Econ Cat Sez: Sell Ur Gold, Buy a House

O, hai again!

As you know, the Patriots lost last night, so I am now writing to you from a land of great sadness. But for the economically savvy Pats fan, silver linings abound in this loss. First, there’s the old rule of thumb that an NFC victory is good for the economy (obvs). Secondly, the bereaved tend not to be so concerned about getting the best price. And thirdmost, it teaches us a lesson on carefully evaluating a “sure thing” before betting.

Take the panicky people who like to invest in gold when the economy sags. Folks, recessions have only two possible outcomes: recovery, or downward spiral into collapse and anarchy. So as a gold buyer, down the road you’re either stuck with a big pile of metal you overpaid for, and whose value is now being outpaced by the economy in general, or you’re stuck with a big pile of metal you now have to defend from mobs of gunman roaming the street. Either way, not an attractive outcome.

But if you buy real estate in Back Bay or Beacon Hill, even the less expensive stuff, you’re making an investment that’s been outperforming the GDP for the past twenty years. And should society collapse in its entirety, you’ll have a fine slice of territory in a very walkable neighborhood, one that will be able to afford one of the better bands of mercenaries. Plus you’ll no longer have to worry about mortgage payments. It’s win/win, really.

So whether your tastes tend to the extravagant or the more reasonable, a property in one of Boston’s upscale communities is both an investment in the future of our economy, and a hedge against total societal collapse.

kthanxbye,

-Economiks Cat