Can real estate in the United States be a hedge asset? Experts: The safest option is to detach from the monetary system.

Former Coinbase CTO Balaji recently published a long article titled “The True Value of American Real Estate,” arguing that it is not safe in the face of a debt crisis and fiat collapse, and cannot serve as an effective store of value. Particularly, the current economic structural issues in the United States make it closer to Russia in the 1990s, with both national and social functions heading towards collapse.

From US debt to currency crisis, what is the best store of value to hold?

Molson Hart, the founder of Viahart, posed a question on X: “What is the safest thing to hold when the currency system fails?” The options include gold, Bitcoin, land, foreign currency, and firearms.

Changes in the United States National Debt Annually

Balaji believes that when choosing a hedge asset, the focus should be on “what can escape the death flood of fiat devaluation?” He will focus on the question of “whether real estate is safe.” This article is also applicable to the G7 industrial nations currently in a sovereign debt crisis (.

)Is the US economy caught in a storm? Balaji analyzes deindustrialization, the collapse of dollar hegemony, and domestic tearing crisis(

Gold, firearms, and land? Balaji: Traditional safe-haven assets may not be safe in modern times.

In past apocalyptic imaginations, gold, firearms, and land have often been regarded as the three assets for value preservation. However, Balaji has made a counterargument:

Gold: Difficulties in cross-border movement, and it can be intercepted by the government at airport metal detectors.

Guns: They are only valuable in a “Mad Max” scenario where the government has truly collapsed; otherwise, they have limited usefulness.

Land or real estate: In a governance-deficient country, it may be the most dangerous asset.

According to Balaji, once the functions of the state and society deteriorate, real estate will become the first high-risk target exposed to laws, public safety, taxation, and politics.

Why has American real estate lost its value? Decline from California to New York.

Balaji explained that the various phenomena from California to New York are eroding the actual value of real estate, including the widespread presence of illegal immigrants and homeless individuals in urban alleys, anti-building regulations, laws that make it difficult to evict squatters, and extremely high taxes with very poor government efficiency.

He cited the upscale neighborhood of Pacific Palisades in Los Angeles as an example: real estate worth billions of dollars was completely destroyed by wildfires due to government ineptitude, highlighting the gap between the “nominal value and actual security” of real estate.

Considering the current rulers of New York City, do you really have optimism for real estate in New York, Los Angeles, Boston, or Chicago under such a governance environment?

The US housing market has long been on a decline: the “false prosperity” of nominal increases but actual depreciation.

Balaji also pointed out several reasons why the U.S. real estate market is facing a decline. First, the Case-Shiller index shows that the U.S. housing market is in an unprecedented nominal value bubble, far exceeding that of the 2008 financial crisis.

At the same time, U.S. housing prices have been falling relative to tech stocks and crypto assets for a long time. The nominal price of homes has been pushed up by inflation, but their “real purchasing power” has actually decreased.

) Inflation creates a false illusion of prosperity in the stock market: The US stock market, priced in gold, has stagnated since the dot-com bubble (.

In addition, the three major political forces are all pushing for a decline in housing prices, from increasing housing supply, reducing immigration to lower demand, to relaxing building regulations to reduce costs. The reasons may differ, but the direction is consistent, all of which will lead to a decrease in the value of housing.

Will the United States head towards the fate of Russia in the 1990s? Can it break free from the “dollar system” as the key?

Balaji believes that while the baby boomer generation now sees rising housing prices in “nominal figures”, the “real purchasing power” is shrinking, and thus real estate is no longer a safe haven against inflation and currency collapse.

He emphasized that as the United States moves towards deindustrialization, dedollarization, and a mountain of debt, it will ultimately resemble Russia in the 1990s: soaring housing and commodity prices, currency depreciation, and a loss of order.

In summary, what he wants to express is that people are too reliant on safe-haven assets within traditional frameworks, without realizing the systemic risks brought by the collapse of fiat. Only assets that can cross borders, be carried, and detach from the U.S. currency and legal system are true safe havens.

There is very little real security within the system; security comes from breaking away from this system, from this collapsing system.

) The exit of the dollar hegemony is a necessary part of the transformation of the American financial system: how should investors respond to the “post-dollar era”? (

Can U.S. real estate be a hedging asset? Experts: The safest way to detach from the fiat system. First appeared in Chain News ABMedia.