Posts
5960
Joined
8/10/2009
Location
Frig Off
CA
Edited Date/Time
6/15/2022 9:02pm
Just sitting over here wondering how long until bad turns to worse. Seems like our economies are in a downward spiral and thinking drastic measures may be required to prepare for what’s coming.
It’s tempting to liquidate everything but our currencies are plummeting. Crypto is in a freefall. Real estate seems like it’s likely to follow shortly. Where/what to do with your liquidity? Precious metals/commodities?
Crazy times we are living in. My wife and I have good equity in our home but I wonder if it would be smart to get out before prices plummet, or just hold on because we can afford to. We are upper middle class and aren’t suffering but by no means do I think we are immune from a catastrophic depression era. I wish I had the answers and knew how inflation is going to effect home prices, etc. What I’m concerned about is to be standing here with my dick in my hand, not doing anything, while I watch our equity bleed out.
It’s tempting to liquidate everything but our currencies are plummeting. Crypto is in a freefall. Real estate seems like it’s likely to follow shortly. Where/what to do with your liquidity? Precious metals/commodities?
Crazy times we are living in. My wife and I have good equity in our home but I wonder if it would be smart to get out before prices plummet, or just hold on because we can afford to. We are upper middle class and aren’t suffering but by no means do I think we are immune from a catastrophic depression era. I wish I had the answers and knew how inflation is going to effect home prices, etc. What I’m concerned about is to be standing here with my dick in my hand, not doing anything, while I watch our equity bleed out.
one person starts talking about a recession, then more people do, then even more people...then the media starts reporting about people talking about a recession...then it starts seeping into main street types...soon everyone is expecting a recession, so they start acting like we are already in one, changing spending habits (spending less), then those changes are reflected in wall street earnings, then the stock market drops, then more people start changing their spending habits...then every slides downward....
then one person starts talking about the recession being over, then more people do, then even more people do...media starts reporting that the some people think the recession is over...then that thinking seeps into main street types...soon everyone is expecting the recession to be over, so everyone starts acting like its over, changing spending habits (spending more), then those changes are reflecting wall street earnings, then the stock market goes up, then more people start changing their spending habits, then everything starts shifting upwards...
then one person starts talking about another recession...
I've always wondered about that...
If you’re a homeowner, it’s definitely your market. Houses are selling within a few days. You’re guaranteed to get way over your asking price but, will you hold out with cash in hand until the market drops to find something nicer/cheaper? Or, will you be looking at something similar to your current household?
The Shop
It seems like if/when it happens it may be sudden and drastic. When that time comes you’ll definitely be in the driver’s seat, assuming you can even qualify for a mortgage depending on how high interest rates are.
It just seems like so much doom and gloom on the horizon. The middle class is slowly getting slaughtered. Our economy is propped up on nothingness, how long can we keep pretending that our countries are not bankrupt and at what cost? Where is it going to take us?
I don’t know what the future holds but, construction is slowing down a bit here in the Seattle area. I know of one company that tracks their fire sprinkler heads. The previous three years, they saw an average of 8% increase each year. 24% increase over three years. Now, it’s already platued and, starting to dip.
The way I see it is, supply in demand. If there’s no demand prices drop. Same goes for bidding jobs. To get work, contractors will eventually lower their prices. I could be pissing in the wind here but, it’s just a guess.
Essentially, some want the bandaid to be ripped off and go up an entire point or 1.0 to stymie inflation, but it would hurt the markets. So the fed has been hoping for a “soft landing” by stating the plan in advance(even though they were WAY too slow reacting) and sticking too it. This last cpi report stated things are continuing to get worse which means the fed may have to increase either the rate of the hikes or the hike size themselves.
In the end, fuel costs need to go down to allow cheaper deliveries of goods, thus helping a bit on suppliers side. In reality, when you have people not working at the rate the US has, the costs of goods and services are up due to demand and eventually they will need workers back, fuel costs lower, housing market to cool down, and consumers not willing to pay for said goods/services at the current price.
For the first time, the US has his a trifecta and not in a good way. The fed can’t use printed money like they did for 2008 and Covid. The deficit is too large for the private sector to help pay by giving money and the government paying them back with interest. On top of the regular inflation.
NOT GOOD
Fuel is key as far as I can tell...Somehow, some way fuel needs to start coming down (this China covid thing seems to be in the news today, and see a dip in prices...but we need more than that).
Cryptos is getting destroyed and that likely to ramp up in the coming weeks, I don't think that has as much penetration in the economy as the hypsters would have you believe. There will be some mortgage defaults, hopefully it doesn't turn into 2008 again, but the market has been regulated at least a little more than back then.
The fundamentals of the US economy are still pretty good, recession or much slower growth is ahead.
Housing won’t lower raw material cost much when it slows down. It will take more than that to help the suppliers reduce costs.
It's way more complicated than I can fathom I'm sure but it's not a typical situation at all.
The market has been overpriced for a long time based on the PE ratio of the S&P 500 but a market correction doesn't necessarily mean recession. It means opportunity for cash holders.
The real estate situation here in SoCal is asinine. Again. This time for different reasons. It deserves a crash.
Pit Row
I don’t see things going up, but it’s certainly not coming down anytime soon
For about 20 years the Fed has artificially kept interest rates low and flooded the system with cheap money and debt so the Govt can spend more than they take in with taxes. Financial assets have got insanely overvalued and a lot of people have made money. But a lot of that debt didn't go toward investing in Companies expansion of goods and services and labor. The US is a massive importer not an exporter like we used to be and our debt to GDP ration was alway about 30 to 60%. After not taking responsibility for the 2008 collapse our debt to GDP quickly went to 100% and today we are at like 130% or something.
Inflation is 8% and in reality higher. What do interest rates need to get to to bring that down.
How does the Govt pay the interest on the debt if rates go up.
Who is going to buy the treasuries that the Fed is tying to offload from their balance sheet and the Treasuring needs to sell to the Fed to finance the Govt ?
What happens to millions of pension funds when the stock market crashes because the Fed raises rates 1 or 2%.
I try to read about this stuff and it gets really complicated when you think about the US dollar is the global currency and we are linked with all the global markets and currencies, the IMF and other central banks.
Its a hell of a mess and I dont know if we are headed for hyper inflation, depression, deflation. Default and a new
digital currency which would be a really really bad thing I think.
All I know for sure is we have been getting ripped off for a long time by the central bank and the Govt has been honest with us about any of it or willing to do anything serious or honest for at least the last 20 years or so.
I hope that people will start getting together locally and find mutual ground to figure out how to clean out our Govt starting with City Councils, state reps and the people we send to Congress. As far as I can figure there is no good reason for these financial disasters every one of them is caused or enabled by the Govt and Central Bank.
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