From: Lynn Wigglesworth <lynnw1366 AT hotmail.com>
To: <bobford79 AT yahoo.com>, <homestead AT lists.ibiblio.org>
Subject: Re: [Homestead] Inflation --commentary
Date: Mon, 29 Sep 2008 09:40:24 -0400
That's an interesting commentary. I think he has a good grasp of how
inflation works (but he didn't do the math on the "give the $700 billion
to the people" scam).
The only argument I'd have with his view is about housing prices. I'm
not sure why he thinks his friend should walk away from his house,
unless he has an adjustable rate mortgage that's about to explode. What
has changed? It's the same house and same mortgage (if it's not an ARM);
he liked it 6 months ago when someone said it was worth $600,000, but
not today because someone claims it's worth less? If people are going to
move every couple of years and flip houses, yeah, they need the value to
keep increasing. Changing houses every couple of years in this market is
like buying and financing a new car every couple of years; you can't
even pay off the loan on the first one with it's trade-in value. It's
just plain stupid, but Americans gotta have their shiny new toys and
their bigger and better houses.
I'm a very 'rooted' homebody, so it's hard for me to understand the need
to move and upgrade all the time. If you have a fixed rate mortgage and
don't plan to move, it doesn't really matter much what the market says
your house is worth. My mortgage payment (if I can't pay it off by then)
will be the same 10 years from now, no matter what the stock market or
housing market does...heck, inflation makes my fixed mortgage
comparatively cheaper.