecone.
I've evacuated my investments, and I paid off my entire home loan. Now I just have to figure out the sorts of physical investments I should be making with my assets.
I got gold and silver for now, guns actually seem to be neutral.
I'd probably consider land and homes after their prices collapse.
Will their price collapse outpace the collapse of the dollar's buying power though? That's the thing I can't figure out.
That's the big question. Keeping money in savings is a bad idea due to inflation and the ridiculously low interest returns. Physical assets/property are the way to go, but it's tricky when the property market is this inflated.
To me, yes I believe so.
The dollar's buying power is increasing because it's the world's reserve currency. But if you believe that the dollar is going to survive, then you DON'T believe in The Great Reset, which has been pushing for ending the dollar in favor of introducing a new digital currency.
I think it would benefit you to watch this video, where there is an argument where the dollar gains value (rather than losing it). I'd say the key takeaway is that while the purchasing power of the dollar will go up compared to other currencies, but it will still do worse compared to assets, not only to gold... but to shit like wood.
So I want to buy a house anytime by August. Would you say that is too soon?
I personally think that we are at the very end of the asset cycle for housing.
I think within the next several years, the value of housing (regardless of price) will probably fall by 30%-50%.
Optimally, the best time would be to sell now, and then buy later. If not buying a house for several years isn't an option, maybe buying a cheaper house, or an easily repairable house, would be better. If you treat your house as an investment, you might lose less with a cheap one, and you might gain more value if you bought it already cheap and improve it. Alternatively, you could also mitigate the damage by buying a house in the right location, like in good parts of Florida, Texas, and Tennessee.
This is a video of Mike Maloney describing what he's calling a wealth cycle, but is more traditionally called an asset cycle. What you want to do is recognize where you are in the cycle, so you can put your money in the assets that are going to increase, and move it out as the cycle completes. I believe that when it comes to real estate, we're at the end of it's asset cycle, where you need a huge amount of gold ounces to buy a the "median" house. Currently, the Median US house price is around $428,700 , and that translates to around 225 ounces of gold to purchase a house.
I've decided (since I already have a fully paid off house, but also can't actually sell it for personal reasons), that I'm not getting into that market, and I fee like the end of the real-estate's increasing prices is soon, and would be too hard for me to guess right. So I'll just buy gold instead and wait for housing prices to fall.
I think it's very likely that within 5 years, the housing market will collapse (as in lose 30% - 50% of it's value). So, if you are getting into a house, you should think about how you are going to get out of it. I'd say we're both playing a bit of a dangerous game. Me buying an asset that should go up, means I'm taking losses now. You guying an asset that should go down, means that you could take losses later. So, if you buy a house now, you might want to figure out how to flip it in less than 5 years, so you can put your money into different assets. You'll need to figure out when you want to get out, and what you want to put your money in, in addition to how you want to actually invest in your house (given it's condition, given how much repair you'll have to do, given how much land you might get).
If I were planning on buying a house, and I had to move into it, and I only get the one house. I would focus on buying a small house that I could easily improve, and that has lots of land, in a good location for travel. So, some place off the interstate, where maybe I get 2-10 acres, the house itself is small, but relatively recent (modern electricity, heating, insulation) and I could improve the value of the house for a much better sale in 2-5 years with some basic features like: improved landscape, add a garage, add a deck, add a nice granite or stone kitchen counter, maybe paint the house a preferred color, and sell it for basically what I got it for. The money I saved in not buying a bigger house gets kept in gold which jumps up in that same time. At the height of gold (4-7 years from now), and the bottom of real estate, I sell the gold, and start buying more real estate or stocks which will begin their slow climb for the next 30-40 years.
Honestly, I'd find a real estate agent who's been through everything, and tell him how you want to do this to protect your wealth. See what he tells you, and tell him that you'll stick with him when you sell the house later if he helps you figure out how to improve the value of your new home during the coming years, so you can purchase a nicer home towards 2030.
This is my biggest problem, finding a safe investment to carry my cash through.