I don't think the possibility of erasing the increase in wealth from real estate is something we can blithely dismiss. After all, as stated earlier, it represents approx. 41% of the entire increase in wealth for the last three years. And when you add the fact that the US household financial balance sheet has been falling deeply and steeply into the red ever since the early 1990s, you have the potential for a debt crisis. In addition, as I already mentioned, disposable personal income has not kept pace with the interest we have to pay on our massive debts. The only way out of this mess is for asset appreciation to continue. The asset bubble of the late 1990s allowed Americans to sustain their extreme level of debt for a while, and then the FED manufactured the housing bubble to sustain our debt once the bubble of the late 1990s popped. But what is the FED going to be able to do if the housing bubble pops? They can't go on creating asset bubbles forever. At some point we will have to pay the piper, and as far as I can tell, when that day finally comes, it won't be pretty.
How much do you think real estate is "overvalued" and where, and how much will it drop in value and when? You need a rather substantial and rapid drop to get traction for your thesis. My opinion? I think real estate is somewhat overvalued in certain markets, and mostly for homes, and not by that much, given continuing low interest rates, and the level of incomes in those markets. It was much more overvalued in 1989. I don't see a big valuation move, absent a substantial rise in interest rates, or a severe rescession, neither or which are on the horizon. JMO.
And when you add the fact that the US household financial balance sheet has been falling deeply and steeply into the red ever since the early 1990s, you have the potential for a debt crisis.All this gloom with no facts to back you up. It's getting to be a habit.
Doesn't look too bad to me. Maybe you have some different facts?
In addition, as I already mentioned, disposable personal income has not kept pace with the interest we have to pay on our massive debts.
Source?
The asset bubble of the late 1990s allowed Americans to sustain their extreme level of debt for a while, and then the FED manufactured the housing bubble to sustain our debt once the bubble of the late 1990s popped.
Extreme level of debt? Sounds scary!
At some point we will have to pay the piper, and as far as I can tell, when that day finally comes, it won't be pretty.
We know, angels with magnets pulling gold to $1650.
P.S. since you won't (can't?) back up your assertion (lie?) about "Goldstocks paying better dividends than most other investments for the last five years" I did the work for you. Your beloved "AMEX GOLD BUGS INDEX (^HUI)" consists of 15 stocks. 7 pay dividends ranging from 0.1% to 2.1%. 8 pay no dividends (that'd be 0.0%). I couldn't find the weightings of the components, but if they're equally weighted, your index pays about 0.44% in dividends.
Unless you're comparing that to gold (0.0% yield), I'd say your assertion (lie?) was off just a bit.