People are wanting to steer clear of real estate right now. The prices have dropped precipitously in many areas. The banks are offering very low interest rates to lure new buyers into housing (4.25% mortgage rate to 4.50% down here in the south for those who have good credit ratings). Many are saying, don't buy now, the economy is going to get worse, and the prices of homes will get much cheaper! Guess what - that would be true under normal financial/economic circumstances, but not when the U.S. government is intervening.

I lost $14,000 in a couple of months for shorting house builders. I had previously done it and doubled my money in 3 days. But whenever government can insert itself into the economy by making new policy, and forcing bankers to go along with it - then much more uncertainty comes into the market. All of a sudden, the rules are changed! You no longer need a 20% down payment, or even a 10% down payment. Now, according to new regulations that surprised the (you know what) out of investors, you don't have to pay anything down. That's when irresponsible and unproductive people started moving into nice houses. They knew they couldn't continue making the payments, especially after the "balloon loan" interest rates kicked in, but that was OK - because they got to enjoy living the "high life" for awhile, before they defaulted and went back to having bad or no credit at all. Meanwhile, house sales went through the roof and I lost my $14,000 due to government intervention (changing the basic common-sense rules of who you loan to, and who you refuse to loan to). Never underestimate government's ability to totally change the way life operates!

OK - back to the subject. Why buy a house now? Two reasons: (1) Interest rates are low; and (2) the U.S. and other governments are inflating the currency at such a rapid rate, that the dollar in your pocket will be worth less than 50 cents a year from now. They are printing out new money at the rate of a snowblower in a Miami skiing park - and that's fast! None of any country's fiat currency is backed by anything. It is paper, and the only reason we use it (so far) is because we've used it in the past. But Zimbabwe is a most recent example of what happens when you print lots of fiat 'money' to try and solve your government debt and your financial problems. It turns out that (as of last month - I'm sure it is worse now) Zimbabwe was printing out $50,000,000 bills, and one of those was worth U.S. 2 cents.

This means that when people want to buy a house next year in April, it will cost them at least twice as much (according to the present rate at which the Federal Reserve is printing fiat currency, and based on the "bailout plans" that are in the trillions of dollars - for which the presses are running overtime to try and print all the new "money" required). So, buy a piano, a pistol, a flat screen TV, a couple of goats, a chunk of chromium, copper, nickel, platinum or palladium -- they will be a great investment, because next year at this time, they'll be worth at least twice as much.

For those of you old hands that know the reality of economics and have seen booms and busts and been investing in resource stocks, this is Investing 101 for you. For those of you who are younger and have not witnessed rampant inflation of the money supply, and what it means to rocketing prices of anything tangible (land, food, real estate, metals, etc.) this is reality I am talking about - not fairy tales.

But the advantage that Noront or Freewest or any other explorer who is "developing" a resource, by continuing to drill and prove up additional resources through drill core assays, is that, not only do they get to "profit" from inflation of nations' fiat currencies - but on top of that their assets in the ground gain additional value as they expand.

So, while my counsel to my sister would be to buy Noront shares (and hold off on that car or new house for the time being) I can understand some peoples' urge to acquire a home of car that gives them some tangible feeling of accomplishment. But, for the wiser of your folk, if you wait on that purchase, and double or quadruple or quintupple your investment, then you've paid for the car or house and have lots of extra money left over!