Quote:
Originally Posted by thommy
this is just foresight:
https://www.experian.com/content/dam...18-q1-safm.pdf
as you see there the american boom is based on loans like never before.
the same you can see in real estate as people have been forced to buy a house now before intrest
we all have seen in the 2008 crisis to where that leads to.
when loans are given to people who are already in debt, this leads to payment defaults. payment defaults in turn ensure that those purchased goods go to market cheaply.
that will happen first with the cars and then with the real estate.
every company with foresight will prepare itself for this now.
at the moment there is still a desperate search for workers in the construction sector because there are not enough workers to fulfil the previous construction orders. on the other hand, sales of new houses have already collapsed to such an extent that massive job losses are already foreseeable in the near future.
if you would know that most of your quality competitors would not be able to pay their loans back and you would know that you can buy high quality and quite new second hand servers for a fraction of the new price, you would not order many other new ones.
and that means that there is no need to produce them.
an economy is not healthy when the consumption is financed primarily with loans to private households. A loan is nothing else as to spend the money from the future today.
but what happens when this future comes ? |
Are you describing the Dutch economy? This is what is happening to the dutch economy also. Prices of houses are on an all time high, even higher than before the crisis. Cause of low interest, foreign investors that buy the houses, building cost are 10% higher, government stimulated buying a house etcetra. Now new commers in the housing market can't get a mortgage cause houses are too expensive. Expect the rental price to go skyhigh. And all the people that didn't get a higher salary for some years can get 0,5% extra this year! Wow, where did the money from the booming economy go? In Holland we must have as dumb presidents as in the USA.
Mexico has a crazy president and in 1 month Brazil will have another corrupt president. Doesn't matter who they choose in Brazil, all are corrupt. And the next president of the EU is also a crazy fool. The drinking buddy of Juncker, Timmermans (Dutch). The fool that speeched in Ukrain.
I think there is enough reason to go down.