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Daniel R. Amerman, CFA, DanielAmerman.com
When a financial bubble bursts – can it
be reflated? And what are the risks for
all of us the reflation attempt fails?
In this article we will briefly review
the six factors that came together to create the real estate bubble in the
United States. As we will cover, the
government has deemed a return to a normal housing market – one which is governed
by market forces – to be politically unacceptable. Instead, an artificial mortgage market has
been created with massive interventions in three different categories as the government
attempts to reflate the housing bubble. Quite
a risky undertaking, but the politicians have decided they are willing to risk
everything the taxpayers and savers have, in an attempt to remain in
office. These interventions include the
Federal Reserve effectively creating money out of thin air to fund almost the
entire mortgage market at below market rates.
We will explore why the three interventions will not succeed in
replacing the six sources of the bubble, and the severe risks for all of us
when attempting the economically impossible becomes politically mandatory. We will close with a discussion of the likely
implications for the housing market and the value of the dollar, as well as a
brief discussion of alternative solutions for protecting your net worth.
A number of factors came together to
create the housing price bubble that was experienced in the United States
during the early to mid 2000s. Perhaps
the central element was a quite deliberate Federal Reserve easy credit policy
that led to the lowest mortgage rates that had been seen since the 1970s, which
made purchasing houses the most affordable that they had been in a generation.
Qualifying for mortgage loans is not so
much dependent on home prices, but rather the ability to afford mortgage
payments. As an example, let’s consider
a family with the median household income for the United States in 2009 of about
$50,000 per year (Census Bureau estimates).
Pre-bubble underwriting standards
were that mortgage payments should take no more than 28% of household income, which
meant $1,167 a month would have been the maximum available for mortgage
principal and interest payments.
According to Freddie Mac statistics, the average 30 year fixed mortgage
rate between 1972 and 2006 was 9.31%. If
we take the median $50,000 per year income and an average 9.31% mortgage rate,
that means that the exactly median household in the US qualified for a $141,000
mortgage, and assuming 20% equity, a $176,000 house.
During the rapid growth of the housing
bubble, fixed mortgage rates spent much of their time in about the 5.50% to
6.00% range. When we change our mortgage
rate to 5.75%, then a family with that same median income of $50,000 per year
can now qualify for a $200,000 mortgage, an increase of about $60,000, or almost
half again as much mortgage (and home price).
During the peak insanity of the housing
bubble – an insanity in plain view that was enabled by the federal government as
well as Wall Street and the rating agencies – subprime mortgages were being
underwritten at one year teaser rates such as 3.5%. At such rates a family with an income of $50,000
a year could “afford” a $260,000 mortgage, or almost twice the mortgage of a
decade before, which enabled a near doubling of real estate prices. At least until the interest rate
contractually reset, at which time the family would have no known means of
making the payments, but Wall Street and the rating agencies providing
investment grade ratings were far beyond being concerned with such trivialities
by this point.
However, the plunge in mortgage
interest rates was not enough to create the full housing bubble. Even a $260,000 mortgage wasn’t sufficient to
buy a new home in many desirable markets where prices were surging; the income
simply wasn’t there to sell the average home to the average worker. Many people also lacked the large down
payments, the equity component of home purchases. So the solution was to simply allow people to
borrow their down payments in the form of 2nd and 3rd
mortgages that closed simultaneously with the 1st mortgage.
An additional hurdle was that the
historical standard of 28% or 30% of income was insufficient to make payments
on the new, larger loans. Now, those
standards were far from arbitrary – many decades of mortgage underwriting
history had shown that most people could handle housing payment burdens of that
size relative to their income, but things got “iffy” above those levels. However, in the early years of the new millennium,
accepting those traditional limitations was unacceptable, as not enough people
could buy homes at ever rising prices. So
the standards were changed. People were now
allowed to borrow a total of 35%, or 40% or even 45% of their annual income in
total required mortgage payments (including 2nd and 3rd
mortgages).
