Federal Reserve | timiacono.com - Part 4

Via Sovereign Man comes this series of clips of former Rep. Ron Paul (R-TX) and billionaire investor Jim Rogers on subjects such as Federal Reserve policy, money, and inflation.

I don’t recall ever seeing these two together on the same stage before, so, for that reason alone this is kind of neat as they both rail against the status quo regarding economics and monetary policy, taking Ben Bernanke to task for his misdeeds.

This is from a conference late last year, so, some of the data is a bit old.

Nonetheless, I think Paul has it right when he says “There’s going to be a lot more chaos yet to come”, due primarily to the many gross distortions around the world in financial markets, economic data, currencies, etc. caused by monetary and fiscal policy of recent years.

Rogers again questions whether Ben Bernanke is a liar or a fool and concludes it’s the latter.

Toward the end they talk about U.S. government confiscation of private assets (mostly retirement accounts) when the SHTF – that doesn’t sound good.

Where Can a Teacher Afford a House?

According to this item at the WSJ Economic Blog via data from real estate firm Redfin, school teachers might want to check out places like Rockford, IL, St. Cloud, MN, or Sherman, TX if they aspire to be homeowners as these are some of the very few places in the country where the combined labor marker/housing market conditions are favorable.

Here’s a screenshot of the annotated Google map (it’s interactive at the WSJ):

There are lots of red dots on the map and the reddest of them all is San Jose, CA, a town that is close enough to the Bay Area/Silicone Valley real estate market madness to make it all but impossible for any third grade teacher to even think about owning a home there, even with their average $71,000+ salary.

Conditions are better to the east in Modesto, CA, but who would want to live in Modesto?

Reading, PA is high up on the affordability list (that’s the blue dot nestled in with all the yellow and red ones on the East Coast) but, aside from that, teachers should look inward.

A Different Kind of U.S. Housing Bubble

The Marketwatch headline reads Investors Retreat from Housing Market and this story was no doubt prompted by yesterday’s existing home sales report (as detailed here) that was more cause for concern that investors – a key drivers behind the property market recovery in the U.S. – are moving away from the housing market after big price gains in recent years.

Here’s another look at the same development from this item at Mark Hanson’s real estate blog where all-cash sales are charted (there’s a good deal of overlap between all-cash sales and investors purchases, but, obviously, they’re not the same thing).

Of course, the other flashing red warning sign about the sustainability of the housing market rebound is the dearth of first-time homebuyers. Normally accounting for about 40 percent of all purchases, they have yet to crack the 30 percent mark in recent years, rising from just 26 percent to 28 percent last month.

After the steady rise in U.S. home prices over the last couple years, there’s been lots of talk about what we ‘Mericans are doing with all that new found home equity wealth and, while we’re nowhere near the euphoria seen eight or nine years ago when the last housing bubble had completely flowered, things seem to be working in that direction.

This Benzinga story harkens back to 2005 when I was still writing software while working out of a cubicle in Southern California and a few folks from the local Citibank wealth management office held a little seminar to tell us just how bad an idea it was to let our accumulating home equity just sit there, going so far as to dub it “dead money”.

3 Reasons To Tap Into Home Equity To Buy Stocks

As home values are rising, so are the number of Americans taking out second mortgages. When (and if) done right, it is a very savvy move in personal finance.

Here are three reasons those owning real estate in the United States should unleash the equity to buy stocks.

Whether this would be “very savvy”, just “savvy”, or really stupid won’t be known for some time to come, however, let’s not let that minor point get in the way.

The reasons are diversification, high stock dividend yields, and better liquidity with stocks.

What could go wrong?

They don’t say.

Rising home equity has also been a boon for retirees who, in many case, have a house that’s paid off and rising expenses that they really didn’t plan for in this era of super-low inflation.


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