Jim Rogers Warning: Things are Going to be Horrible There is a Bubble in Everything and it is Worse Than 2008

Monday, July 15, 2019
By Paul Martin

Amber Williams
July 15, 2019

Everything and it is worse than 2008

If not for QE and the forever low interest rates ,the Dow Jones would be 15,000 at most , so the Fed Reserve can NEVER allow asset bubbles to deflate and I mean NEVER……not with all the debt in the public and private sector and the effects of technology, globalism and demographics as they are. Failure to keep the air inflated will result in a never before seen global catastrophe . Banks create money from loans and this forms 97% of our money supply. Bank loans create money and the repayment of debt to banks destroys money. This makes the money supply very dynamic and unstable.

The FED is full of MBAs , Masters of BUBBLE Administration….except they couldn’t find a bubble. The economy is dysfunctional, totally dependent on continued Fed support in the form of jawboning and interest rate cuts, suffering intensely from rapidly declining macro factors like shipping, retail,and manufacturing all heading south. The low interest rates will crater the pension funds. This will force an upward spiral in property taxes to compensate .

That bubble will be food prices as crops are being destroyed by record cold , floods ,fires and other environmental catastrophes all over the world. You can take on room mates if rent or house prices go up. You can combine trips if gas goes up. If food goes up you are limited in how much less you eat. Food prices will double then triple in the next couple of years. History says it will happen. I would gladly be wrong as it will mean mass depopulation. The Maunder Minimum killed 30 to 50 percent of the population to starvation and plague. These people were hardy individuals who could forage fish and hunt. They starved and there were only 750 million then. Imagine the abundance of wildlife fish and natural forage if only 750 million people were on the planet. Europeans resorted to killing their children and neighbors for food.

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Besides the food prices bubble , the housing bubble seems to have been reblown . There are many locales in California where prices have nearly doubled the peaks set in 2006/2007, or exceeded them even. In the real estate boom, new money pours into the economy from mortgage lending, fueling a boom in the real economy, which feeds back into the real estate boom.

The Japanese real estate boom of the 1980s was so excessive the people even commented on the “excess money”, and everyone enjoyed spending that excess money in the economy. In the real estate bust, debt repayments to banks destroy money and push the economy towards debt deflation (a shrinking money supply). Japan has been like this for thirty years as they pay back the debts from their 1980s excesses, it’s called a balance sheet recession.

The real estate booms are a global phenomenon. Australia and Canada are soon going to learn the hard way what happens in a real estate bust. The real world has been trying to tell us real estate is not a permanent store of wealth. The fictitious financial wealth in real estate disappears quicker than it is created . in the 1990s the bust happened in Scandinavia and Japan . In the 2000s it happened in Iceland , Dubai , and in 2008 in the US . in the 2010s it happened in Ireland Spain and Greece. so get ready to put Australia, Canada, Norway, Sweden and Hong Kong on the list for future busts …

Eventually demographics will take care of this. All the Boomers that could afford these homes will die off, as supply comes into the market prices will drop,or their kids will move into their homes, rents will drop. Or rates finally go up, and prices will drop. Real estate, with the exception of the few places in the USA seeing population growth, will be a bad investment for the foreseeable future , because demographics say so. What is going to give? The same thing that has been giving much more over the last 5 years and counting. It’s the Renters! Leading to the current homeless crisis that is getting worse and worse month after month year after year. Half the country will be homeless leaving landlords with a lot of empty units! besides CEOs I don’t know who is seeing their wages rise.

Corporations have been cutting in a million ways with less benefits, forcing you to contribute more to your health care, giving you worse plans requiring more out of pocket, etc… Plus life has gotten so much more expensive in the last ten years with higher real estate taxes, food prices, insurance costs all way up, education and even the avocado toast are more expensive … So Keep it up America, the race for the bottom is on!

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