GET REAL ABOUT CONSEQUENCES/ANTICIPATE THE TRENDS

Okay, so you've chosen to wake up, ward off the fear and hype, and consult concrete facts and deeper intuition. Now what? Time to ask the question, “If we keep going this way, what is likely to happen?” What are the implications? What do we look for now?

This is the honesty step. Perhaps you or someone close to you has already bought a house at the height of a housing bubble. Now what? 1) Confront your desire to deny financial losses and unwise personal financial decisions. 2) Look at the trends. Say, for example, you are holding on to a typical real estate asset, hoping things turn
around. Neither fundamentals nor trends support a return. Add maintenance, taxes, and fees, and you are staring at more losses.
Why? The real estate bubble has popped in so-called developed countries and is about to pop in developing countries. These cycles were and are being pumped by investors looking for short-term gains before pulling their money out. This is false demand. Overall real demand is declining in middle class America and Europe. Housing supply is glutted from overbuilding, especially in Spain and China. Real incomes have fallen
in the U.S. and Europe among young people in particular. Trust in home owning has been dashed. Long term, these trends push purchase prices down.

Is the market ever going to come back to what it was? Most likely no.

Does this mean that all real estate will decrease in value? No. I would not be at all surprised to see condos near cultural urban centers go up in price as baby boomers retire, even as suburban McMansions plunge in price.

Investment-wise, it is important to anticipate where a shift in visions of the good life will increase or decrease demand and value for certain physical assets.Semi-rural medium-sized college towns with progressive values, farmer’s markets, access to nature, and simple pleasures are positioned well to increase in value as people gravitate toward a simpler, community-oriented life and leave the “rat race” behind. (Transforming Economy, pg. 124)


Transition times are generators of anxiety . We are going through a major social transition now. This often prompts people, in the medium term future, to run toward traditional stores of value hoping for stability. This pushes traditional commodities like gold and silver up in price, maybe even way up if there is a panic and another greed- and
fear-driven bubble. Humans don’t change their habits easily.

When you complete Step #2, you will have a sense of perspective about where we are going, what to expect economically, and why we cannot go back.You are ready for Step #3, to clear the financial clutter and align money priorities with deeper values and sense.

To Be Continued...come back to read all 5 steps! We would love to hear your thoughts on the second step below.

 

Zeus Yiamouyiannis, Ph.D. is an economics blogger, futurist, and author of Transforming Economy: From Corrupted Capitalism zeus.jpg
to Connected Communities. He has written regularly for top alternative economics blogs, including ZeroHedge.com and OfTwoMinds.com. He has appeared as a guest on “The Keiser Report” and “On the Edge with Max Keiser” on RT TV as well as the “Inside the Eye” radio program. Zeus is a “performance educator” with expertise in philosophy and cultural foundations of education. His own blog, Citizen Zeus (
http://citizenzeus.com)

Pick up a copy of the Transforming Economy e-book here. Visit Citizen Zeus to engage other essays on transforming yourself and your society. Contact Zeus at zeus@citizenzeus.com to engage his "learn to transform" consulting services.

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