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HOT TOPIC Is a market crash coming? Or massive hyper-inflation?

Timmy C

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Yeah no, since most of them are not investors, the real reason real estate is going up is from a couple of factors that all spell disaster:
1. Cheap debt. Unsophisticated homebuyers see low interest rates and get in bidding wars for houses that aren't worth what they are paying for them.
2. Stimulus checks, PPP loans, big spending, and other forms of inflation: all of that money finds a home somewhere, and when it's done trading hands, it finds the home in assets (real estate, stocks, bonds, commodities, etc)

Both are bad for the economy. At least, for average people who will probably all get burned hard - and for businesspeople later, when we get blamed for it all even though it was mostly government policy.
Property won't crash in Australia.

People have said this for 10 plus years.

Governments have basically made it illegal for property to crash.

They will do anything and everything to prevent that from happening.
 

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thechosen1

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Property won't crash in Australia.

People have said this for 10 plus years.

Governments have basically made it illegal for property to crash.

They will do anything and everything to prevent that from happening.
That's also a problem.

The US Federal Reserve already has massive power over the US (and thus, the world) economy. Recently they have started buying corporate debt (buying bonds).

That means in a worst case scenario, they would be the creditor for those companies...

Governments are manipulating economies in new and bizarre ways, and where it leads is yet to be seen because it hasn't happened yet...

Here is the (heavily PC and spun up / biased) summary: The Fed starts buying corporate bonds

Good article on what happens to bondholders when a company goes under: What Happens to Bondholders When a Company Goes Bankrupt?

Think about it. Connect the dots. I don't like what I see.

edit: also, "people have said this for 10 plus years" - uh yeah, 2008 was only 13 years ago
 
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Timmy C

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That's also a problem.

The US Federal Reserve already has massive power over the US (and thus, the world) economy. Recently they have started buying corporate debt (buying bonds).

That means in a worst case scenario, they would be the creditor for those companies...

Governments are manipulating economies in new and bizarre ways, and where it leads is yet to be seen because it hasn't happened yet...

Here is the (heavily PC and spun up / biased) summary: The Fed starts buying corporate bonds

Good article on what happens to bondholders when a company goes under: What Happens to Bondholders When a Company Goes Bankrupt?

Think about it. Connect the dots. I don't like what I see.

edit: also, "people have said this for 10 plus years" - uh yeah, 2008 was only 13 years ago

2008 financial crisis didn't really effect Australia at all.

We where unscathed and nothing changed so I cant relate.

For my lifetime of 30 years I've only seen property go up and up.
 

Envision

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Yeah no, since most of them are not investors, the real reason real estate is going up is from a couple of factors that all spell disaster:
1. Cheap debt. Unsophisticated homebuyers see low interest rates and get in bidding wars for houses that aren't worth what they are paying for them.
2. Stimulus checks, PPP loans, big spending, and other forms of inflation: all of that money finds a home somewhere, and when it's done trading hands, it finds the home in assets (real estate, stocks, bonds, commodities, etc)

Both are bad for the economy. At least, for average people who will probably all get burned hard - and for businesspeople later, when we get blamed for it all even though it was mostly government policy.

I agree sure, these are factors but you also need to look at how ruined the global supply chain is and that the costs of goods to make a house have skyrocketed. We actually have a massive housing shortage here in the US, there is not an abundance of people buying 6 houses like there was 12 years ago... What's happening is a mixture of low interest rates, no underlying product, and a massive increase in cost to produce which bottlenecks an industry and skyrockets cost.

Real estate, Id say is one decent place to put your money. The only factor I see genuinely being terminal to interest rates is if the cap gains/1031/tax laws are actually passed.. Which I dont think they will simply because most of these politicians own real estate investments. Or if interest rates start to go up, but that would tank the economy and the fed/govt is too scared to do that for the time being.

Taking on debt and owning real estate is honestly one of the best hedges against this crazy inflation we're seeing.
 

socaldude

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Inflation numbers come out tomorrow and they are gonna look great. LOL

Spot on with the target rate. LOL

:cool:
 

Timmy C

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Inflation numbers come out tomorrow and they are gonna look great. LOL

Spot on with the target rate. LOL

:cool:
Of course, they are!!
Haven't you heard?
Inflation is only 0.0000013 %
See, CPI is right on track.

''Everything you need for your day-to-day life is not included in the CPI, and these basket of items have not gone up, therefore.

THERE IS NO INFLATION''

- Central Bank.
 

thechosen1

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I agree sure, these are factors but you also need to look at how ruined the global supply chain is and that the costs of goods to make a house have skyrocketed. We actually have a massive housing shortage here in the US, there is not an abundance of people buying 6 houses like there was 12 years ago... What's happening is a mixture of low interest rates, no underlying product, and a massive increase in cost to produce which bottlenecks an industry and skyrockets cost.

Real estate, Id say is one decent place to put your money. The only factor I see genuinely being terminal to interest rates is if the cap gains/1031/tax laws are actually passed.. Which I dont think they will simply because most of these politicians own real estate investments. Or if interest rates start to go up, but that would tank the economy and the fed/govt is too scared to do that for the time being.

Taking on debt and owning real estate is honestly one of the best hedges against this crazy inflation we're seeing.
Great to see you chime in. Yes, I agree, with caution.

I do think that where interest rates are now, they can and will only go up. So that will be a rough ride when it finally happens...
 

monfii

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Inflation was 4.2% in April, according to CNBC.

From here on, we have three options.

Option A: Nothing changes, they let the deficit, the money printer, and inflation run ----> this will slow the economy, and prices will come back down. The stock market bubble will explode due to grim economic outlook.

Option B: They rise interest rates and stop giving free money----> this will slow the economy, and prices will come back down. The stock market bubble will explode due to grim economic outlook.

Option C: A coup happens, the president is now a comrade, and prices are dictated by the state. The stock market is abolished before it crashes.

Consequence: sell your overvalued stocks and shitty altcoins.

What to invest in now?

- Real estate is overpriced
- Stocks are overpriced
- Who is still buying gold (besides Peter Shiff)?
- Crypto will tank due to margin calls, although it remains one of the safest investment right now (BTC and ETH)
- Bond's value will be crushed when they raise rates

IMO alternative assets look great: fancy cars, art, champagne. Maybe a small-town supermarket is the best investment right now.
 

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