Banks Panic As House Price Bubble Crashes In America

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Now it’s not exactly a secret right now but the housing market is at its breaking point we saw the strongest housing market in history with prices exploding over the course of about two to three years but we saw no comparative increase in people’s earnings or their wealth to actually pay for this overblown market instead we saw low interest rates and free money

Thrown down from the sky by our government but this was never sustainable and people like myself have been saying that ever since it started banks and financial institutions though have been trying to hide these problems for years of course they’ve been doing that though they’ve been profiting from this boom more than ever and they of course wanted to continue but

Every time they reiterate their insane claims that everything is fine they slowly lose credibility so they are slowly turning around as well they’re finally realizing that by trying wolf for all of these months they’ve been eroding away their trust with the public and they are admitting that they were all wrong banks are now scared they know a housing market crash

Is is coming and they don’t know how to stop it now last week goldman sachs put out this report behind me here titled why home prices are poised to full now the content of this is probably quite obvious then isn’t it it’s a little bit self-explanatory they’ve looked at the data they’ve looked at home prices at people’s incomes at their savings at their mortgage

Costs interest rates and where interest rates are likely to go and then inflation and everything else you can imagine as well and their conclusion is that home prices are going to fall and not only in the united states but in new zealand in canada in the united kingdom in hong kong pretty much everywhere you can think of these housing price falls that goldman is

Now explicitly predicting are also expected to impact our economies on a major way as well the reasons behind this are obvious too housing is a very large part of our economy millions of people are employed by various parts of the housing market there are construction workers who actually build these homes but when housing prices full demand for new homes falls as

Well and so less construction occurs because it’s simply less profitable and that means fewer construction jobs there are realtors who of course usually get paid via commission but when their houses that they’re actually selling a fool in price well their commissions get smaller and as the market slows down the amount of commissions they get smaller as well there

Are mortgage brokers who get paid to help people buy homes and less buyers means fewer mortgages there too in financial markets those who package up and sell all of these debt instruments off to random investors will see less work and some employment in this space will fall as well this will all ripple across our economies just like this but in a hundred other ways

As well a housing market crash will without a doubt cause massive damage to our economies it will cause more unemployment and will on average make all of us poorer to quote goldman’s analysts themselves our analysis suggests that housing poses downside risk to gdp across all g10 economies now what are the g10 economy is well they’re basically some of the 11 yes

I know that’s a bit confusing but 11 most developed secure and advanced economies in the world the countries that you probably live in the us the uk canada japan italy germany france sweden switzerland belgium and the netherlands now goldman specifically thinks that every single one of these economies is at fundamental risk because of the housing market crash and

They also specifically named a few other countries and places like australia new zealand and hong kong which are also going to see major house price declines now that does mostly summarize this report that they put out a housing market crash in every major economy is on its way or in some places it’s actually already here according to the goldman sachs new report

But i know what you will think you want to see the actual data that they’re putting out to support this idea now for investors 2022 has been a very difficult year as we’re finally paying the price for inflation in our asset prices goldman sachs even released a shocking report a couple of weeks ago saying the classic stock and bond strategy won’t be enough to keep

Investors afloat and that’s not really surprising with almost all companies losing value this year and the s p 500 falling by well over 20 percent as a result goldman sachs says the ideal allocation for stocks has shrunk from 60 to around 45 but what do they recommend you do with that difference in order to salvage your portfolio while they say you should invest in

Real assets like art and that it can not only protect your purchase in power but the last time inflation was this high art appreciated more than real estate and even gold so how do we invest in fine art well with this video sponsor masterworks of course now i’ve been working with masterworks for almost a full year now and we’ll just take a look at their results so

Far six pieces of art have been bought and then sold for an average net return of 29 to investors and that’s during covid and the subsequent bear market 2022 as a result of this brilliant performance masterworks has had to acquire and release more art on their platform to meet demand and there is now a wait list to join but you can skip that wait list by clicking

The link in the description of this video so go ahead and join the thousands of other stoic finance subscribers and click the link down below in the description well this graph here that i’m showing you right now is put together by goldman sachs and it’s their predictions for the us the canadian and the british housing markets the green here is for canada the blue

Is for the us and the black is for the united kingdom now this graph also shows us a little bit about what we’ve seen so far a very big housing market boom that started around covid as we all know but it also shows a housing market peak that has already happened in canada and just about started in the us already in canada housing prices are already down by about

Seven percent from their highest points in the us we’ve already also seen that peak with house prices in the us on the whole actually down about 0.7 percent so far in america then it does seem that the housing market crash has literally just started and in the uk house prices are still rising very slightly and they are expected to continue to do that for a couple

