Most Splendid Housing Bubbles in Canada: Mad Scramble to Lock in Mortgage Rates as Bank of Canada Is Set to Tighten | Wolf Street

https://wolfstreet.com/2022/01/19/most-splendid-housing-bubbles-in-canada-december-update-mad-scramble-to-lock-in-low-mortgage-rates-as-bank-of-canada-is-set-to-tighten/
QE ended months ago and interest rates are rising. Home prices fell in three markets, but spiked in others...

The Federal Reserve’s Assault on Savers Continues | Mises Wire | MCViewPoint

https://mcviewpoint.com/2021/11/03/the-federal-reserves-assault-on-savers-continues-mises-wire/

If the federal government does not protect the American people from the Fed’s reckless monetary policies, which have caused prices to accelerate and have blown up another financial bubble, then the public “could go on strike” and withdraw their money until banks pay us a market rate of interest.

https://mises.org/wire/federal-reserves-assault-savers-continues

Murray Sabrin

The front-page headline in the Wall Street Journal on October 14 says it all, “Inflation Is Back at Highest in over a Decade.” The Labor Department reported that the Consumer Price Index (CPI) increased 5.4 percent from a year ago. This should not have been a surprise to Federal Reserve chairman Jerome Powell and his fellow board members nor to its hundreds of PhD economists who drill into the economic data to forecast the economy…

STUNNER: Joe Manchin Says He Will NOT Support Biden’s Multi-Trillion Dollar Spending Plan As It Stands Today – Nwo Report

https://nworeport.me/2021/11/01/stunner-joe-manchin-says-he-will-not-support-bidens-multi-trillion-dollar-spending-plan-as-it-stands-today/

Source: Clayton Keirns

On Monday, West Virginia Senator Joe Manchin stunned Democrats by announcing that he will not support the new multi-trillion dollar spending bill unless more clarity is given. Manchin wants to know the lasting effects that the bill will have on the nations debt, which other Democrats simply don’t care about.

“I for one won’t support a multi-trillion dollars bill without greater clarity, about why Congress chooses to ignore the serious effects of inflation and debt that have on our economy and existing government programs,” Manchin said at a press conference.

“For example, how can I in good conscience vote for a bill that proposes massive expansion to social programs when vital programs like Social Security and Medicare face insolvency and benefits could start being reduced as soon as 2026 and Medicare in 2033, and Social Security. How does that make sense? I don’t think it does. Meanwhile, elected leaders continue to ignore exploding inflation, that our national debt continues to grow and interest payments on debt will start to rapidly increase when the Fed has to start raising interest rates to try to slow down this runaway inflation,” he added.

Watch below:

https://embed.air.tv/v1/iframe/yP8DeKdAT9-1k075-GJdqg?organization=vbNx0Au4Ti2T9BJXkzclTQ

“With the factors in mind, and all of these factors that we’ve spoken about, I’ve worked in good faith for months with all of my colleagues to find a middle ground on a fiscally — and I repeat that — a fiscally responsible piece of legislation that fixes the flaws of the 2017 Trump tax bill, that I thought was weighted far, far too far for the high end earners,” he continued.

“And the needs of American families and children. However, as more of the real details outlining the basic framework are released, what I see are shell games, budget gimmicks that make the real cost of the so-called $1.75 trillion bill estimated to be almost twice that amount if the full time is run out, if you extended it permanently, and that we haven’t even spoken about. This is a recipe for economic crisis. None of us should ever misrepresent to the American people what the real cost of legislation is. While I’ve worked hard to find a path to compromise, it’s obvious compromise is not good enough for a lot of my colleagues in Congress. It is all or nothing, and their position doesn’t seem to change unless we agree to everything. Enough is enough,” Manchin concluded.

REPORT on What is Propelling Australia’s House Prices | COMMUNITY ACTION ALLIANCE FOR NSW (CAAN): HOUSING INEQUALITY WITH AUSSIES LOCKED OUT!

https://caanhousinginequalitywithaussieslockedout.com/2021/11/01/report-on-what-is-propelling-australias-house-prices/

From Four Corners copied for the record! It’s crook! (ed)

https://www.abc.net.au/4corners/four-corners–what%E2%80%99s-driving-australia%E2%80%99s-real-estate-frenzy/13612062

Going, Going, Gone: What’s driving Australia’s property frenzy

“I just don’t believe how much prices have jumped. These prices are far exceeding what I think is a fair and reasonable market price.” Buyer’s agent, Sydney

Across Australia, property prices are going through the roof, pushing the total value of residential real estate to a staggering nine trillion dollars.

