One Is the Most Physical of Physical Assets the Other Is Completely Intangible
Our meanings of monetary words is about to changed.
Literally, down will mean up, and investment will mean losing money.
How do you deal with such changes?
When you have told one thing all your life, and then some wacky online presence is saying the opposite.
Fortunately, the TV pundits are losing it, and are now saying the most insane stuff. Trying their hardest to keep you in the old paradigm. Dave Ramsey is the anti-indicator.
And, think on this. The above matchup only makes sense NOW. In the not to distant past, it was funny. In the future it will seem tragic that we ever thought one of these was an asset.
Bitcoin
Bitcoin, right now is a speculative investment.
What happens when bitcoin become money? And not just any money, but deflationary money. Meaning that all you have to do is hold onto bitcoin, and you can buy more stuff in the future.
Your bitcoin holdings will grow as the world's economy grows.
Imagine buying APPL stock, but you can buy things directly with it. You don't need a broker, you don't need a bank. Your APPL stock ("money") just sits there becoming more valuable each year. (of course APPL is going to crash, but, for right now…)
Bitcoin doesn't require you to sign up for a bank account. No monthly fees. No brokerage fees. It just sits there costing you nothing. It puts today's investment vehicles to shame.
And then it becomes "money"… why would you park your money anywhere else?
Real Estate
Real estate has many words associated with it. Like, it is physical. You can't destroy land. Housing always goes up. Your home is your largest investment…
What if all of these words changed?
Like Real Estate in New York City after rent controls. Investors were trapped in the real estate. They were losing money. They could not sell because no one wanted to buy something that was losing money. The only way out was to hope that the joint burnt down.
Well, rent controls are coming to California. And if indicators are correct, coming back to NYC.
Escape From New York and Escape From LA comes to mind.
Now, add to that, that demographics is going down. Soon there will be more houses than will be needed. And the market crashes permanently. In places where people are moving away from, you may see two empty houses for each person that wants one. At that point, there is no market.
Already we are seeing that happen in commercial real estate. Big office buildings without any business wanting to rent them. Malls empty and abandoned.
So, very soon, real estate will be very risky, no longer a physical asset, but one that can be taken from you by the govern-cement, or squatters or looters.
Instead of being valuable, you will have to pay to get rid of it.
Right now
Right now, we can still get mortgages to buy real estate. And there is still demand for rentals. You can make money on that. If you buy a good place, in a good neighborhood, for a good price, it is an excellent way to use OPM (other people's money) to finance your investments.
It also has good tax benefits, and legal structures already in place, and well known.
Bitcoin, on the other hand, is going down, while monster buyers are buying it up. Totally not the way it should be.
And there are bills being passed, and rumors of bills to be passed that may either make bitcoin extremely valuable, or something relegated forever to the waste bin, or the black market.
So, right now, it is a real toss up about which is a better investment. It will depend on your current area, and finance rates, and how well you shop homes… on the other side, it is wait until the political winds stop blowing every which way so that you know where you stand.
In the future this choice will be decided. One way or the other.
If real money comes into existence, real estate is toast. From every direction, real estate will be considered your biggest liability. The mortgages will be gone. The renters will be gone. The insurance will be gone. The agents will be gone.
And the demographics curves do not lie. They are the indicator of the future. And that future shows that there will be a lot of empty houses.
If bitcoin become money, or the backing behind money, then bitcoin will be the biggest investment ever. Satoshis will be worth something. Probably an entire basket full of groceries.
The other future:
If the banksters win, excess real estate will be swallowed up by bankster money printing. Prices will be kept high with more money printing. The basket full of groceries will be $10,000
I just do not see how the banksters will survive. Because, all of these bubbles are going to pop. And that is going to lead to banksters hanging from lampposts. And people never touching banks again.