The famous baseball player Yogi Berra (not kidding) said that immortal line many years ago. I was reading a book recently called "Rich Dad Poor Dad - The Cash Flow Quadrant" and it promised to make me a millionaire before breakfast (just joshin'). Actually bits of it are very interesting and other bits, well not so. Anyway I got to chapter 9 and nearly choked.
Now upfront folks economics does leave me with that glazed over eye thing going on but I stick with it on the basis that I might learn something useful. In short this book was written in 1999 by a wealthy American with the idea of making the rest of us wealthy or even more envious depending on your desire to "self improve".
In a nut shell he spoke about a change to US tax laws in 1986 that precipitated the Wall St crash in 1987. Real estate (house) prices fell all over the US some by as much as 70%. Most of the property owners were Doctors, Lawyers, other highly paid professionals and many small business owners who had been advised to buy property to avoid paying tax (I think).
The outlook for many people was years of tax payers paying for decisions that they never made for property that many never owned with the conservative estimate for sorting out the slurry 10+ years. So the government established a Bank Resolution Corporation (a wha Gay) to solve these woes. Their main course of action was to put these properties in the hands of private individuals who knew what to do with them (anyone? anyone?).
Bob (the author) says that for people like him (private investors) this was boom time, and his many millions were made whilst "Joe plumber" paid for everything.
Now as I said I'm not an economics head but does anyone else see a pattern,trend,same bloody thing all over again. I would appreciate a master class if I have this all wrong.
It's deja vu - all over again!
No comments:
Post a Comment