Worried about the Economy? Real Estate may be the best Hedge against Inflation.
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Nobody has a crystal ball, but based on past economic cycles, we are probably getting ready to see more inflation. Our Government continues to print money. Everytime they print more money, the dollar is devalued. Look at our National Economy. As the dollar is devalued, everything gets more expensive (Inflation). The current rising prices of Gas, Energy and Food are great expamples. This really is a perfect storm for Real Estate because Real Estate prices are at record lows and everyone is expecting inflation. Well guess what, if the dollar is worth less, your Real Estate will be worth more dollars!
About 13 years ago I worked on my MBA 'Masters of Business Administration" at UAB in Birmingham. I had a great Macro Economics class and the instructor spent many lectures discussing this exact situation. Traditionally, after the government prints all of the new money, they then have to curve inflation and avoid hyper inflation. Guess how they do this? They raise interest rates. If rates go too high, it may not be good for those wishing to finance a home, but it places money back into the system and back into bonds and this helps curve the inflation.
Everyone is buying Gold and Silver! I have actually purchased some gold and silver. These precious metals are a great hedge against inflation, but Gold and Silver are currently trading at record highs. Real Estate is trading at record lows. In my opinion, Real Estate appears to be a great option for those concerned about inflation and the value of the American Dollar.
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