Permanent Portfolio concept continues to live on

General Discussion on the Permanent Portfolio Strategy

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glennds
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Re: Permanent Portfolio concept continues to live on in cas

Post by glennds » Thu May 06, 2021 11:23 pm

D1984 wrote:
Thu May 06, 2021 5:58 am


Given that you seem to expect continued ZIRP/inflation/QE/monetary debasement that will lead to even more ridiculous housing prices, why would you NOT want a mortgage? If the mortgage is non-recourse why not take a loan with only 3.5% or 5% down--or even less down if you can find a bank that'll make such a loan--and if housing continues to skyrocket.....
I agree with this. Under normal circumstances I like the no-mortgage approach to life, but if you are convinced of inflation and monetary devaluation, then debt makes a lot of sense because you are buying an appreciating asset today, and paying back the debt with inflated dollars. In other words, the house is appreciating, the debt is depreciating, you win both ways. And as D1984 says, if the housing market collapses, then you can leave the bank holding the bag.
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tomfoolery
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Re: Permanent Portfolio concept continues to live on in cas

Post by tomfoolery » Fri May 07, 2021 3:42 pm

glennds wrote:
Thu May 06, 2021 11:23 pm
D1984 wrote:
Thu May 06, 2021 5:58 am


Given that you seem to expect continued ZIRP/inflation/QE/monetary debasement that will lead to even more ridiculous housing prices, why would you NOT want a mortgage? If the mortgage is non-recourse why not take a loan with only 3.5% or 5% down--or even less down if you can find a bank that'll make such a loan--and if housing continues to skyrocket.....
I agree with this. Under normal circumstances I like the no-mortgage approach to life, but if you are convinced of inflation and monetary devaluation, then debt makes a lot of sense because you are buying an appreciating asset today, and paying back the debt with inflated dollars. In other words, the house is appreciating, the debt is depreciating, you win both ways. And as D1984 says, if the housing market collapses, then you can leave the bank holding the bag.
I can’t get a mortgage. I am self employed and they require 2 years of tax returns. The IRS has a backlog of 2 million paper tax returns from 2019 still, including mine.
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pugchief
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Re: Permanent Portfolio concept continues to live on in cas

Post by pugchief » Fri May 07, 2021 4:17 pm

tomfoolery wrote:
Fri May 07, 2021 3:42 pm
glennds wrote:
Thu May 06, 2021 11:23 pm
D1984 wrote:
Thu May 06, 2021 5:58 am


Given that you seem to expect continued ZIRP/inflation/QE/monetary debasement that will lead to even more ridiculous housing prices, why would you NOT want a mortgage? If the mortgage is non-recourse why not take a loan with only 3.5% or 5% down--or even less down if you can find a bank that'll make such a loan--and if housing continues to skyrocket.....
I agree with this. Under normal circumstances I like the no-mortgage approach to life, but if you are convinced of inflation and monetary devaluation, then debt makes a lot of sense because you are buying an appreciating asset today, and paying back the debt with inflated dollars. In other words, the house is appreciating, the debt is depreciating, you win both ways. And as D1984 says, if the housing market collapses, then you can leave the bank holding the bag.
I can’t get a mortgage. I am self employed and they require 2 years of tax returns. The IRS has a backlog of 2 million paper tax returns from 2019 still, including mine.
Tom, not sure what that has to do with anything. Any time I have been required to provide a tax return (personal or corporate), I simply send a pdf copy that I saved prior to filing. No one has ever questioned this.
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Xan
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Re: Permanent Portfolio concept continues to live on in cas

Post by Xan » Fri May 07, 2021 4:19 pm

pugchief wrote:
Fri May 07, 2021 4:17 pm
tomfoolery wrote:
Fri May 07, 2021 3:42 pm
glennds wrote:
Thu May 06, 2021 11:23 pm
D1984 wrote:
Thu May 06, 2021 5:58 am


Given that you seem to expect continued ZIRP/inflation/QE/monetary debasement that will lead to even more ridiculous housing prices, why would you NOT want a mortgage? If the mortgage is non-recourse why not take a loan with only 3.5% or 5% down--or even less down if you can find a bank that'll make such a loan--and if housing continues to skyrocket.....
I agree with this. Under normal circumstances I like the no-mortgage approach to life, but if you are convinced of inflation and monetary devaluation, then debt makes a lot of sense because you are buying an appreciating asset today, and paying back the debt with inflated dollars. In other words, the house is appreciating, the debt is depreciating, you win both ways. And as D1984 says, if the housing market collapses, then you can leave the bank holding the bag.
I can’t get a mortgage. I am self employed and they require 2 years of tax returns. The IRS has a backlog of 2 million paper tax returns from 2019 still, including mine.
Tom, not sure what that has to do with anything. Any time I have been required to provide a tax return (personal or corporate), I simply send a pdf copy that I saved prior to filing. No one has ever questioned this.
I've been required to include a tax transcript, a document provided by the IRS with all the return details. I simply included a letter saying that I filed on time and that the IRS had yet to process it. No problem.
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Kriegsspiel
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Re: Permanent Portfolio concept continues to live on in cas

Post by Kriegsspiel » Fri May 07, 2021 9:56 pm

tomfoolery wrote:
Fri May 07, 2021 3:42 pm
glennds wrote:
Thu May 06, 2021 11:23 pm
D1984 wrote:
Thu May 06, 2021 5:58 am


