Mohacsy's Safe Portfolio Member Forum

[jbsliverer]

I think you're kind of looking at some pieces to a puzzle and not looking at the whole picture. A lot of time would be spent on all the pieces, way too much for a post. I like to summarize looking at the whole picture and of course the bottom line.

I was meaning government in general, federal, state, county, city, all included. They are all connected and feds lending rate has a lot of connection to money lent out to the public. Higher property values = increased money flow and money lent out = increased gov income. The direct and a lot of indirect lists are long. I've had property in many states, still have a few, including California. Every local I've dealt with pays the bills with a big percentage coming from property owners. I'd say more than 20% sometimes out of all the other taxes taken in to pay those bills for that area and beyond. It can be listed in fees, bonds, etc., but all that is just a little itemization, doesn't change the amount of the check we have to write out to the system. My point was more that the country's bill payments are coming from a big percentage property owners.

I'm not sure where property market value doesn't have effect on the appraised value that we get taxed on and pay or the income tax paid when rented or sold, but I do know I've spent the time and money to fight the amount of assessment attached a few times, and even appealing to the state to finally get the amount I write the check out for reduced.

Call me a conspiracy theorist, but the fact that the value of our property is such a big part of our assets and a big part of the money flow of our economy and capitalistic society as a whole, that the Fed gov is not taking that into account and developing processes (some unknown to the general public) that manipulate the big picture, the least of which manipulating how they list the data and use the numbers or having connection to the RE value or market.

The point of the article was that they are again reaching that brick wall or top of the bell and going over the other side of the bell curve. This bell curve has the amount of gov income directly or indirectly connected to that big part of money flow involved with property values on the y axis and the value of that property on the x axis. Two points on the bell graph are known. First point, the curve goes from 0x0y where gov doesn't get any income if that big part of money flow is worthless (no flow). Gov income goes up the more the value of property increases on the x axis and the amount we pay out to where it reaches some point Rmax and then goes back down to zero income for the gov for the second point. Where x or property values go so high that nobody can or will pay and we have total system breakdown and anarchy (again not a good money flow or income to the gov). So all the attention is put at staying at the top of the bell.

Given that the rate charged can vary or different itemizations can occur but gov tries to maintain that overall flow constant.

Example bell curve.



Remember that higher property values equal higher rents and higher property payments and can change the money flow with risks of creating less gov income. Also remember that our elected government part depends on a big portion of that money flow in the political field.

For sure the "system" is willing to take some collateral damage, a certain amount of bankruptcies, increasing homelessness, more renters instead of home ownership, etc., which is another point the article makes. The ever growing wealth and economic gap and who his going to take and are taking the brunt of the damage caused by too high of price for having a roof over ones head. Too much of that, and systems break to far.