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Gold Value of Apartments Sinks

Submitted by Jason Fane, Jan 4, 2008 07:31

Peter Schiff is right, but understates the problem. At the same time as your apartment loses value in real terms, its price will go up in nominal (dollar) terms, so you will pay an income or capital gains tax when you sell. If your apartment is in New York City, you must pay federal, state and city taxes.

Although Schiff uses gold as his yardstick of value -- and this is the time-honored international standard of value -- an investor will better off thinking in terms of either barrels of oil or ounces of silver and will likely do better financially investing in either of these, rather than gold.

Jason Hommel has written some interesting material about this and he uses silver as his yardstick.

Because of the cost of income taxes, the investor must take on the added risk of a leveraged investment, just to maintain the value of his position. The higher the income tax, the more leverage is needed. However, with too much leverage, there is greater risk of getting wiped out by market price fluctuations.

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Other reader comments on this article

Comment	By	Date
The simplest thing is to move out to Queens, still a part of NYC. Head out on the R, V,... [MORE]	David	Jan 7, 2008 13:26
This article is spot on because of technological progress Gold can now function as a viable currency in daily transactions... [MORE]	jonahtrainer	Jan 5, 2008 00:31
Along with a declining standard of living from the falling dollar Americans can expect to pay more for all imports... [MORE]	Smitty	Jan 4, 2008 19:34
Schiff hasn't been warning us all in imminent terms as much as he has been warning us about the path... [MORE]	Douglas R. Chuhran	Jan 4, 2008 15:05
Hi Julie, I work for Elliott Wave International and we have been showing the stock market in terms of gold... [MORE]	Katrena	Jan 4, 2008 14:02
Peter Schiff is right, but understates the problem. At the same time as your apartment loses value in real terms,...	Jason Fane	Jan 4, 2008 07:31
Peter Schiff has been predicting the end of the world for years now. [MORE]	jg	Jan 3, 2008 11:32
Jg ,s comment is typical of people who cant see the facts because they cant accept the reality of what,s... [MORE]	Rob Davidson	Jan 4, 2008 13:20
You talk about the "Gold Value of Apartments Sink", well I think it is time that you should remember that... [MORE]	Mary Ann	Jan 3, 2008 09:02
Unless your after tax income grows faster than the dollar is losing value, you are likely to experience a continually... [MORE]	Jason Fane	Jan 4, 2008 07:39
First: You seem to think somebody, or some agency, should be watching out for you and watching out for other... [MORE]	Doc Tater	Jan 4, 2008 14:07
well, fair enough, doc. but ouch!i think that you're the one swinging the hammer. (you must live in nyc, yes?)but... [MORE]	teddy	Jan 4, 2008 14:29
Sorry about your situation. There is nothing worse than those who feel they must stay in a high priced area... [MORE]	Fazsha	Jan 5, 2008 14:51

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