“It is definitely the hottest market I’ve ever seen with the low supply, the lower interest rates and the cost of borrowing, money being so cheap.” Real estate agent, Brisbane

When the pandemic hit in 2020, there were fears the property market would collapse. Instead, house prices have risen at the fastest pace in at least three decades.

“We thought it would stop for a pandemic, but it hasn’t. I think it’s gone against all the experts and predictors out there; it just keeps going.” Auctioneer, Melbourne

City prices are eye watering, and the phenomenon is spreading. As people seize the chance to work from home, a stampede of buyers has sparked a property buying frenzy in regional Australia as well.

“Properties in Tasmania are literally selling within around about 48 hours. I’d say that for every property that we sell, we could probably sell it 10 times over.” Real estate agent

On paper, it’s made many homeowners across Australia millionaires. In reality, it’s seen buyers mortgaged to the hilt, while others are priced out altogether.

“The great Australian dream has been about home ownership. It’s now become a lot of people’s nightmare.” Housing policy expert

On Monday, Four Corners tracks the property price boom that’s fuelling risky and irrational behaviour and investigates what is driving it.

“People are buying property sight unseen from another state. People are waiving their rights to finance…they’re not doing building inspections…there’s a lot of people taking a lot of risk.” Buyer’s agent, Tasmania

For many people, the housing market has become unaffordable and it’s creating a generational divide. Home ownership among those under the age of 45 has plunged to levels not seen since the 1950s.

“For my generation it means a lot less home ownership. I feel it’s very unfair.” Sydney home hunter

There’s a sense of despair and disillusionment from many who have worked and saved, only to see their dream slip out of sight.

“I did everything right. I did everything that every politician has ever told us to do… The situation’s left me feeling completely defeated.” Nurse, Tasmania

As the divide between the haves and have nots grows, housing experts warn there will be consequences.

“Housing has become, rather than a place of security where you raise a family, something that you seek to create wealth from and speculate on. So, that is a really big shift over the last 40 years. And it’s one that I don’t think will serve the future well.” Housing expert

Going, going gone, reported by Stephen Long, goes to air on Monday 1st November at 8.30pm. It is replayed on Tuesday 2nd November at 1.00pm and Wednesday 3rd at 11.20pm. It can also be seen on ABC NEWS channel on Saturday at 8.10pm AEST, ABC iview and at abc.net.au/4corners.

Transcript

minus

Four Corners

1st November, 2021

GOING. GOING, GONE.

ADRIAN PISARSKI, EXECUTIVE OFFICER, NATIONAL SHELTER: The great Australian dream has been about home ownership; it’s now become a lot of people’s nightmare.

ELLY CLARK, HOMEBUYER: The last zoom auction we were on, we had 28 people registered to bid and it went nearly a million dollars over the guide….

Inflation is here to whittle way their debts | The Wentworth Report

https://wentworthreport.com/2021/10/28/inflation-is-here-to-whittle-way-their-debts/

Inflation is here to whittle way their debts. By David Evans.

Our paper currencies cut the last link to gold in 1971. Henceforth money printing was no longer constrained by the supply of gold.

Since 1971, the amount of money in the world has increased dramatically, far more than the population or the amount of goods and services on offer. So prices have gone way up. For instance, in 1971 a house in the US or Australia typically cost about $20k.

Inflation is heating up. Why now? As I predicted publicly in speeches in 2011 – 2012, the central banks are attempting to run a true inflation rate of about 10 – 15% in order to reduce the value of the huge amount of debt. It has started. It is not obvious yet, because the inflation measures were deliberately tampered with to make inflation seem smaller than it really is.

Society normally has an amount of money that is about one and a half times the GDP. Under our current money system, money is debt — every dollar is someones IOU, created by the act of borrowing from a bank. The amount of money is thus equal to the amount of debt.

