Low Rates & Inflation? Houses Are Perfect Hedge
Forbes Columnist David Dreman’ s most recent column is about how the Fed’s efforts to keep rates artificially low is keeping the economy weak (which in turn keeps rates low). He also points out how holding rates artificially low for so long always leads to inflation, sooner or later.
The good news in all this is what Mr. Dreman recommends as a perfect inflation hedge: owning a house.
Inflation will rear its ugly head sooner or later and housing, as a hard asset, is the perfect inflation hedge. This is a great reminder for anybody concerned about buying in a bubble now or concerned about what will happen when rates go up. Housing is simply a good investment from a hedging perspective.
This is why so many overseas investors are buying houses. Housing is a hard asset that protects investment dollars over the long run.
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