Quote:
Originally Posted by Bjorn_Tasty1
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.
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you canīt compare holland to the united states.
the dept to GDP in holland in 64 % in USA it is 107 %. the dutch economy is healthy and the real etsate market in such a small country canīt be compared because of the very limited land area and emplyment rate is at 76,2 % compared to 60 % in the USA.
so donīt worry about this. the problem we have right now is the same we had in 2007/2008 and this problem is GLOBAL.
I am not sure how familiar you are with the problems of 2008 and why the world was ending up in a disaster. but if you go really deeper in that you would probably see that the same thing happens again - just worse than in 2008 because the amount of money in circulation has doubled up since than. there is more money in the flow as credits need and this leads to the fact that it will be lend to people that canīt pay it back.
at the end of the day the normal taxpayer have to pay this bill.
do you really think that you know the amount of money all western countries paid to the banks? I doubt it, because that was a fraction of that what they paid to the AIG (biggest US credit insurance company). their undercoverage alone amounted to more than 1 trillion of which the american state only paid 60 billion. where do you think the other money came from? if you hadn't saved this company, more european and worldwide banks would have gone under.
interest rates are only possible if someone lends money and pays it back with interest rates. also here supply and demand count. but if the supply is bigger than the demand, risk markets are the only way. this may all look nice at the moment but can not go well in the long run.
this is exactly what is happening with the US economy where no bank turns off the credit tap, just like the dutch banks wisely do. there more and more credit is being pumped into the market.
what they do is a variant of friedmanīs helicopter money theory. the only difference is that the money is not given away but given to people who can never pay it back. banks made an insurance for it and the capital of these insurers comes from smaller savers, pension fonts and municipalities. so if this insurance can not pay whoīs money is lost?
to understand economy and effects you need to know much more as just the headlines of some scandal magazines and internet blogs from dilettantes.
because this is such a complicated issue it is so easy to fool people with bullshit theories.