Tuesday, July 14, 2015

Donald Trump Wants YOU To Have Affordable Housing!

There are two major factors that have made housing in America so unaffordable to most.  The first is of course the destruction of the dollar by the FED.  However this could be offset by wage inflation which brings us to our second factor, declining wages and joblessness.  As the FED is clearly responsible for the devaluation of the dollar, so is international trade the cause of wage destruction fro American workers.  One of the candidates for president understands this quite succinctly.

From The Donald's 2016 Presidential Announcement...

"They can’t get jobs because there are no jobs because China has our jobs and Mexico has our jobs.  ...And the people are saying ‘What’s going on? I just want a job. I don’t need the rhetoric, I just want a job.'
  I tell you I’ll bring back our jobs from China, from Mexico, from Japan, from so many places. I’ll bring back our jobs, and I’ll bring back our money.  Free trade can be wonderful if you have smart people.  But we have people that are stupid. We have people that aren’t smart, and we have people that are controlled by special interests and it’s just not going to work...

Now Ford announces a few weeks ago that Ford is going to build a $2.5 billion car and truck and parts manufacturing plant in Mexico.  $2.5 billion. It’s going to be one of the largest in the world.  ...I would call up the head of Ford, who I know. If I was President I’d say ‘Congratulations, I understand that you’re building a nice, $2.5 billion dollar factory in Mexico and that you’re going to take your cars and sell them to the United States. Zero tax - just across the board.’  And you say to yourself, ‘How does that help us, right? Where is that good.’ It’s not  So I’d say ‘Congratulations, that’s the good news. Let me give you the bad news. Every car, and every truck and every part manufactured in this plant that comes across the border, we’re going to charge you a 35% tax. Okay? And that tax is going to be paid simultaneously with the transaction, and that’s it."


I'm not suggesting Donald Trump will be president.  But much like Ross Perot 24 years ago Trump understands the perilous position international trade places the American worker.  Trump has the advantage of speaking with hindsight as opposed to Perot's foresight.  American labor has been devastated by NAFTA, China's favored nation status and every other shit trade deal that has been rammed through since Clinton.  Donald Trump has the potential to be Ron Paul, Bernie Sanders and Ross Perot rolled into one.  With the expanded media exposure of non-political celebrity to spread the message.  It is a message average Americans need to hear and clearly understand.  Housing is paid for with wages and Donald Trump wants you to earn a higher wage.

Housing, nor any other asset or commodity can never be truly affordable nor endure true price discovery unless America pulls back from the faux-free-trade and fiat money abyss. The Pauls, Sanders, Perot and others have tried to spread this message but their stage was to small.  Donald Trump is the first person with his level of celebrity and influence to tackle what is the core problem in our nation.  The income and opportunity disparity in America that has it's roots in the destruction of our manufacturing base and currency.

Perhaps this whole campaign is an ego trip for a most eccentric billionaire.  Even if that proves true, Donald Trump is now working Americans loudest voice in the 2016 presidential campaign.  He seems to be reveling in the role.

Read his entire announcement speech here: 
NY Daily News - Transcript of Donald Trump’s 2016 presidential announcement

8 comments:

  1. Will be interesting watching him go forward. Will he be a sideshow, or will there be actual legitimacy behind him. Hard to tell at this point.

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    1. I think the main thing is the mesasge getting out to the American people that we do not have to be slaves to supra-national corporations and international trade. People can see the wreckage of America's manufacturing base and now here is a multi-billionaire saying "Your leaders have failed you. They are solely responsible for the jobs leaving this country." The media is attempting to make it all about the immigration rhetoric and Donald being "The Donald". However if he delivers the same acerbic take down of our trade policies of the last 20+ years in the debates as he did in his announcement speech he will have effectively changed the conversation in ways that will make all the candidates (sans Rand Paul) uncomfortable. If the Donald can get the American people to focus like a laser on jobs and monetary policy (he had some great things to say about China's currency manipulations, but I wanted to keep the article concise) he'll have really done something. So many in America know things are bad, but they don't know WHY things are bad. Unfortunately Ron and Rand Paul's academic approach doesn't speak to Joe Six Pac, Donald Trump's Billionaire-Outsider-With-An-Attitude does.

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  2. Nihilist! I want to hear your thoughts on the upcoming rate raise. What does it mean for housing? I've read several articles that say rising rates don't have a direct affect on housing prices. That true? Will the effect be solely psychological?

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    1. Interest rates higher always means asset cost is lower. Cheap Money = Higher Asset Prices. Expensive Money = Lower Asset Prices. The FED doesn't directly control mortgage rates, but the FED rate influences a lot of things that should drive mortgage rates higher. Market psychology is what will drive this downturn, same as last time. Once people see prices falling the buyer's instinct is to wait while the sellers instinct is to sell as quickly as possible to protect from further losses. As I said in the most recent post, the fact that so many properties are held by investors as opposed to the families of HB 1.0 makes the unwinding potentially swift.

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    2. So do the investors start to bail to protect themselves from drops in price, or because they can get better returns somewhere else? Just wondering are investors in it for the long run, and if not, what will "look better" to them?

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    3. Investors have debt. All these REITs and individual specuvestors made cash purchases with other people's money. They will face what is essentially a "margin call" on these properties. The one's whose cap rates don't add up will be liquidated. There are no "buy and hold" long term investors in SFHs. There's no money in that strategy. It's flip-or-die so to speak. Beyond that you will have the normal inventory coming from people who simply have to sell for whatever reason. Inventory is coming to market just as the specuvestors are exiting and the cost of borrowing is set to rise. It's going to be an interesting next 2-3 years. 2017-18 is looking like a really solid time frame for those of us in wait.

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  3. First of all search for the businesses in the Middle East. That is suitable for individuals. But assured beside that work persons must have a small industry in Middle East. Because living in the Middle East especially in Dubai is luxurious. And to purchase property in Dubai via ezEstate Dubai is costly. Individuals will buy some property in Dubai they will immediately get a permanent permit.

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  4. AS A RECENT POLL ASKED - WOULD YOU PAY MORE FOR GOODS MADE IN USA, IF THEY COST MORE. SUCH AS A PAIR OF PANTS MADE IN USA FOR $85 OR $50 DOLLARS MADE OUTSIDE US. 85% SAID THEY WOULD BUY THE $50 PAIR. WE ONCE HAD STORES SELLING MADE IN US - THEY ARE NO LONGER, WHY - PEOPLE WANT CHEAP PRICES FIRST. THAT WAS A BIG DIFFERENCE BUT EVEN A DOLLAR OR TWO MADE A DIFFERENCE.

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