There is nothing magical about 30% - it could be more or could be less depending. To reach the 20% level, that is simply 10%/year for the next two years and, again depending, if nothing is done about the economy, it's very easy to clock-up another 10% or more in the third and subsquent years.

Read some of Shiller stuff - that's well documented and there is no reason to think otherwise than that the housing market will drop at least 10%/year over the next few years (and could be more depending on other pressures).

Don't rely on a hyped analyist to make some claims of booming real estate values - they are often employed by the people who were so greedy in the first instance and who enabled substantial elements of the sub-prime market to cause problems - not just for their own companies, but for many individuals.

If there is reason to believe this could be otherwise - I've never heard it yet, tho it's well-known there has been a combination of hype from Wall Street, the Whitehouse and the media as to how rosy the garden looks. Unfortunately there is no actual evidence of this and based on past track record - this is being trusted less.


Canada does not owe the world anything like the debt carried by the US. Canada also has a thriving economy and substantial evidence of a healthy future economy. That is one country where a fair degree of investment is happening now. Why? Because industry/markets are performing profitably.

Canadian markets over the last five years have produced a return of 60% and is second in line from UK markets at 64%. On the same topic there is classic illustration and another example of an economic problem in the US where markets produced only 18% over the same time span.

None of the countries I mentioned are "deep in debt" - they operate an economy which is being managed and they have a fiscal policy in place. Whether they have debt (most do), is not the issue, - the problem is a severe debt scenario, little funds and no apparent potential mechanisms of creating wealth to the degree needed to control the level of debt.

As far as I can see, there is no fiscal policy of any kind in place in the US over at least the last five years. You may recall attention being drawn to the economy during the first year of Bush's reign? His solution? Assemble a group of industrialists, bankers, economists together and stuff them in a room to solve the nation's economic problems - then dismiss everything they did.

It really is a total waste of time until "someone" gets the bull by the horns and starts addressing the issue seriously - otherwise this is going to cause problems for many people.

I will read up on his stuff, he seems interesting. I don't follow the housing market outside of the areas I live in. I just can't foresee housing dropping 20-30% in the parts of Chicago I am in. I mean I've seen some places drop a little off their asking price, but I'm still seeing condos selling left and right around here.

Well Canada does have a debt to GDP ratio just as high as the United States. They wouldn't owe as much as the US because their GDP is under 10% of the United States.

As for the future of the Canadian economy, I still think problems in the US will hurt them. They export a ton of stuff to the US and almost all the foreign investment comes from the States as well. They've tried to seperate themselves as much as they can, but they are still too tied in to avoid the impeeding storm.

Sure, there will be regional variations on property values PK, and some areas may not feel any effect. But.. the overall, when looking at the economy, means 1000's, probably millions of people will have additional pressure to support home payments - and less money to swirl around in the marketplace. It's a vicious cycle and when it starts and it's very hard to stop.

There was a survey done of ARMs (think the article was printed in Barron's mag) - where it revealed a substantial number of folks already have negative equity in their homes (can't remember the exact percentage), and it would only take a drop of 15% on real estate values (as at May 2007) to result in over 50% of ARM mortage holders running negative equity to the tune of $1.4 trillion. This may be fine if you think of a home as a home and not an investment to gamble with - and suspect in the long term these people will be fine - they just have to ride the storm meantime.

The current trend still appears to be downwards on the home market and an increasing volume of "home stock" on the market for sale. Developers, least probably most, have dumped a fair amount of their raw land stocks earlier and battening the hatches for the storm, but suspect some will hit the dirt irrespective.

Bob Shiller is actually very good at his stuff - and sometimes comes up with shocking results. Unfortunately, a high percentage of his conclusions have since come true - and some were fairly obvious when you dig under the surface. Due dilligence by banks was often done by a blind banker :winkwink:

You said you lived in Costa Rica, maybe you can help me with a question.

I'm looking to buy something down South and out of the country. Preferably something I can stay at a couple months out of the year (January and February aren't much fun in Chicago). Is investing in a property worthwhile, and is it safe? Do you know of people doing stuff like that and making a Winter home in your country?

I'm also looking into Chile and Panama.

No problemo and know what you mean :winkwink: OK... quick assessment on investment in real estate here...

Yes, I do exactly that and very familiar with both land and home values - tho tend to stay away from homes since you have to rent them and causes more work/hassle. We own around 1100 acres of real estate here and still buying up anything that has potential.

