The Nomad Economist and The Atlantis Report Thursday PM 3-25-2021
The Nomad Economist
Powell, Do You Even Know What The Economy Is ?
Premiered 22 hours ago
After all the destructive policies we have seen coming out of the Eccles Building, it may be time to ask Fed Chairman Jerome Powell, "Do you even know what the economy is?"
All the easing and stimulus has taken us to a place we could call Bubbleville. It has bolstered asset prices and speculation but done little to help Main Street or generate a strong economy.
This destructive force was unleashed long before Covid-19 came into the picture and hanging our economic misfortunes on the pandemic may sound reasonable but is far from accurate.
Is The Housing Market About To CRASH In 2021 ? -- Real Estate Market Bubble 2.0
The Atlantis Report: Premiered 2 hours ago
Is The Housing Market About To CRASH In 2021 ? -- Real Estate Market Bubble 2.0
The world will remember this year as the year normal life was torn up by the pandemic. Millions of Americans still remain out of work. The US economy continues to languish, burdened by government lockdowns and other pandemic-related factors.
Retail sales have dropped precipitously over the last several months, underscoring the economic malaise.
Our national debt recently eclipsed $28 trillion. Corporate debt was already skyrocketing prior to the pandemic. All of this is driven by loose Federal Reserve monetary policy designed to drive borrowing.
But there’s another segment of the economy buried in debt .The commercial real estate market.
For many owners of commercial real estate, the big trouble hasn’t even started. Federal Reserve data show U.S. commercial property debt climbed to an all-time high of $3.06 trillion , up from a 10-year low of $2.2 trillion in 2012. State governors seem determined to bankrupt every small business.
Large employers are happy to cut their office space requirements by letting employees continue working from home, even after the pandemic is over. Work from home policies will be key to attracting and keeping the best employees. Employees are happy to move to cheaper areas with a better quality of life.
The problem is compounded by the fact that the value of the commercial real estate is falling like a rock thanks to a shift toward work-at-home and the brick-and-mortar retail apocalypse.
In a nutshell, the commercial real estate market is plagued by too much debt and not enough assets. This is nowhere near the problem that the housing bubble was in 2008, but it is another example of the economic distortions caused by the Fed’s monetary policy.
Now the question is, Who will pay off all that debt? It looks like the borrowers will leave it to the lenders. And the lenders will leave it to the taxpayers and (ultimately) Fed money printing.
We have seen this movie in the past, and we will see it again in the future (on steroids).
The lenders -aka the financial system - will sink, and most of them will be bailed out. This is turning routinary, although the specific scapegoat may differ.
The financial system collapsing periodically is a feature, not a bug, of our Fractional reserves- fiat central bank money combo.