The media is definitely playing a game of sleight of hand with the American people. Since 1944 the US dollar has been the world reserve currency for trade. In recent days and because of current administration policies, we have started to see a change in our monetary policy and the world is starting to take notice. The Yaun (which is China’s currency) seems to me transforming other countries policies. China has seen issues that are related to the US dollar (saturation of currency) that possibly can be overcome by their currency.
Now what does that mean for us in America? That means that we may be facing particularly egregious inflation fairly soon. Some are even saying hyperinflation. Just the other day I was speaking to a potential client that had $2 million in the bank. They had that money in there for the past two years. They did some short-term investments so that they could generate some interest on that money. However because of the volatility of the market sometimes they were up and sometimes they were down and basically broke even with their $2 million. They wanted to have liquidity in their money so that they could potentially purchase a very high CAP Rate location (10%+ they were looking for). The issue remained that their buying power with that money over the course of two years has gone down about 20%. So even though they had $2 million in the bank their buying power was worth $1.6 million in a matter of two years because of inflation. By trying to swing for the fences, they ended up losing quite a bit of their buying power.
Keep in mind this is also assuming that local and larger centralized banks will remain solvent. The Treasury Department has already claimed that they WILL NOT bail out all deposits for other banks as they did with SVB & Signature Bank this past month.
So how can people protect their money? One of the most important answers to this question is real estate. Some may say precious metals, however those can be lost, stolen, taken away, destroyed, ordered to be given to an unruly family member, etc. real estate even though it does fluctuate in price, it IS a very secure asset. And it is a hard asset. The money you invest in that property is still backed by that property itself. It's not like a stock that if a company goes bankrupt you could lose your entire investment. Or if the government takes over your bank where your deposits are because of solvency issues, your money is simply gone after a certain amount. So even if the value of the property goes down, it will eventually go up historically (notwithstanding any natural disaster). With the current monetary issues that surround us, real property appears to be one of the few options available to people who are afraid of a total banking meltdown. Property/Land is one thing that is gone back since the beginning of time. With it you can grow food, conduct commerce, generate income, increase the value of your initial investment, you can use it as shelter, wars have even been fought over it.
Are you interested in Real Estate, Investing, or worried about your money in a bank? Call me, Erick Kuvshinikov, at 951-428-4373 or visit YourHatHere.com
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