With this combination, we were really
getting somewhere in terms of “affordability”.
Take a family with the median national income of $50,000 a year, let
them borrow at a one year teaser rate of 3.50% (with everyone involved pretending
that will be the rate for the entire term of the mortgage), let them use 45% of
their income to cover the package of mortgages that ensures no actual savings
are needed to help fund the house – and they could now “afford” a $418,000 mortgage and a $418,000 home
($50,000 income, 3.5% teaser rate, 45% of income to 1st & 2nd
mortgages).
This was still not enough, however, for
people with a bad history of repaying small loans were being kept out of the
market for large loans. So they were
allowed in with the explosive growth of subprime lending, and were allowed to
borrow their down payments, even while the percentage of income available for
housing shot upwards. Changes in
underwriting standards may sound a bit obscure, but the practical result was
that a family that couldn’t have bought a home of any kind in 1996, due to
their lack of savings and poor credit history, could now buy $400,000 and
$500,000 homes.
So let’s review. Going from a historical average 9.31% 30 year
fixed rate mortgage to underwriting based on fixed mortgage rates of 5.75%
boosts the amount that can be borrowed – and the home that can be purchased –
by 42% (Step 1). Underwriting at a
teaser rate of 3.5% on a one year adjustable rate mortgage boosts the amount
that can be borrowed even more, up to a total of 84% (Step 2). Going from 28% of income being allowable for
housing payments to 45% of income (combined 1st & 2nd
mortgage), separately boosts the amount that can be borrowed by 61% (Step 3). Combining the lower rate and more aggressive
underwriting standard boosts the maximum amount of the mortgage by 196% (1.84 X
1.61 = 2.96), as the amount that can be borrowed by a family with a $50,000
annual income rises from $141,000 to $418,000.
Add in an expansion of the homebuyer pool to include those who don’t
have enough excess income to save down payments (Step 4), thereby increasing
the competition for each home. Add in an
expansion of the homeowner pool to those who have poor histories of repaying
loans (Step 5), further increasing the competition for each home. This 1-2-3-4-5 combination needs only one
more ingredient to predictably set off an explosive rise in housing prices.
Home prices rose as payments fell and
more buyers entered the market; human nature came into play and a speculative
frenzy was born (Step 6). People looked
at the sharp home price increases that were happening, month after month. They saw the new easily available credit that
was flooding the market, with banks competing to offer massive loans allowing
the purchasers to buy houses with essentially no money down, even if the
borrower didn't have the means to pay for it.
Millions of people quickly saw
that buying and flipping homes would make them far more money than just about
any job for which they could qualify. So
a speculative frenzy kicked in that drove prices higher and higher as it drew
more and more people in.
This of course led to an unsustainable
environment. Because of the speculative frenzy, because of the easy underwriting,
home prices reached levels in many metropolitan areas where the average family
couldn't afford the average home even at very low mortgage rates. On the
underwriting side, loans were being made to individuals with poor credit histories
at teaser rates, where those individuals had no known means to make their mortgage
payments when the interest rate inevitably reset as part of the contract. The time had come when the popping of the
bubble was inevitable.
In the aftermath of this bubble it is
quite clear what the housing market wants to do. Like any market that is
recovering from a frenzy, what it seeks is sustainable equilibrium. Those are
the fundamental economic forces in play here.
What the housing market wants to do is
reach a place where the average creditworthy and stable middle-class family can
afford an average home, spending no more than about 30% or so of their income
on housing. For this to happen, prices
truly must be much lower than they were at the peak in places like Southern
California, Las Vegas, Arizona and Florida. Those were simply unreal prices. If the average home is completely unaffordable
to the average buyer, but there are sellers who must sell, then the basics of
economics tell us that prices must drop until sellers can find buyers – as with
any other market.