There are certain areas of the country which are excellent for your purposes - these are mainly on the Pacific coast. The north western airport at Liberia has flights direct from the US to the Pacific coastal area - and saves having to fly in to the main airport near San Jose.

Investment value - it sure is a good deal to invest here, particularly on the Pacific coastline. It's always hard to say how long this trend will last - I expected a blip because of the downturn in the US home market, but from all comments from our realtor, this has not happened and it's the reverse - real estate generally is on an increase. (There are various reasons for this - but boring unless you really want to know).

Based on the last five years, - it's safe to take the official government figures which have shown a capital appreciation increase in property values on the Pacific coast (and some elsewhere) between 40-60% per annum. This is much in line with what we have seen on our properties - seems to average 50%/year increase. As far as forecasting is converned - I can't see much change in that over the next five years. Longer than five years is hard to estimate at the moment, but the general trend is likely to be upwards, mainly because of the increasing numbers of "immigrants" arriving here from a range of places - US, Canada, Germany, Denmark etc.

Can only give :2 cents: on making sure you get a good deal on a property. There are plenty developers asking seriously silly money for their product, and, ironically getting that money. Simple example - in the spring of this year a developer announced his plans. Within six weeks our realtor lady did a job as a sideline and sold three of these properties. They were priced at $1.2 mill each for a condo. Just heard yesterday - there are only six units left and these have been increased to around $1.5 mill. These are not special properties - just very expensive for what they are. And... they have not even been built yet! *lol*

It's important to have a good look round and be fussy about whatever you buy and don't enter the overpriced market. But, it's also safe to say, if you buy correctly - it's easy to see a 50% potential annual increase on your investment for a good few years ahead.

Is it safe? Yep - no problem. But, as a matter of course, do some due dilligence on the developer if it is a "work-in-progress". Otherwise, if you are purchasing an existing home - much easier. A local lawyer will do all searches in the National Registry and perform all the usual stuff you will be familiar with in the US. The choice of a lawyer is also important - there are the usual wannabees and tho they may be well-qualified, - it may not be a good idea to use em :) If you want recommendations of a lawyer - no problem - we work with a number of highly respected lawyers who are very familiar with real estate and are involved in massive projects.

On the country itself - nice place. The people are friendly and very willing to help - genuinely. At the same time there is the usual small element of swamplife, but no need to come in contact with these people. The Pacific coast are is awesome - some areas tourists never see - it's paradise :) The cost of living as we know it, is silly - a beer costs .50 cents, banannas 2 or 3 cents and there is plenty fresh fruit blah blah.

The healthcare system (should you need it) is cheap and all-inclusive. Was chatting with a US person recently and he was amazed that he can get full medical care of the same standard as in the US for his family (four people) for around $250/year including dentistry. He unfortunately ended up in hospital for a while and got introduced to what he described as the best healthcare ever - and was only too pleased to join the healthcare club :)

It's prob better to spend some time down here PK before making any investment - and also having a look around at areas. (Also remember property is increasing - it's often increased by the month!) But generally, probably the best area is on the Pacific coast and near Liberia airport. The eastern side of the country is awesome, but seriously extreme in the eco sense. The central valley area where most people live is OK, but also near the capital, San Jose - and you want to avoid the place :winkwink:

If you need help on this, there are various forms - can recommend lawyers and could also introduce a "real realtor" (there is no control over them by law here - so better they have been in biz for 15 years or so and have an honest track record) - either way, can recommend a few.

thanks for all the opinions

After the 2008 elections and changes (hopefully) in US fiscal policy as well as a period of adjustment, I see the dollar being 1:.90 with the Euro come 2010.

one more bump

Considering the leverage you get in currency trading anyone who is quite certain about future prices (and is correct) can build an extreme amount of wealth in a quick period of time.

You can trade currency on say 100:1 margin. So you deposit $1000 and are trading $100,000 worth of currency.

There are plenty of websites where you can get a practice account.

But ... "There is no free lunch" - Milton Friedman.

A year later.

What social programs? They take up a VERY small % of the budget. Don't mention SS and Medicare because those are paid for by FICA taxes. Now in 10 years yeah there won't be enough form FICA taxes to cover those expenses, but that's in 10 years not today. The military is by far the largest part of our budget. And frankly if they'd stop paying $200 for a hammer, $300 for a coffee pot we could still fund our military on MUCH less.

one more year passed

and now 1 EURO = 1.5 USD ... thats sad

Yea It is :(