Imploding Lenders
- Thread starter Arnie
- Start date
Credit is contracting..........................................................................................................................................................................................!!! time to watch out.
the housing bubble theory is just not true
its not a housing bubble -
its massive liquidity being injected into the markets by all central banks
the current housing market is the result of inflation....
thats why over the next 10 years the housing market will go WAY higher.
people are going to hold assets that have some use against inflation.... and houses are exactly that (not specifically the houses themselves, but the land underneath).
sure there will be hiccups like forclosures and subprime lenders being caught out...
its not a housing bubble -
its massive liquidity being injected into the markets by all central banks
the current housing market is the result of inflation....
thats why over the next 10 years the housing market will go WAY higher.
people are going to hold assets that have some use against inflation.... and houses are exactly that (not specifically the houses themselves, but the land underneath).
sure there will be hiccups like forclosures and subprime lenders being caught out...
Just wait until people stop paying their credit card bills and blow off their credit ratings.
It should be clear to all by now that central banks were the catalyst behind the property bubble, but central banks cannot force people to borrow, nor is it in the interest of a central bank to buy property directly. Accordingly, I do not expect property to go 'way higher' over the next 10 years as you do. The implosion of subprime lenders is just another sign of the current credit expansion having reached its outer limits.
Mises put it beautifully:
"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."
- Ludwig von Mises
I think central banks will step in to provide support for asseet markets, but there is no gurantee that new liquidity will flow to the housing sector. It didnt go into tech after the bubble.