Debt Bomb

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Submitted by sjk on April 19, 2017 - 1:46pm

Blast from the past ! I admit it's had a rather long fuse but it seems more timely than ever.

This is R rated....

Submitted by ucodegen on April 19, 2017 - 2:01pm.

Well Done! Though the melody is from Tom Jones, the females in the background keep reminding me of Palmer's "Addicted to Love"..

Submitted by phaster on April 23, 2017 - 8:50am.

curious anyone else develop/implement an "investment strategy" just in case...

Submitted by FlyerInHi on April 24, 2017 - 12:45pm.

That was a fun video.

But debt is simply savings to people who are lending their money. so we're just putting our financial resources to use to maximize productive capacity.

Why keep physical capacity idle for lack of money (something that is unlimited and man made)?

Submitted by sjk on April 25, 2017 - 2:53pm.

Here's a beautiful example of a bubble... We Will enter into a period of deflation or alternatively $1 million will have the purchasing power of 10,000 dollars at some point in the future.

There's been massive inflation in recent years in asset prices not due to fundamentals ( organic )but due to credit expansion of historic proportions ,this always ends badly... The federal reserve tells us there's hardly any inflation. This is ridiculous for the past 25 years they've engineered the reports not to report inflation what do they expect?

The video is entertaining but it makes a very serious point. It is my believe that we're headed for a period of deflation in due course....


Submitted by FlyerInHi on April 25, 2017 - 5:17pm.

Have you considered that there's a lot of worldwide savings looking for a place to park?

The major metros of the world are interlinked by globalization. Capital knows no borders and the USA attracts investments because we don't place citizenship restrictions on ownership.

Submitted by spdrun on April 25, 2017 - 7:44pm.

That's been true for decades, didn't stop the 2001 and 2008 entertainments from happening.

Submitted by gzz on April 25, 2017 - 8:00pm.

Spdrun, China's economy has grown 60%+ since the bubble pop. They are just as keen on buying in CA as before, but their resources are much higher.

By the way price to annual rent in major Chinese cities is about 50. Our markets have both higher returns and greater safety and protection from seizures. While rent is rising faster in China, that has a very long way to go. A 400k San Diego condo rents for about 2200/mo, but in Shanghai you'd get about $800/mo in rent on a 400k condo. Why do people still buy? Banks are unsafe and pay almost no interest, well below inflation. Also it is a requirement to get married in the middle class.

Submitted by spdrun on April 26, 2017 - 5:50am.

So, basically, they're in a property bubble that rivals 2008 in the US. If it pops, it would be extremely fun to watch.

Submitted by FlyerInHi on April 26, 2017 - 10:36am.

gzz, i don't think you can get a condo at $800/mo in shanghai. But I agree with the general theme of your post.

There's a lot of new middle and upper wealth in the world now. Even immigrant laborers from Guatemala can sell a property back home and have $50k downpayment. Decades ago that was not the case. London didn't become ultra expensive until the East Europeans came. Back in the 80s the East Europeans had no money to buy houses abroad.

One property i sold is to a guy in the Middle East. He never even came to look. He agent handled everything.

Submitted by spdrun on April 26, 2017 - 11:06am.

That's the one useful thing about Trump's policies. Uncertainty about being allowed into the US (or even about being able to pull money out) may reduce foreign investment in hot markets.

You're less likely to invest $50k if there's a risk of it being confiscated. Or, assuming a home bought as a residence for kids or whatever -- if you won't be able to use it due to visa restrictions or risk of deportations.

Submitted by FlyerInHi on April 26, 2017 - 11:19am.

The hot markets around the globe are interconnected by globalization. If people can't buy in San Diego, they'll buy in Panama City.

One is my friends is an immigrant from Panama City. She came here as a child in the 80s, got married and her kids are almost off to college. She went back for a vacation and said "wow, this poor country of mine... it's so sophisticated now with highrises everywhere."

The problem with creative, hot cities around the world is that we don't have a political entity that links us and allows us to prosper together. We share the same cosmopolitan ideas of openness and global mobility. Too bad we have the urban/rural divide and the politics of division and resentment. I don't see how you can support that, spdrun

Submitted by spdrun on April 26, 2017 - 11:30am.

Um, I don't support closed societies. I do support taking advantage of chaos and mayhem caused by dumbasses in power. What else is a clown like Trump good for?

The ideal would be if his policies cause a recession in the next 2-3 years that can be exploited, AND which won't allow him to so much as be elected county dog-catcher in 2020.

Submitted by FlyerInHi on April 26, 2017 - 1:45pm.

Makes sense spd. Might as well make lemonade out of lemons.

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