Is money worth anything any more?
The price of New York real estate, despite what’s happening in the property market in the remainder of the U.S., continues to move higher and higher. The luxury end of the housing market… up, up and away. In the good old days, $1 million bought a nice house in California or Palm Beach. Today, $10 million doesn’t really get you much anymore.
How about a meal at a good restaurant? Today, a meal at a well- known restaurant for four people with one or two good bottles of wine is hard to digest at Ruth Chris or Mortons for less than $500.
The cars? Miami and New York streets are full of $100,000 automobiles, many driven by kids. (At my age, a kid is anyone in his or her 20s).
At a breakfast meeting this morning, a close associate was telling me how his friend was having a difficult time getting decent wine to fill his new wine cellar. The comment was how $100,000 can’t even buy 300 bottles of decent wine anymore.
I often wonder: Is this all a dream? The obvious fact is the wealthy continue to get wealthier and continue to spend, pushing prices higher and higher. The middle- to low-end income earners are having difficult times making ends meet. I’m thinking that, at about this time next year, all those borrowers in the subprime market will likely wish they never bought a home.
Back in the 1920s, when America was booming like it is today, at parties, guests would roll cigarettes with $100 bills and smoke them. While we are not there yet, things are certainly starting to look like the 1920s again. Can a replay of the events of 1929 be that far behind?