Hello Mr. Rawles:
Seeing that houses are pretty much dirt cheap right now, would it be a good decision to buy one? what would happen to our debts (including the mortgage) when/if the Amero comes? would they disappear like they claim the American debt will? I hear radio advertisements about the IRS [1] giving you up to [a] $7,500 [interest-free loan] on your 2008 taxes if you buy a house in 2008. So, again, would it be a good idea? would the Dollar amount be converted into Ameros?
Thanks in advance for your response. As always, congratulations on and thank you for your blog, simply the best. – Luis S.
JWR Replies: The $7,500 incentive offered by the IRS must be paid back over the next 15 years. It is an interest-free loan, not a tax credit. People who claim this “credit” must pay it back at $500 per year for the next 15 years.
In my estimation, suburban houses have another 25% to fall nationwide, and another 40% to fall in the over-bought markets. I recommend that you wait for at least two years, until the market is closer to the bottom. And FWIW [2], according to The Chartist Gnome [3], the absolute bottom may not be until around 2016. There will be plenty of pain and angst ahead!
The widely-rumored advent of the Amero is far from a sure thing. I recommend diversifying out of dollar-denominated assets and into practical tangibles. At present, my favorites are alloy, steel, and polymer, and hold lots of cartridges [4]. With well-chosen tangibles, you will shelter yourself from the worst effects of any currency swap or formalized devaluation. Yes, land is a tangible too, but the only real estate that I would consider buying these days is productive farm or ranch land. This should be land that could double as a survival retreat, and that is located in a region that was not part of the Big Bubble.