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In an inflationary economy real estate with long term debt.?
I contend gold is nice, but if we get to the point where it is needed to trade or purchase, lead & brass will be a much more valuable asset. Won't the real estate ride the ride up in value as the dollar falls & interest rates rise, just like gold?
1 Answer
- simplicitusLv 71 decade agoFavorite Answer
Do I think we'll get back to the point of using gold coins and gold powder to pay for things? Not in my lifetime.
As for lead and brass, they are heavy (hence inconvenient) and aren't worth very much. I see no future for them as a money.
http://en.wikipedia.org/wiki/Commodity_money
Real estate is not like gold. Real estate has value only because people are willing to pay for it. For commercial real estate, what they are willing to pay depends on how much profit they can make located there rather than elsewhere. So if the economy is not doing well, real estate prices can be expected to fall with everything else.
Furthermore, when interest rates rise, mortgages are more expensive, so demand for any kind of real estate goes down. That too will drive prices down.
Why is gold different? Gold is portable; real estate is not. Gold is easily stored at low cost, real estate is not. etc.