Obviously, the specifics vary by the
market, and this doesn’t mean that three bedroom homes on big lots in good
neighborhoods suddenly drop below $200,000 in Southern California. But it does mean that townhomes with postage
stamp lots and a long commute have to return to a place where mortgage payments
are realistically affordable for a college graduate earning the prevailing wage
in that area.
In terms of mortgage rates, where the
market wants to go is to a place where private lenders are bidding against each
other with gusto to make mortgage loans, because the risk return combination is
healthy and attractive to them. They are being substantially rewarded for
taking the risk of funding housing.
Now what this translates to is
materially higher mortgage rates, almost by definition. The reason the Federal Reserve has taken the
unprecedented step of maintaining massive monetization to fund the mortgage
market is that the alternative of mortgage lending by private participants
would have been at unacceptably high interest rates. If true market rates return, this likely means
that payments rise for the given price of a house, which then drives down the
prices still further until home prices reach a point where – at market interest
rates – the average family can afford the average home.
Unfortunately this return to normalcy
is very difficult for many millions of truly innocent homeowners. By truly
innocent I’m not referring to the people who in many cases were quite knowingly
speculating in the housing market, or to those who never should have been able
to buy a home in the first place. No, the
truly innocent are the responsible, middle class families who could afford a
home before this bubble occurred, and would have a healthy equity in their
homes right now in ordinary circumstances. However, during the heart of the housing
bubble they needed homes, and had no choice but to pay much more than what those
homes should have been worth.
Which has left them with significant economic
damage at this point, as they are effectively underwater in their mortgages by
quite substantial sums. These families
are essentially locked into their homes for the indefinite future, unable to
leave, unless they either take a major loss on their home and come up with cash
to pay for that, or destroy their credit rating. These millions of families are the true
victims of the reckless actions of Wall Street and the Federal Reserve in
creating the bubble.
There is the economic reality which we
were just reviewing, and simultaneously there is something entirely different: political reality. Looking at the situation, the politicians in
the United States collectively determined that they could not accept economic
reality. There was too much bad news there, which would lead to too much voter
discontent, which would translate to too many incumbents losing elections.
So the decision has been made to make
an all-out effort to support the housing market, regardless of the cost and the
risk.
Now, we're not really talking about
cost and risk for the politicians. They
are not, nor have they ever been, the ones who are truly bearing the risk. Rather, it is you and I bearing the risk and
bearing the costs. The politicians have
made the decision that there is no limit to the cost they're willing to pass on
to all of us to get housing to a politically acceptable place, and there is no
limit to the relative risk that they are willing for us to take. In other words, there is no limit to the financial
risk for you that the government is willing to take to stay in power.
So a massive, historically
unprecedented intervention by the government has been the result. An enormously expensive intervention by a
government that already couldn't pay its bills.
Even as the housing bubble was created by the convergence of five
mortgage finance factors (not including human nature), the government’s efforts
to prop up housing prices fall into three broad categories.
The public face of the government’s
efforts to support the housing market are the homebuyer tax credits, as
featured in all the headlines. These
are tax credits of up to $8,000 for first time homebuyers and $6,500 for
previous homebuyers. Some estimates are
that total tax credits will end up costing the government about $20 billion in
foregone tax revenues.
This could be viewed as an explicit
partial socialization of home purchases, where homebuyers who supposedly act in
the national interest by purchasing homes are funded by the rest of the
population. Another way of looking at it
is every household in the United States pays an average of $180 each, so a
lucky few households can get up to $8,000 each.
In some ways, this could be viewed as a partial funding of the down
payment for homes, allowing people to participate who otherwise would not, thereby
supporting the market.
The homebuyer tax credits are a very
explicit short term attempt at market manipulation. As soon as the tax credits
stop, the housing market can be expected to seek whatever levels it would've
gone to if the tax credits had never existed in the first place. Indeed, the market may even temporarily fall
further than it otherwise would have, because anyone who could have reasonably
purchased a home and benefited from the tax credit would already have done
everything in their power to do so, thereby depressing the pool of homebuyers
for the months or years after the program ends.