Given that you seem to expect continued ZIRP/inflation/QE/monetary debasement that will lead to even more ridiculous housing prices, why would you NOT want a mortgage? If the mortgage is non-recourse why not take a loan with only 3.5% or 5% down--or even less down if you can find a bank that'll make such a loan--and if housing continues to skyrocket.....
I agree with this. Under normal circumstances I like the no-mortgage approach to life, but if you are convinced of inflation and monetary devaluation, then debt makes a lot of sense because you are buying an appreciating asset today, and paying back the debt with inflated dollars. In other words, the house is appreciating, the debt is depreciating, you win both ways. And as D1984 says, if the housing market collapses, then you can leave the bank holding the bag.
I can’t get a mortgage. I am self employed and they require 2 years of tax returns.
Ugh, yea I feel your pain. I wound up buying a move-in ready house for less than it would have cost me to flip a decrepit piece of shitl. PM me for details.
"You haven't, I suppose, ever mixed with politicians at close quarters. They're awful. I think some of these must have been the dregs anyhow, but I've discovered, what previously I didn't believe possible, that politicians behave in private life and say exactly the same things as they do in public. Their stupidity is inhuman.
- John Maynard Keynes
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Re: Permanent Portfolio concept continues to live on

Post by doodle » Sat May 08, 2021 3:18 pm

Anyone else have the feeling that houses are overated and this latest mania in them is some weird kind of cultural hysteria? I mean, it's great having a place of your own to sleep and store your shit but in general houses are a pain in the ass. Everyone I've owned was like having an 20 year old cat...something always needed attending to...lawns, gutters, windows, leaks, something always breaking, something always needing painting or attention..it's the ultimate ball and chain. These 2500 squarefoot particle board homes people are willing to pay half a million or a million for is a completely unintelligible decision for me.
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Re: Permanent Portfolio concept continues to live on

Post by doodle » Sat May 08, 2021 3:21 pm

Maybe thoreau was on to something...

I see young men, my townsmen, whose misfortune it is to have inherited farms, houses, barns, cattle, and farming tools; for these are more easily acquired than got rid of. Better if they had been born in the open pasture and suckled by a wolf, that they might have seen with clearer eyes what field they were called to labor in. Who made them serfs of the soil? Why should they eat their sixty acres, when man is condemned to eat only his peck of dirt? Why should they begin digging their graves as soon as they are born? They have got to live a man's life, pushing all these things before them, and get on as well as they can. How many a poor immortal soul have I met well-nigh crushed and smothered under its load, creeping down the road of life, pushing before it a barn seventy-five feet by forty, its Augean stables never cleansed, and one hundred acres of land, tillage, mowing, pasture, and woodlot! The portionless, who struggle with no such unnecessary inherited encumbrances, find it labor enough to subdue and cultivate a few cubic feet of flesh.
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Re: Permanent Portfolio concept continues to live on

Post by pugchief » Sat May 08, 2021 4:18 pm

doodle wrote:
Sat May 08, 2021 3:18 pm
Anyone else have the feeling that houses are overated and this latest mania in them is some weird kind of cultural hysteria? I mean, it's great having a place of your own to sleep and store your shit but in general houses are a pain in the ass. Everyone I've owned was like having an 20 year old cat...something always needed attending to...lawns, gutters, windows, leaks, something always breaking, something always needing painting or attention..it's the ultimate ball and chain. These 2500 squarefoot particle board homes people are willing to pay half a million or a million for is a completely unintelligible decision for me.
A friend of mine grew up in the Soviet Union in the 60s, 70s and early 80s. He tells stories of the 'free' housing they had there. Yes it was free*, but it was also a 2 room, 500 sqft apartment for an entire family and a common bathroom and common kitchen that was shared with 2 other families. He now has a 2500 sqft 'particle board house' in the suburbs he paid to acquire, pays to upkeep and is constantly burdened with mowing the lawn, repainting, etc. Guess which arrangement he likes better. ::)


*There is no such thing as free housing, health care, or college. You pay for that thru taxes and inflated cost of goods. Duh
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I Shrugged
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Re: Permanent Portfolio concept continues to live on

Post by I Shrugged » Sat May 08, 2021 6:41 pm

There should be more choices for newer single family homes that are less than 2000 ft but are nicely built in decent places. My wife grew up in a prosperous suburb in a 1200 ft 3/1.5/2 car garage ranch house with a basement and a nice yard. I thought it was just right. There were no big splashy rooms, obviously. The eat in kitchen was compact but it worked.

If you went to build that today, you'd be crazy. Although at these lumber prices, maybe not.

The other side to the particle board argument is that almost all houses in the US are junk after several decades anyway. Even the well built ones.
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Re: Permanent Portfolio concept continues to live on

Post by vnatale » Sat May 08, 2021 7:06 pm

I Shrugged wrote:
Sat May 08, 2021 6:41 pm

There should be more choices for newer single family homes that are less than 2000 ft but are nicely built in decent places. My wife grew up in a prosperous suburb in a 1200 ft 3/1.5/2 car garage ranch house with a basement and a nice yard. I thought it was just right. There were no big splashy rooms, obviously. The eat in kitchen was compact but it worked.

If you went to build that today, you'd be crazy. Although at these lumber prices, maybe not.

The other side to the particle board argument is that almost all houses in the US are junk after several decades anyway. Even the well built ones.


In what ways?

I bought my house 39 years ago. It was built in the 1945 to 1950 time period. It was built by a former neighbor, a Portuguese immigrant, who also built his house, the house next to me, a (former gas station) almost next to me, another house across from that structure. Mine is 900 sq ft ranch with a 500 sq ft garage, a full cement basement, and on 0.4 acres.

During the time period when I was looking at my house when considering whether or not to buy it, I had a friend look it (who at the time owned a wood working business). He told me that it would be a low-maintenance house. And, that is has been over my nearly almost four decades of owning it. I've many times thought of asking him on what factors he based his opinion. Hopefully, the next time I see him I will remember to ask him.

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