Peter Schiff is (in my opinion anyways) one of the few people who really "gets" it. Namely, that things economic do not behave linearly but are always inter-connected with other events. Pessimism or not (Peter is after all called "Dr. Doom") his projection is a clear possibility. If real-estate prices move down, and a few people default, the ensuing effects on credit and home prices will cause even more people to default.
1. 0-down real estate is not really a free put option, because foreclosees are liable for income tax on forgiven debt. (Of course, the govt may change this, but that's how it stands now).
2. And speaking of govt, I repeat my belief that govt will start printing money and handing it out before they let too many people default. I think the 80% would happen if the govt stayed out -- but they won't. Don't worry, it's good for gold.
Our comment:
Peter Schiff is (in my opinion anyways) one of the few people who really "gets" it. Namely, that things economic do not behave linearly but are always inter-connected with other events. Pessimism or not (Peter is after all called "Dr. Doom") his projection is a clear possibility. If real-estate prices move down, and a few people default, the ensuing effects on credit and home prices will cause even more people to default.
a couple points
1. 0-down real estate is not really a free put option, because foreclosees are liable for income tax on forgiven debt. (Of course, the govt may change this, but that's how it stands now).
2. And speaking of govt, I repeat my belief that govt will start printing money and handing it out before they let too many people default. I think the 80% would happen if the govt stayed out -- but they won't. Don't worry, it's good for gold.