While they are the best known facet of
the government's housing support program, and the only component where the cost
is being openly included in the federal budget and voted upon in Congress, the
homebuyer tax credits are arguably the least important of the big three housing
support programs.
A more important form of governmental
support for the housing market is both more obscure than the homebuyer tax
credits and potentially much more costly to the nation as a whole. As previously discussed, it was the
relaxation of loan underwriting standards that drove the expansion of the
housing bubble as much or more than the reduction in interest rates. The popping of the housing bubble effectively
destroyed the use of private mortgage underwriting standards. Private investors no longer want to take
mortgage credit risks, at least not without payments of substantially higher
fees and severe restrictions on who qualifies for loans. Which would be politically unacceptable.
Therefore, the overwhelming majority of
mortgage financings these days have to meet the underwriting standards of FHA,
Fannie Mae or Freddie Mac. These
entities now effectively bear the credit risk – the chance the homeowner won't
make payments and the losses that then need to be taken – for nearly the entire
mortgage market. Since the failure of
Fannie Mae and Freddie Mac and their takeover by the federal government, this
means that the federal government directly controls virtually all aspects of
the mortgage credit process, determining who gets mortgage loans, how large of a
mortgage loan they get, and under what conditions. The federal government determines the standards
for loan to home value, for payments to income, for what constitutes income for
underwriting purposes, for credit scores, and far more. This is terribly dry and obscure stuff, and not
at all suitable for headlines or passing coverage by TV news anchors, despite
being more important than the far more public homebuyer tax credit programs in
determining how many people can afford how much house in the real world.
Along with the federalization – that
is, the straight up politicization – of mortgage underwriting comes the
complete socialization of mortgage credit risk.
The federal government sets the standards because it is willing to bear
the cost of all the mistakes, for all the loans that go bad, for the entire
housing market.
Except that, of course, the federal
government doesn’t really take any losses.
It’s you and I who take the losses and bear all the risk.
So a more accurate way of phrasing what
is happening is that political appointees under instructions to keep the
housing market propped up regardless of costs – and effectively operating
almost out of view of the media and the public – are taking massive risks in
the name of extending credit to as many homebuyers as possible. Expensive risks that could dwarf the
homebuyer tax credits – but that don’t have to be included in the budget. After all, the losses haven’t occurred yet,
and can therefore be quite easily made to disappear through the flexible use of
optimistic assumptions.
There is no way for anyone outside of
the government to quantify the full extent of the risk, and it is indeed
unlikely that anyone inside the government is keeping track on a multiagency
basis (with real world assumptions anyway).
However, recent congressional testimony about the Federal Housing Administration
can provide insight into a small part of the bigger picture. FHA is in big trouble, with reserves down to
about 0.5% of mortgages insured, compared to the legally mandated 2.0%
minimum. The agency is treating mortgage
modifications by people who previously couldn’t pay their mortgages, as if they
were essentially of the highest credit quality, rather than subprime. Yet at the very same time, the FHA
commissioner assured Congress that there wouldn’t be any problems. A political appointee telling incumbent
politicians exactly what they wanted to hear, which was that the housing market
could be aggressively supported through government guarantees of questionable
but politically desirable loans -without worrying about bothersome technical
details.
The headlines about what has been
happening with the complete politicization of lending standards for one of the
largest loan markets in the world may indeed become quite common – after it is
already too late.
The Federal Reserve had already created
close to $1 trillion through straight-up monetary creation as covered in my
article “Creating A Trillion Out Of Thin Air” for a short-term intervention in
the commercial paper market and emergency bank lending. It was a daring risk, a tremendous risk on a
scale that was unprecedented. On a scale
that risked the value of the dollar itself, and therefore put in peril the
value of all of our savings.
