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I don't know if "cash is king" will be the case in this next economic crisis.... No one should be certain certain that the Federal Reserve Note will even make it out alive .
Cutting interest Rate is a knee jerk reaction. It is not any long term solution to fight Recession. Bank of England announced today Rate Cut from 0.75% to 0.25% but things will stay same - even worse for poor and Middle Class.
Sorry, but we are still not in a BEAR MARKET. It has been so long since we've had a real bear market, we don't even know what a Bear Market is. A BEAR MARKET has duration. Lasting a full generation. Which this may become, but is NOT after 2 weeks. A BEAR MARKET is defined by time, not by % lost.
That's what I mean by investors today being inexperienced to how painful a real BEAR MARKET is. It wipes out opportunity for a full generation. It is much more painful than a CRASH, which can be a sudden loss of 20-38%, with a recovery and new highs in 6 months.
Well certain areas are just beyond outrageously expensive and even were in 2008 to 2012 which are the areas you mentioned. Prices in those areas were far worse even in 2008-2012 than most other major metros today. Those areas are just super super expensive for some reason. The problem is most major metros now have a small bungalow costing $220K or more in a nice neighborhood when back in 2009-2012 you could get that for like $100K to $150K. That is how it is in Metro Detroit and Minneapolis and Atlanta and such.
I am not saying people should be homeless. But extending cheap and easy credit to the is not the answer. There is a such thing called renting until you can save enough for a a house. Or living in a camper and minimalist enough to save enough for a house in a major metro without drowning in debt for more than 20 years.
People are already doing that and then when they get enough for a house it is barely and they have to buy something super expensive of $220K plus for 1000 square foot bungalow when it would be much better for higher interest rates and 20% minimum down where the 1000 square foot bungalow is $100K to $140K instead.
But oh no so many greedy people feel entitled to run away appreciation in homes to price out future generations without them drowning in even more debt because of little money down super low interest rates. Just sickening!! Thats the case pretty much everywhere sadly except rural Ohio, rural Alabama, and rural West Virginia and such.
Well we can really fix this problem if people in the US embrace apartment living than living in home. But birth of middle class of post ww2 and Dad working in a factory buying home and having SUV well Mom stays home and cook and clean is alien to much of the world. And sold on this American dream.
No one is going to like this but most Asian countries would have all of California population living in Los Angeles area but no one is going like high density like those Asian countries and 40 story apartments.
And if you been to Houston or Dallas many fine Los Angeles density way too high.
And city sprawl is no answer in some of those cities has they going into the mountains. And you cannot take down those mountains to continue city sprawl.
The population cannot keep going up unless you take down home and build a apartment. People don't want higher density living and many fine Los Angeles density way too high.
We are not building new cities and people are moving to cities that are overcrowded and housing cost is going up
Well we can really fix this problem if people in the US embrace apartment living than living in home. But birth of middle class of post ww2 and Dad working in a factory buying home and having SUV well Mom stays home and cook and clean is alien to much of the world. And sold on this American dream.
No one is going to like this but most Asian countries would have all of California population living in Los Angeles area but no one is going like high density like those Asian countries and 40 story apartments.
And if you been to Houston or Dallas many fine Los Angeles density way too high.
And city sprawl is no answer in some of those cities has they going into the mountains. And you cannot take down those mountains to continue city sprawl.
The population cannot keep going up unless you take down home and build a apartment. People don't want higher density living and many fine Los Angeles density way too high.
We are not building new cities and people are moving to cities that are overcrowded and housing cost is going up
Yes the population density is way too high in LA and such. Buit home prices in LA county were onlly like $120K in 1990 when the population was 8 some million. Now with it being 10 some million, they are loik $650K plus. a 2 million population incrtease in 30 years like you said prices cannot be the same. Buit in no way does it explain prices being 6 times higher.
But anyways, yeah prices are just outrageous in those areas you mentioned and even were in 2009-2012 but today are with a multiple of 4 or 5.
Well I guess that is just the new norm that prices in those areas are super expensive compared to rest of country(LA Bosaton, Bay Area, DC, NYC, Seattle, Portland, ETC.