Of more months before finally starting to crash over here as well now goldman sachs is predicting that canada’s housing market will fall another 15 on top of the seven percent that it’s already fallen for a drop of 22 percent they’re also predicting a u.s drop of about 10 from their peak and a smaller drop of about five percent in the uk from our peak over the next

Two years but actually right off the bat it’s actually far worse than it looks from those figures because that is nominal data which means it ignores inflation if inflation remains at nine percent in the us for one more year and then it stays high at five percent for the year after that then the 10 housing market crash would actually be a 24 housing market crash in

Real terms in america in canada that nominal crash of 22 percent would be around 36 and in the uk the nominal crash of 5 would be 19 which is far more scary and that is let’s not forget actually using quite conservative figures for inflation let’s not forget that while our central banks are now mostly trying to fight inflation our governments are not biden announced

As a new spending plan every single quarter where he wants another one or two trillion dollars to invest in the country and this will only make inflation stay higher for longer in the uk our government has just started tax cuts and spending sprees for the very same reason which will also make our inflation worse if we see two or three more years of sustained high

Inflation around the nine or ten percent mark then these housing market crashes will quickly approach the 50 crash mark in real terms now it’s at this point that you might expect me to give you a silver lining but that’s unfortunately just not going to happen the huge mass elephant in the room here is that this report is still too optimistic because all of these

Reports by these financial institutions our banks are always optimistic these banks make billions and trillions of dollars every single year on the back of booms in housing markets so they want them to go on for as long as possible and the research they reports put out like this have real impacts on people’s minds and thus what they actually do what i’m saying is

That when goldman snacks comes out and says that there will be a recession or a housing market crash that causes people to save more money to spend less and to not buy homes and so it helps to create that housing market crash they don’t want this so they always doctor their data to make it as optimistic as possible and the evidence is literally everywhere around

You this right here is a post from goldman sachs from february the 8th of 2022 about nine or ten months ago from today now in it goldman sachs analysts are talking about the housing market over the next few years and base basically they’re bragging about how strong it’s going to be now it is in podcast form so i’ll link it down below for anyone who wants to go and

See just how long these people are but some quotes from the podcast might just do that justice so i think for the shorter term call it three to five years fundamentals are in place to continue to see some great action and we expect 2022 to be another robust year based on what we’re seeing today we expect it to be another busy year they came into this year with

Inflation sky high and interest rate hikes coming telling us that everything was fine and actually it was even better than fine that the housing market boom was going to continue now just 10 months later they’ve already had to revise back these god awful predictions because they were so insanely off base even the research about the housing market that goldman

Sachs put out one month ago that can be categorized by this title here from business insider has had to be revised down because it was still too optimistic these institute solutions don’t actually want you to know what’s going to happen they want you to behave in the most reckless irresponsible way possible and spend every penny you have because that’s how they

Make their money the only way they can do this though is by tricking you into thinking that the economy is perfect that it’s even better than perfect that the housing market is strong and secure and then it’s the best time ever to buy a house when it plain and simple isn’t the truth is that in this day and age when interest rates rise it is inevitable that housing

Prices will crash this is because we as humans tend to spend as much money as possible when buying a house and why wouldn’t we it’s an asset that can grow our wealth and we spend sixty percent of our lives living in this home so why not make it as nicer one as possible the problem is this means that there is no wiggle room when things change for the economy when

Things go downhill when interest rates rise we can’t afford to buy homes at these prices anymore and when wages full we again can’t afford to buy homes have these prices anymore which means buying pressure collapses overnight yes there are some fundamental things stopping it from crashing as badly as something like the crypto market has the 25-year fixed rate

Mortgages give a lot of security to a lot of people across the us and if you bought your home with the intention to live in it for years to come instead of trying to make a quick buck then the chances are you will be fine but fixed rate mortgages won’t change the fact that the money at people’s disposal to actually buy new homes will have decreased and so house

Prices will decrease as well the housing market and the prices that you see are determined by active participants by the buyers and the sellers who are actively buying and selling not by the people who never intend to buy or never intend to sell their homes as always the best course of action here is just to be sensible don’t push yourself too far and buy stuff

That you simply can’t afford don’t buy the biggest truck you can on 96 month finance just because the monthly payments look okay right now don’t take silly unnecessary risks and make sure to save a portion of your paycheck every month and do your best to ensure that you don’t have to sell your home once the crash has taken hold if you can do all of that then this

Could just wash over your head like a wave it’s only if you get caught up in the white water that this will actually cause you to suffer i also know that there are an awful lot of people who are actually quite excited to see something like this to see an institution like goldman snacks come out and say home prices are going to fall because quite frankly millions

And millions of people have been priced out of the markets by low interest rates and free money from the government and this is the first step in correcting that gross injustice

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Banks Panic As House Price Bubble Crashes In America By Stoic Finance