The Federal Reserve succeeded in their
first gamble. The original plan, as
covered in my article ”Containing Inflation Via Unlimited Money Creation: The Fed’s Strategy“, was to quickly return
that cash to the void from whence it came, before the value of the dollar was
jeopardized. However, because of the
problems in the housing market and political requirements, the Fed took a
different approach. They doubled down and more as they took that fabricated money,
and instead of getting rid of it, they just put it back out in a much riskier
strategy than the original one. What the Federal Reserve did was create an
entirely artificial market for mortgages, which means an entirely artificial
market for housing. The Federal Reserve wanted mortgage rates lower than what a
rational private lender would loan at.
So the Fed effectively bought the
entire new mortgage security originations market, essentially funding every
conforming new mortgage that was coming down the pipeline, and thereby funding
the purchase of nearly every home that was being sold in the United States. With
the source of that money being the trillion dollars that had been effectively
created out of thin air. This put a
floor beneath the fall of the housing market, but it didn't create a healthy
market.
The economists at the Federal Reserve
know that this is an unsustainable and risky situation. They know that they can't indefinitely fund
an artificial market in the most real of assets through creating money out of
thin air, with no economic growth to support that money and no taxes to support
that money. So they know that they have
to leave. And they're saying that their
plan is to start withdrawing from the housing market by around the end of March
of 2010, and to steadily pull out. Indeed, the Federal Reserve is already
expanding its list of eligible counterparties for transactions designed to
drain the cash it created from the system, and the New York Fed has been
conducting live trial runs in the marketplace.
There are some complications here, however.
The Fed can do the fiscally responsible
thing and get rid of the excess money and unwind its positions, but what would really
happen if mortgage rates jump 1%? And what
if this shuts down a housing market which is already in pretty bad shape, and
is not responding all that well even to these artificially low mortgage rates?
Even worse, what happens if mortgage
rates rise 2%, and not just the housing market shuts down, but the construction
industry also stops in its tracks? What
do the politicians do at that point?
There are some crucial political
equations that we need to be taking into account here. Being that the midterm elections are
approaching, will the government really withdraw its support for the mortgage
market and thereby the housing markets?
Will the government be willing to endure steadily growing pain as the
economy likely plunges down along with the housing market, with voters feeling
ever more pain every month as the election approaches? Will incumbent politicians of either party voluntarily
lose the upcoming elections for the economic good of the country?
Or will they instead choose an approach
that stretches our fantasy mortgage and housing markets out just a little bit
longer?
That's the problem with a strategy like
this. There never is a convenient time to leave the strategy, because the
markets always want to return to fundamental levels. And the decision has already been made that
those fundamental levels are not politically acceptable. So any exit strategy may be doomed before it
even starts.
Housing prices have temporarily
stabilized, and have even recovered a bit in some areas, but some fundamentals
are getting even worse. Between five and
seven million homeowners are seriously behind on their mortgages, and may be
foreclosed upon at any time. The reason
they haven’t been foreclosed upon is that the banks have been under intense
political pressure not to foreclose on too many homes. This creates another form of artificial
market, where there is an overhang of millions of people living in homes upon
which they haven’t been making payments.
There are strong indications that the pace of foreclosures may pick up
again in 2010, in which case a flood of repossessed homes on the market could
quickly drive down prices.
This wave of foreclosures is however
quite different from the previous wave, because it isn’t about subprime
borrowers. It’s about responsible people
with good credit records who didn’t borrow too much – but have lost their jobs
in the greatest depression/recession since the 1930s. Prime mortgages extended to unemployed borrowers
are what most threaten the mortgage markets now.
Using my background as a mortgage
derivatives expert and author, in a series of public articles in early 2008, I
connected the dots as I saw them, and drew what seemed to me to be the obvious
conclusions: that the subprime crisis
would get much worse, and would have the potential to melt down Wall Street in
a week. Not from accounting losses, but
rather from creditors pulling loans from the highly leveraged financial giants
when they realized the extent of the losses.