But that still does not explain why prices in areas like Metro Detroit, Orlando, Tampa, Miami, which were $100K to $140K back in 2009-2012 are now $220K plus for a 1000 square foot bungalow.
Point being LA, should be $390K plus like it was back then instead of $650K plus, Bay area $600K plus instead of $1.3 million plus, DC $360K plus instead of $600K plus.
And the other areas more in line with rest of country should be $100K to $140K plus instead of the outrageous $220K plus today.
And small homes in the middle of no where like rural Alabama and rural Ohio or West Virginia should be like $70K to $80K not $120K.
And all those would most likely be true if 20% down payment minimum was required and mortgage rates were 6-8% where they should be instead of even lower rates than 2009-2010 and 3% down stuff available.
Outrageously high housing prices are very locale dependent, not because of general inflation, which has been tamed for a long time now. And that is a very issue for those not having the wealth to cope, yet still having to live and work there. The solution is for those people to move elsewhere. That is a major lifestyle choice, and one that every middle class worker under that sort of stress needs to consider.
Then there is lifestyle and standard of living. Certainly better in general for our poor. And of course we rich have done famously with all this monetary policy.
The crux is that middle class wages have not kept up the last few decades. And letting the economy go to total hell without governmental and Fed assistance post 2008 crash is just nonsense. Many more of the middle class would have been beaten down.
IMO the cure is money policy directed toward the working middle class. IMO we will see some of this coming soon for Coronavirus relief. Which will lead to...
IMO the best, simplest, quickest and easiest way to augment our broad middle class is through HC reforms, and whatever means it takes to reduce their OOP financial stress.
The "coastal elite" cities are for maybe the top 20% of wage earners, probably more like the top 10%. If you're really low income, you're locked in by the blue state benefits. If you're at the top, you earn plenty enough to afford the housing. The squeeze in the middle would be better served by bailing out to areas with cheaper housing.
Let's hope this criminal activity since 2001 of simulating or faking economic growth with money stolen from our kids and grandkids is over. The cries and howls you hear this past few weeks are from debtors. Savers smiled. It’s time for savers to stand up for themselves. It’s time for a little pain to be felt by those who have inflicted it without end for so long. Deflation is hard but at this point its much needed for SAVERS.
Deflation is the transfer of wealth back from debtors to savers through the increase in purchasing power of your money and the liquidation of over-priced assets by desperate debtors trying to remain solvent.
Look at the gas prices now???? Lower gas prices are making it far easier for real people to get to work, buy food, pay off debt and build a life for themselves. Same is true for lower housing cost, lower healthcare cost and lower education cost. Its time to end this inflation madness created by those "Legit Economists or LUNATICS at the FED. It's time to end SOCIALISM FOR THE RICH ONLY and perversion of Capitalism.
Monetary Policy since 2001 was CRIMINAL!!!
Good Luck!!!
Again, you are ignoring the data - the economy contracted in 2008 & 9 and actually got your precious deflation for the first time since 1930's. You continue to confuse deflation with recession.
I graduated from the University of Mother Nature and I only follow the LAW OF NATURE. Mother Nature teach us that Inflation (Growth) lasts for certain number of years. It is succeeded by certain number of years (a generation) of DEFLATION. This is a necessary sequence, like Day and Night. We can't FIX IT. We have to endure it.
I suppose they don't teach you this at those worthless business schools? Most so called Legit Economists believe in "the Business Cycle" but most have no idea what the Business Cycle is and how long it lasts. They think it is variable, depending upon the details of economic expansion. What if the Business Cycle is fixed?????? This idea that it is fixed eludes them since we have all come to think that fixed cycles....suggests God, which it does - at least suggests an intelligence much larger than the current human intelligence.
Good Luck!!!
So you have no idea what you are talking about - deflation is very rare and has only really had a significant impact 4 times in US history, last time in the 30s.
Your idea of a legitimate economist is only one that agrees with you and you have no idea what you are talking about - in other words an economist that will never exist.
Who holds all of this debt? What is one person's expense is another's income.
The debt is good until the company goes bankrupt. Then the debt just vanishes. If you are holding corporate bonds, they can become worthless overnight. In 2008 it happened to Chrysler and WaMu bondholders, and lenders to a lot of other companies that went down the tube.
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