Voters prefer having more money, so the political pressure to lower interest rates and make borrowing easier has been immense. The obvious happened: since 1971 (or more particularly since 1982, after a decade in which inflation was seen to be brought under control so people could trust paper currencies), the ratio of debt to GDP reached historically highs like in 1929 — and then a whole lot more:

By 2008 the debt bubble could not grow further without government assistance, so we had the GFC. Since then we’ve had stagnant economic growth and a steadily widening gap between rich and poor. The central banks, who are in charge of the money system, have basically two possible remedies.

The first is deflation. Raise interest rates and reduce the rate of debt expansion, or even reduce debt. This was the response to the 1929 crisis, and the results were appalling. It is a non-starter today because most governments have too much debt. For example, if the interest rate in Japan reaches 2% then the Japanese Government has to spend its entire tax income just to pay the interest on its bonds — so interest rates in Japan will not exceed 2% any time soon.

The second is inflation. A few years of inflation will whittle away the value of the debt currently held. Just hold down interest rates, do a bit of printing, maybe some massive government spending — all politically popular in the short term. To get us back to a debt-GDP ratio of 150%, at an inflation rate of 10 – 15% (tolerable, as in the 1970s, without risking hyperinflation) will take about 20 years. Until 2040, if all holds steady (it probably won’t).

Most people don’t understand inflation, and it will take years for the general public to catch on. Some businesses will go bust under the inflationary approach, but it won’t be the economic cataclysm of 1930s America. The politicians and banks were always going to choose the inflationary route. After 2009 and economic stagnation set in, something had to be done. It’s taken a while of dithering, but finally with the covid money printing we have started down the inflationary path.

How China’s Model of Dictated Economic Growth Blew Up, by Wolf Richter | STRAIGHT LINE LOGIC

https://straightlinelogic.com/2021/10/23/how-chinas-model-of-dictated-economic-growth-blew-up-by-wolf-richter/

The Chinese government steered prodigious amounts of debt towards real estate, and now China is paying the price. Perhaps a planned economy isn’t such a great idea after all. From Wolf Richter at wolfstreet.com:

The debt-fueled property & construction bubble that drove its growth turned into a huge explosive mess with an enormous amount of debt.

It’s mind-boggling just how important the residential property sector is to the Chinese economy, to what extent government-dictated economic growth was achieved by building more apartment towers, and it’s even more mind-boggling how much debt residential property developers have racked up, and how much household wealth is tied up in the property sector at multiple levels. Then there are the demographic headwinds the property sector has been facing for years, that are coming to the forefront. So now there is a property crisis in China that is making the US mortgage crisis of 2008 look like child’s play in terms of magnitude. The central government has been trying to deal with rampant real estate speculation and prevent it from going even more haywire and take down the financial system and the economy.Continue reading→

China’s property sector stalked by Evergrande default fears as developer misses third deadline – ABC News

https://www.abc.net.au/news/2021-10-13/china-property-sector-stalked-by-evergrande-default-fears/100534144

  • Evergrande faces staggering debts of roughly $400 billion
  • The firm missed its third round of bond payments on Monday as investors wait to be paid $200 million in coupon payments
  • It will be formally declared in default if it doesn’t meet its October 18-19 payment deadline…

The IMF Should Be Eliminated, not Expanded | International Liberty

https://danieljmitchell.wordpress.com/2021/10/11/the-imf-should-be-eliminated-not-expanded/
I’m not a fan of the International Monetary Fund (IMF). Since I work mostly on fiscal issues, I don’t like the factthat the bureaucracy is an avid cheerleader for ever-higher taxes (which is disgustingly hypocritical since IMF employees get lavish, tax-freesalaries). But the biggest problem with the IMF is that it promotes “moral hazard.” More specifically, it provides bailouts for irresponsible governments and for those who foolishly lend to those governments. The net result is that bad behavior is rewarded, which is a recipe for more bad behavior. All of which explains why some nations (and their foolish lenders) have received dozens of bailouts. Oh, and let’s not forget that these endless bailouts also lead to a misallocation of capital, thus reducing global growth. In an article for the New York Times, Patricia Cohen reports on discussions to expand the IMF’s powers...

APRA’s mortgage crackdown catches out hopeful home buyers – ABC News

https://www.abc.net.au/news/2021-10-07/apra-crackdown-on-maximum-borrowing-limit-hits-first-home-buyers/100518444

… this week, the financial regulator announced banks would have to start
demonstrating, from next month, that new borrowers were capable of making mortgage repayments if home loan interest rates rose 3 percentage points above their current rate…