If USD collapses

[Aussie]

Property for me is a long term play. I am cashed up and with rates at these levels, it makes more sense for me to put my money in properties than in the bank. I have holding power and can ride out the storm. Property is part of my strategy in the portfolio, esp when I sold out all my investment property 2-3 years back.

Hey, I maybe wrong, but then I have holding power and can ride it out, esp when my investment properties are all cashflow positive.

Dr_Who, generally I like property too, but not at the moment. There's so much more uncertainty to come and a lot of it is going to affect banks and paper currencies and so by extension - the property market . . . and property is SO illiquid.

Personally, I'm bullish on property long-term. I think that there will be unbelievable property deals in the coming years.

But respectfully, a couple of questions . . .

Have you seen clear signs of a bottom in property yet? I see no blood in the streets. I don't hear of people despising their property investments and I see no signs of capitulation in the property market. I think the property slide has a ways to go yet.

This financial crisis is just beginning - not ending. IMO it has years to go. In the near future, property will have a lot less value if people find it hard to borrow because A) they lose their jobs and the market is flooded with inventory or B) the local banks continue to tighten lending or have problems sourcing overseas funds or people cannot come up with large deposits.

Have you protected at least a healthy portion of your wealth by investing in gold? If you leave your wealth in cash, you leave it in the hands of the government and the international bankers to manage for you. Remember, they can guarantee the number of NZD in your account, but they cannot guarantee its value! This storm may be bigger and more destructive than you can imagine.

For example, 12 months or so ago, my brother-in-law sold 1/2 of his dairy farm for NZ$1.7m. His timing was excellent. However, he thought he was being conservative by putting the money on deposit in the bank. While he was busy earning 8% in interest, he lost at least 35% or about NZ$600,000 in real world purchasing power via currency depreciation. He doesn't realize it now, but he will in a year or so when everything here is rising like the current price of petrol.

Not to put too finer a point on it, but even though my share portfolio is down 25%, my net worth in NZD is higher now than it was a year ago . . . ONLY because I have a substantial portion of it in bullion . . . it has been my saving grace!

Something to think about anyway . . .

Cheers