I further predicted that the government would not allow this to happen,
and that instead there would be a massive bailout that would not only lead to
huge deficits, but necessitate the Federal Reserve resorting to creating money
out of thin air in an attempt to contain the damages. In other words – what has happened. While a number of people predicted
catastrophe, to the best of my knowledge, this makes me the only person to
accurately publicly predict not just that there would be a crisis, but how the
crisis would unfold, the government bailout, the Federal Reserve’s
monetization, and where the response to that crisis would logically lead: to the place we are covering in this article
in early 2010. In my opinion – this is a
time where some more dot connecting is badly needed.
(The referenced articles from early
2008 are “The Subprime Crisis Is Just
Starting”, “Credit Derivatives Dangers In 2008 & Beyond”, and “Why Inflation Will Trump Deflation”.)
All three components of the
government’s attempts to reflate the housing market are massive and need to be
understood – but they aren’t enough.
What history shows us is that there is no credible reason to believe
that an asset bubble can be successfully reflated in real terms
(inflation-adjusted) by a government.
The irreplaceable element required for an asset bubble is millions of
people who are not just willing, but eager, to risk their own financial
security to bid prices to irrational levels – even after just having been
burned in the same market only a few years before. Bubbles can quickly follow each other when
the market changes, as shown by the housing bubble so quickly following the
tech stock bubble. (Particularly when the
central bank deliberately intervenes to facilitate creation of the second
bubble, in order to mitigate the economic damage from the first bubble.) However, the public has to be able to
convince themselves that the second bubble really is different from the first
bubble that just burned them, and this is near impossible to accomplish in the
same market.
This is why the housing market has not
yet “recovered”, despite desperate and massive efforts by both the Federal
Reserve and the US Government. Everybody
just got burned in the last bubble, and it is very hard to get them to
participate in another bubble with what is left of their savings, particularly
in the midst of depression / recession.
To reflate the bubble requires people risking everything they have to
return prices to fundamentally irrational levels – and it’s no small wonder they
don’t want to do that. As fundamental as
this problem is however, it is also more or less irrelevant as a determinant of
government policy, for the reasons previously reviewed.
The Federal Reserve may be talking the
talk when it comes to the economic necessity of draining its artificial cash
from the system and exiting the mortgage market – but will it really pull out
just as foreclosures accelerate and new mortgage investors fail to return at
below market rates? During an election
year?
The complete control of credit
underwriting standards for the housing market by political appointees, with the
federal government unconditionally guaranteeing the results of those political
decisions – is financial dynamite.
Particularly when the explicit goals for the agencies involved are now
political, in terms of supporting the housing market rather than minimizing
losses. Off budget though they are now,
the eventual financial outcomes of this unprecedented change is sadly only too
predictable.
In more general terms – the question is
one of the public good versus the re-election of incumbents (in both parties,
this is very much a bipartisan issue, and has been so at each stage of creation
and response). If the value of the
dollar and of our investments that we have worked our lives to build are to be
preserved – then this extraordinary creation of an entirely artificial mortgage
market funded by an already bankrupt federal government must be abandoned. Even if the cost is the destruction of the
careers of many career politicians.
How do you think that decision will
work out?
And more importantly, what are you
doing to protect what you have?
We face a tragic situation for many
millions of people who have done nothing wrong.
Government policy and fundamental economics are combining to create a
situation of simultaneous monetary inflation and asset deflation. The government can’t reflate the housing
bubble, but the political dynamics require the attempt to be made. Even at deadly risk to the value of the
dollar, and to a lifetime of savings for many tens of millions of
households. So the value of the dollar
falls, the value of the assets fall, and eventually the fall in the value of
the dollar exceeds the fall in the value of the assets, thus finally creating
the façade of a reflating bubble in nominal dollar terms (but not
inflation-adjusted). False profits, existing only because the value
of the dollar is falling, are then generated across multiple asset categories, which
lead to inflation taxes, and the hapless average citizen ends up simultaneously losing the purchasing power
of their money and the purchasing power of their assets, while paying whopping
tax bills in the process.
