Does New Min. Wage Hike Mean More Recession Or "Is it Indicative of the Coming Inflation?"

By
Real Estate Agent with The Fischer Investment Group

CONFUSING THE PUBLIC – DOES THE NEW MINIMUM WAGE HIKE MEAN MORE RECESSION OR IS IT INDICATIVE OF THE COMING INFLATION?

 

Today’s AP article on the coming wage hike, as published on CNBC.com (see the highlighted link below) seems to suggest that this could foster an extension of the recession by forcing small businesses to lay off some workers.    http://www.cnbc.com/id/32122154/.  

In my opinion, this is a typically short sighted point of view. 

To the contrary, this is just another indicator of the coming massive inflation.  How is that?  Well, by laying off menial labor positions (often part-time or short term positions at best) small businesses will be forced to operate more efficiently and therefore more economically.  The laid off workers could then find more useful employment elsewhere.  Once operating at peak efficiency, with a smaller minimum wage based staff, some small businesses might nevertheless find it difficult to achieve reasonable profitability.   

Under these circumstances, many small businesses might be forced to turn to the only recourse left; that is to increase prices.  Price increases are just one more reason for the coming inflation which I have been predicting for some time. 

The key issue for us investors is how to take advantage of the substantial inflation which is sure to be just around the corner.  We have dealt with this by starting to buy unique housing deals in Southwest Florida (Ft Myers, Cape Coral, etc.).  Housing prices have risen in this area by about 20% during the last three month.  Sounds strange for these times, doesn’t it.

The reason for this strange result is that the area suffered from a serious price downturn, due to the housing market.  However, it has tremendous potential and appears to be benefitting from a V-shaped upturn.  We have homes available to you, as an investor, as much as 50% below worst case scenario replacement cost, and 50% below tax assessed value.  In addition, for the first time, these homes are available to you leased prior to closing.  For the most part, these homes will be lease optioned to your tenant so that you will have a 1.5 year exit strategy with a 200% return on investment, and positive cash flow as long as the property is rented.

 

Comments (1)

TIM MONCRIEF
Tim Monciref - Austin, TX
Over 2,000 homes sold…..

It is all about making yourself look good to your voters.  They will, as usual, forget the causes and not understand the consequences, but they will remember that Congressman Joe got them a pay raise, and he's got my vote because I need another pay raise as things are getting more expensive.

Jul 27, 2009 08:28 AM