Commercial Real Estate Is The "Boa Constrictor" That Will Crush The Economy And "Force The Fed To Restart QE"
Summary: Bank liquidity may recover, but solvency issues persist due to commercial real estate (CRE) troubles, especially in the office sector. Morgan Stanley predicts a 40% crash in CRE, with significant risks ahead. A bursting CRE bubble could lead to low growth, similar to the 2008 housing crisis aftermath.
I would have to disagree that CRE will lead to the long lasting pain like it did post 2008. The solution to 2008: reliquidate the banks but leave the home buyers holding the bag meant there was a huge wealth transfer from the lower and middle class to the banks. This transfers dollars from spenders to (given the now tighter rules and fear) savers. This meant all those dollars had a significant drop in velocity and in a consumer economy that'll lead to significant economic slowing.
I don't think the Fed will make the same mistake, I think they will make all new mistakes. I think they are more likely to reliquidate EVERYONE. This is not instantly inflationary however as that is just solidifying the credit dollar in the system. It becomes inflationary as those new dollars get releveraged and new credit is created against it.
Either way, this is good for Bitcoin.
Iām debating trying to buy my first home. Do you think patience in this market is key? Or will it just be flat then up again when they print more?
wow