This dire situation may appear
overwhelming, and even hopeless, if one is limited to conventional investment
methods. For these methods generally do
not provide solutions for even one of these three problems, let alone the
catastrophic damage that can be wreaked by all three working in
combination. However, the good news is
that where there is crisis there is also opportunity, and this crisis is indeed
rife with personal opportunities. When
we see with clarity and utilize unconventional methods, then simultaneous asset
deflation and monetary inflation can become an environment of investment
opportunity. Indeed it can be a
potentially “target-rich” environment, because so few investors see the world
in those terms.
As one example, this environment
creates major opportunities for precious metals investing. Unfortunately however, purchasing gold as a
simple monetary inflation hedge at the highest prices in a generation with no
protection from inflation taxes may lead to substantial losses for most
investors in after-inflation and after-tax net worth, even if gold does rise
to $10,000 an ounce or higher with an effective collapse of the dollar. When we buy gold or silver with an informed
understanding of how precious metals perform during a time of severe economic
crisis – with simultaneous asset deflation and monetary inflation – then we
have the ability to potentially create wealth on a multigenerational
scale. Because during crisis, gold performs
best as an asset deflation play, rather than as a monetary inflation hedge, and
if we don’t see that, then we may miss the best precious metals investment strategy
of our lifetimes.
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Real estate is where things getcounterintuitive. Yes, even if
substantial real estate price deflation persists in real terms over the coming
years, we can still potentially reap rich rewards through real estate
investing. Indeed, the Federal Reserve has created an unprecedented opportunity for wealth creation through its
actions. However, these opportunities
are not based upon the simplistic real estate investment methods of maximizing
leverage that are so successful when bubbles are inflating, but can be deadly
during a time of ongoing asset deflation.
Rather, to make money as a bubble continues to deflate even while
markets are systemically manipulated, we must play monetary inflation off of
asset deflation, using a calculated and deliberate methodology, and in the
process, create wealth in a risk-reduced and tax-advantaged manner.
Simply put, what we have reviewed in
this article creates a situation of enormous potential volatility. The pressure may be released at almost any
time, and in the process lead to a massive redistribution of wealth that
devastates most people, pension funds and governments. Conversely individuals can take personal
action to position themselves so that they benefit from this redistribution. The difference between individual peril and opportunity
is one of vision – and education.
Would
you like to find practical solutions to the issues raised in this article? Find out how to position yourself to
benefit from what happens when political decisions place the value of the
dollar at risk? Do you want to know how to Turn
Inflation Into Wealth? To
position yourself so that inflation will redistribute real wealth to you, and
the higher the rate of inflation – the more your after-inflation net worth
grows? Do you know how to achieve these
gains on a long-term and tax-advantaged basis?
These are among the many topics covered in the free “Turning
Inflation Into Wealth” Mini-Course.
Starting simple, this course delivers a series of 10-15 minute
readings, with each reading building on the knowledge and information contained
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on the course is available at DanielAmerman.com or InflationIntoWealth.com .
Contact Information:
Daniel R. Amerman, CFA
Website: http://danielamerman.com/
E-mail: mail@the-great-retirement-experiment.com
This article contains the ideas and
opinions of the author. It is a conceptual exploration of financial
and general economic principles. As with any financial
discussion of the future, there cannot be any absolute certainty. What
this article does not contain is specific investment, legal, tax or any other
form of professional advice. If specific advice is
needed, it should be sought from an appropriate professional. Any
liability, responsibility or warranty for the results of the application of
principles contained in the article, website, readings, videos, DVDs, books and
related materials, either directly or indirectly, are expressly disclaimed
by the author.
Copyright 2010 by Daniel Amerman