Well, it's been more than a year since I put on the Zimbabwe Ben trade, buying a house I knew was overpriced in order to take advantage of the Federal Reserve's destruction of the dollar.
How's that working out? I'm spending roughly double the rental value on mortgage, property taxes, insurance, and maintenance. The house has lost another 5% - 10% in value, judging by recent comps. Transaction costs are around 2% on the buy side and at least 5% on the sell side. Zimbabwe Ben has managed to drive up the price of everything -- stocks, oil, food, gold -- except houses. Who would have thought that buying a house so long after the housing crash would still be such a bad trade?
I'm still confident that controlled demolition of the dollar is the only way forward with the government deficit spending 10% of GDP every year, and the economy still far too dependent on huge fiscal and monetary stimulus. There's no way that's going to be paid back in today's dollars. But waiting for dollar destruction is costly for those who bought too early, and didn't pay enough attention to valuation.
UPDATE: Maybe I spoke too soon.
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