Peter Schiff is the Author of Crash Proof http://www.amazon.com/gp/product/0470.... One thing that Peter sometimes talks about is how renting houses is sometimes better than owning a house. If you are a renter, people will say that you are throwing away your money. But that is like saying that you are throwing away your money on food or clothes. The idea is that if you are renting, you are throwing away the profits from the appreciation of your home. Now that the real estate bubble has happened, renters are wealthier than buyers.

If you are planning to move within a few years, then it is ridiculous to buy. The only reason to buy is to speculate on the price of your home. Maybe you bought because of a tax break, but that is just the government getting involved and distorting the market. Nothing was based on fundamentals; it is all based on the greater fool theory. It is the same thing in the stock market, where no one cares about dividends anymore.

In Las Vegas, the housing prices are so low that it is if you can buy the land and get the home for free. The reality is that those houses should never have been built in the first place. Home ownership is now at record levels, so where was the demand for home buyers supposed to come from? When the interest rate rises to 15% or 20% in the next few years, how is anyone supposed to afford to pay their mortgages?

Most people are in the stock market because they have bought into the nonsense that stocks will always go up. In a way, they are forced into the stock market or into the real estate market because that is the only place that they can get any kind of yield. People believed that the way to get rich in this country wasn't to work hard and save - it was to own stocks and real estate.

The government acts as if high home prices are a good thing. At the same time, they want homes to be affordable for everyone. The way that homes are affordable to people are for the prices to be low.

The debt that the United States has accumulated can never be paid off. It will have to be repudiated. CNN has said that savings is bad because the world goes around on debt. Keynes called this the paradox of thrift. The only paradox about this whole thing is that people are stupid enough to believe it.

Why is education so expensive? You used to be able to work a part time job while you went to school in order to pay for it. But it is so expensive now that it is impossible to do it. And it's not like the quality of college is any better - it's much worse. The cost of college is ridiculous, but everyone can afford it because they can go into guaranteed debt. The price of college isn't worth it. You might get paid a little more, but not enough to be worth it. Why would you want to graduate with a mortgage but no house?

VIEW HERE

http://www.youtube.com/watch?v=ECaObYrO_Yg