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This is a wonderful house centrally located in Fira with caldera view.  It is 280m2 in size and is actually comprised of two homes, one on top of the other.   The home has a courtyard, area for roof garden.   Bedrooms and livingrooms with high 5m cielings, and lofts in both houses.   The home needs repairs but is structurally sound.

Price 670.000 euros firm, Reduced from 800.000

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The Milano Real Estate Scam

You are most likely aware of the Nigerian email scams where you get an email from some supposed financial minister or dictator who wants to get your bank account information so they can deposit some 20M that they have obtained from some oil transaction or military coup, where they trick you into giving them money or giving up your account information to process some illegal activity in exchange for a cut of the money.  Well there is a new scam out of italy and me and 3 close friends have had our doors knocked.

The new scam involves real estate and what happens is that someone calling from Milan wants to buy your property and will pay your asking amount (no matter how high it is) but there is a hitch.   You have to fly to Milan and meet with them.   Here they offer to buy your property but you have to swap 500 euro bills with that of smaller denominations before they buy your property.    In one case they said that the money comes from diamond sales.    My one colleague who did go to Milan said these people were Israeli and that mentioned a diamond money link.        The man I spoke to on the phone did not have an Italian accent but it could have been Israeli, Lebanese, Syrian or some other nearby mid east accent.   That doesn’t really matter.

We are not sure if the 500 Euro bills are counterfeit, even though they let you pass them through a bank counter, or if this is just simple money laundering.    There is no way of knowing for sure unless you proceed with the scam, and who knows if they even buy your property after you’ve done the exchange with them.

Post comments if you have had any such experiences

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…just look at this chart

www.santorinirealestate.com  www.santoriniselection.com

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Regarding my article which I linked to in my last post (http://www.rieas.gr/images/NICKDINOS.pdf), I just want to clarify something.    As many of you may have gathered, I am a gold bug.  I am not a gold bug in the sense that I will hold gold forever, but I think that now is the time for gold.   Global currency debasement has brought us into an Economic winter which still has a long time to run its course.   We will get out of it but not for a while and not, perhaps, without a war or without a change in global monetary policy meaning a move to some sort of sound money.

Gold has been sound money for the last 6000 years and it is reasserting itself today.  You can see this in the price of gold valued in all currencies.   The rise has been phenomenal and we are not even close to where this game will finish.   You must realize that the Greek Empire based on gold money lasted 1000 years.   Please note that I am not talking about the classical greek empire but the Byzantine Empire.   This was the Greek empire which historians try to rub out.   (thank you Christos my dear friend for this insight). Sound money gave this empire a millenium of life, rather than fizzing out like the Roman Empire did due to debasement of its coins from silver to base metals.   Our western empire is meeting this same fate.   Sound money is all you need for a stable economy because people can save the fruit of their labor and have an incentive to work.

I had client come to my office to discuss the purchase of some real estate and the topic came around to the value of assets priced in gold.    We all know the effects of the recent hyperinflation in Zimbabwe but few non-Greeks know that we had a similar event here in Greece about 60 years ago.   My father in-law told me how he remembers families selling all their household furniture for a piece of bread.   My client told me something much more interesting.    He told me that some family friends of his purchased the entire block of downtown Athens which houses the ministry of the economy for three British Sovereigns during this hyperinflation period.    If you are not aware of the block of land, it is located close to Syntagma Square in Athens and is uber prime.  If I were to value this property today, I could conservatively put it at around 40M euros.   Let’s see now, one British sovereign sells now for about 220 euros and consists of 7.322 grams of gold (http://en.wikipedia.org/wiki/Sovereign_(British_coin))    So these friends of his paid 660 euros of today’s money for a 40M piece of land. 

Now either land today is overpriced or gold is cheap (or both).   Sure, easy credit raised the prices of real estate, and sure the recent CFTC hearings show gold is being manipulated to the downside but can these differences cause such a huge gap in property prices priced in gold?   Let’s say that the manipulation is to the point of 100:1 as the CFTC hearings revealed.    This means that the gold price in euros now would be about 82500 euros per ounce.   If 3 british sovereigns contain less than 3/4 of an ounce of gold, these buyers still got a great deal in paying only about 60000 euros for a 40M piece of land.    Now for the other end.  What if my conservative estimate for the land is wrong and we drop it by 60%.  This block of land would be priced at 16M euros….still a great deal for the buyers.   

Let’s see what the price of gold would be for that property if it were priced at and even more conservative 10M euros.  We said that 3 British sovereigns contain a bit less than 3/4 and ounce of gold.    This means that this property, in today’s prices, was bought at a gold price of about 14M per ounce!

What’s going on here?   Even with an inflated gold price, which takes into consideration central bank manipulation of the metal, and a reduction in the property price to an insulting current property value, we can not attain the deal which was made in that transaction.  The property was exchanged for gold at around 14M euros per ounce!    What happened to the theory that an ounce of gold would consistently buy a nice gentleman’s suit?   Not even Michael Jackson had such a suit!  What I’m trying to show in my “Buy one get 4 free article” is that in times of financial distress things fall out of balance, out of whack, and there is an opportunity in the pain and strife to make huge gains.  

The economic winter will be bad for certain assets and good for others but I think FOFOA said it best that there will be a time coming soon where there will be inflation in everything priced in dollars (currency) and deflation in everything priced in gold.  Gold will go up, real estate will go down, however my point in the article is that there will be an opportune time to make disgustingly insane trades when there is blood on the streets.

Cheers

n

www.santoriniselection.com  www.santorinirealestate.com

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