Real Estate – Leverage – Transition to the Reset

QUESTION: Hi Mr. Armstrong,

Thank you for the daily blogs on world events with an independent analysis that makes sense. I find them better than investment bank reports that just make up the pages.
Could you please elaborate on what happens to properties when the monetary reset comes? If people lose confidence in fiat money and hoard real assets, wouldn’t that be a positive thing for properties? Or only if they are bought out in full (i.e. no mortgage)?
Thank you.
Regards,
S
ANSWER: The problem with real estate is the LEVERAGE. The value of a house has been escalated due to the fact that in the USA you can borrow using 30 years of future income. The crisis that unfolds is the collapse in the mortgage market. Then we will see a deleveraging of real estate. However, that said, real estate makes the transition as a hedge during a reset.  For example, during the German hyperinflation that led to a currency reset, that new currency that was issued was backed by real estate – not gold. Keep in mind that as the currency declines, then the repayment cost of a mortgage declines. One the one hand, mortgages will be unavailable but those who hold the mortgage lose the most. Therefore, you should be able to pay off your mortgage with cheap currency assuming you have hedged and make it through the transition.

Latest Posts

How the Clintons Destabilized Haiti

Haiti has been propelled into a downward spiral ever since the Clinton Foundation stepped in to “help.” They have successfully destabilized the nation. Haiti is now a lawless land ruled [...]
Read more

The Next Greta? Meet Xiye Bastida

The World Economic Forum has spoken and chosen its newest climate change darling – Xiye Bastida. Greta Thunberg has been replaced by a more diverse candidate from the Otomi-Toltec Indigenous [...]
Read more

Bloodbath Propaganda

A quote by former President Trump was completely taken out of context and used by the leftist media to create an ongoing propaganda campaign. I will note the full context [...]
Read more