In my last blog post, I told you about how President Roosevelt basically kickstarted the economy to end the great depression by confiscating gold which devalued our currency, before revaluing gold much higher.  I’ve done a little more reading on this subject and I see this as a possibility – maybe one of the more risky ideas out there, but one that has some interesting side-effects. 

The G-20 nations will get together for another big meeting after President-elect Obama’s administration takes over.  They’re not supposed to meet until April, but I won’t be at all surprised if they don’t get together a little sooner than expected because there’s a massive mess to straighten out. 

I’m thinking more and more that this might be the hidden solution to a lot of the problems we have.  If this is indeed the solution they select, there are some risks and rewards that will come into play.  First, there’s a chance that it might not work.  The longer other ideas don’t work, the better the chances that they’ll try to pull a rabbit out of their hat and try something radical.  And, don’t forget that so far nothing else is working either! 

Then again, this strategy worked once before – on a global basis – so I think that lends credibility to the idea that it could work again. 

One big risk to devaluing currency and then revaluing it by a fixed percentage is that it could cause hyperinflation if they don’t do it right.  And that could be a very bad thing, especially for people that have cash.  Which leads me to a very good side-effect of this idea.

If they revalue gold upward that will revalue other assets upward by a comparable percentage.  Therefore, things like real estate would increase with the stroke of a Presidential pen.  So if you have a real estate investment with no equity before the adjustment is made, you could instantly have equity buildup of 40% or more. 

Will they do it?  And what could that mean to you and your family’s net worth? 

The property-buying spree real estate investors everywhere are on right now would probably come to a screeching halt.  But, the property you have could potentially be worth a whole lot more than it is now.   In this situation, you could literally become an overnight millionaire.  

Disclaimer:  I’m not a lawyer and I’m not an economist.  Before you do anything I suggest you do some research of your own and see what the risks and rewards are for yourself.  Make your own judgment about what you think makes sense – or get the opinion of an expert.  The bottom line here is that by doing your own homework you get to take all the credit for what you ultimately decide. 

Big changes are coming.   I don’t know what will be decided in the end, but these are exciting times as we rock and roll with every twist and turn this adventure we call real estate investing decides to take.  Doing nothing will get you nowhere fast, but staying on top of current events and making smart decisions could easily set you on course for your own golden parachute – without having to go crawling to the government and begging for a handout. 

Happy Investing! 

Charrissa Cawley    

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