• 208 days Could Crypto Overtake Traditional Investment?
  • 213 days Americans Still Quitting Jobs At Record Pace
  • 215 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 218 days Is The Dollar Too Strong?
  • 218 days Big Tech Disappoints Investors on Earnings Calls
  • 219 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 221 days China Is Quietly Trying To Distance Itself From Russia
  • 221 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 225 days Crypto Investors Won Big In 2021
  • 225 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 226 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 228 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 229 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 232 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 233 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 233 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 235 days Are NFTs About To Take Over Gaming?
  • 236 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 239 days What’s Causing Inflation In The United States?
  • 240 days Intel Joins Russian Exodus as Chip Shortage Digs In
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Texas Hedge Report

Texas Hedge Report

Texas Hedge Report

Todd Stein & Steven McIntyre are internationally known analysts and editors of The Texas Hedge Report, a market newsletter that highlights under and overvalued securities…

Contact Author

  1. Home
  2. Markets
  3. Other

It Certainly Feels Like 1929

When you think of a bubble in the 1920s, what comes to your mind? We are willing to bet that it isn't the Florida real estate craze of 1925. That's right, in the early 1920s, land prices in Florida began to rise as tourism was thriving and celebrities from around the world were spotted partying in and around Miami. Add to that exponential population growth and the superficial, money-centered culture of the time, and housing prices in this new playground of the wealthy and famous were guaranteed to grow exponentially.

By 1924, the Miami Herald was rumored to be the nation's heaviest newspaper in terms of weight because of the colossal amount of real estate classified ads in its pages. Easy credit was abundant and it seemed like 99% of the public was either a real estate investor or broker. Stories of property prices rising 500% in less than a year reached the rest of the country and soon capital poured in at an even faster pace. The music finally stopped during the summer of 1925 and prices started to decline by Christmas. The pace of selling increased and, just when it couldn't get any worse, a hurricane wreaked its havoc the following year. Game over.

Between 1926 and 1929, the Florida real estate market barely recovered. Economic historians will tell you that the only reason why Florida real estate saw any relief at all in the late 1920s was because of the wave of nation-wide prosperity from a dramatically rising stock market. But as you all know, the stock market stopped rising and crashed in October of 1929. Stocks collapsed and took everything down with them including real estate.

Today, we see many parallels to the 1920s, except this time the stock bubble came first. We suspect that when history books are written about the first ten years of the millennium, it will be a (credit crunch-induced) real estate collapse that is most memorable, rather than the NASDAQ collapse of 2001. Perhaps 2005 will be the year that real estate takes everything down with it, similar to how 1929 saw stocks take everything down with them. The parallels are obvious. How many people do you know who are real estate agents, mortgage brokers, appraisers, builders, developers, etc? Can you recall the last time you were at a restaurant or cocktail party and the conversation didn't swing to real estate?

What we see coming is classic deflation folks, where cash is king and all other assets will suffer. Hold on a second - are we suggesting you dump all of your money in some junky money market with an anemic yield? Of course not! If you have been reading our newsletter for anytime at all, you will realize that there are other cash alternatives to the US Dollar. Our two favorites are gold and silver as they are the world's oldest forms of money – dating all the way back to biblical times.

Back to homepage

Leave a comment

Leave a comment