While a lot of people (including me) in crypto are looking toward a large surge in value across the board in the next six months, the economy as a whole is probably heading into a severe downturn, as all of the debt that has been created starts to effect conditions. I was reading an article in Australia as the overheating housing market are starting to be addressed and fear is creeping in. Many have taken on large amounts of debt into a market that has averaged 20% over the last year, which is enormous in real estate. The last time housing value grew at the same pace was back in 1989, just before a global economic meltdown, which was called in Australia by the Treasurer, "The recession we had to have".
I was eleven or twelve when that was said and interest rates on housing rapidly increased and looked far more like credit card interest. My parents took a second loan on the house in order to cover expenses and the recovery was very painful for all concerned. Well, not all, because as always, a small group of the population benefitted very heavily before the crash, during the crash and after the crash.
It is no different now, as over the last couple years while the governments have been pumping future money (inflation) into the economies globally in order to keep people afloat, that money has flowed into the pockets of the same group again. The wealthiest amongst have made massive gains on an already astronomical wealth gap and as they divest first to instigate the collapse, the retail investors will fall into line behind them, taking massive losses, only to have their blood vacuumed up by the group at the top.
This is a rinse and repeat economy, where essentially the same group will continually control the flow of wealth and only let people taste the rise, in order to chop them down again and se how much more they can extract. It is not the wealthy who aim to inflict pain on everyone else in general, it is just the way incentives are aligned and how the rules work, or can be manipulated to work.
This is going to obviously affect the crypto markets also, which means there is going to be far more volatility to come, which is good for those who are able to make a few good decisions, bad for those who like I have in the past, only held. However, holding isn't such a bad thing either, since there is far more upside in crypto than there is downside, despite the massive movements.
This is something a lot of investors don't fully understand or acknowledge when considering getting into crypto, as while yes, there can be 50% swings across a month, or 30% swings in a 24-hour period, long-term, the upside potential soaks up the loss and adds far more gain. The premium paid is the risk potential, not the price - at least when it comes to the projects with some legs. Factor in the possibility to gain yield "dividends" on what is held, and things change again.
Yes, Bitcoin might crash back to 10,000 at some point and all the other tokens will follow suit, but even then there will be a lot of people earning from holding. It might not be as much as they want or as much as today, but these trickles will matter and for some, it will actually be a lifeline in the worst of times that see them through, whilst still holding onto their principle. It is a bit like having the value of a housing property drop considerably, but still able to earn on rent to cover some of the overheads. Plus, there will be more holders, more builders, more people willing to move their wealth into the future of crypto, so I don't think the floor will be as low as many predict.
But, for the majority of people in the economy, economic collapse leaves them at the mercy of the people who engineered the economic collapse, with very little possibility to make their own decisions. Many will lose their jobs and many who were encouraged to push their debt to the max due to low interest rates in order to get a house will no longer be able to service their loan, so many will also lose their homes. People who just prior were living the illusion of the "good life" will suddenly feel the very visceral reaction of realizing that the life they were leading was not their own, it was the bank's all along.
Debt is not a sustainable condition and while currently it is ranging far and wide, eventually the bell will ring and it will come home to roost. But, debt is an conceptual proxy that attaches to a tangible reality - us. It is a marker on our economic activity, just as the money in our bank is, and as such, it can be bought and sold, as well as used to control the flow of wealth. And while we are exposed chickens, the house is also full of foxes - and they are the ones who rang the bell.
Taraz
[ Gen1: Hive ]
Posted Using LeoFinance Beta
I'm old off enough to remember Keating's mate Hawke, claiming that by 1990, no Australian child would be living in poverty.
The BS hasn't abated, only inflated.
One of the things about the housing market crash, was that it was artificial. If people held then they lost nothing, but trying to use their homes as investment vehicles did not help many. So the banks who already held the bank note on their house became the real holders of the homes value when they foreclosed. Once again the Holders won out. I sold and bought homes during the so-called crisis,
The crypto winter if it does show up, the holders are the ones that will survive, and those that are able to see the opportunities and take the risk, knowing that things may not work out. I do not know enough about the finances of crypto to make any call other than to hold and continue to build.
I did know something about the housing market in my area when selling, and I studied the housing market in the area I was moving to for about 8 months, things worked, but it was a risk.
This is the case, but many (as you said) don't own, they are essentially renters and if they can't pay the mortgage rent, they get evicted.
I have been lucky with real estate in Finland, but not so lucky with the timing in Australia.
When it comes to crypto winter, I am confident at this point that even doing nothing, I will come out the other side better off than those who panic.
It becomes I think knowing what you hold, are they brand name tokens that will survive a crypto winter like BTC, LTC, ETH, etcetera, kind of like in real estate-location-location-location. A good location is going to hold its value more than a location in the middle of crack alley.
I was trying to brush up on some facts behind the link between financial challenges and suicides. Turns out it is pretty significant. I reckon we all need to have a more philosophical view on money and what it does because the anxiety that comes from wanting to meet financial obligations and desires has made us all apprehensive
They often link the social side, but financial side plays a role in that too. It is hard to meet up with friends and feel comfortable, whilst unable to pay the bills.
Fair enough. I always feel better knowing there's something in my purse
Me too. I hate stealing empty purses! ;D
I have had some financial challenges in my life - it didn't make me want to socialize more.
People who just prior were living the illusion of the "good life" will suddenly feel the very visceral reaction of realizing that the life they were leading was not their own, it was the bank's all along.
You can say this again oh my this is happening since ages. I have met people who were devasted by losing their home to the bank. They "invested" in their house as it was their own , although the loan was on 20 or 30 years . So many things can happen in this time. I feel empathy and I can see the sadness of those who had to give up their dream of finally owning their own property. Debt is good if you take a loan on a house and rent it , so it could bring you money. But once you move in, you bleed money . And if they're bank money...The bleeding can really be deadly.
Yes, which is why the news saying "interest rates aren't expected to rise for the next two years" is ridiculous to use to make decisions.
I am hoping that at some point, I will be able to get a rental property or two, to offset the family home.
It would be awesome to get that, I saw in your posts how much time and money consuming it is to renovate your home. Literally draining you of money. The rental property could bring in some very nice cashflow and it would make your life so much easier. I saw some people renting out one of their rooms in their house as an Airbnb place, for additional income. Or they build a tiny space in their backyard for this purpose too. Has this crossed your mind ?
The housing prices have increased more than double during the pandemic in my country. Why? Because people need a house for lockdown, a house is needed for remote working?
There is not any sensible explanation, to me. I can increase the value of my house as well, however who will pay what I want? Besides, I don't understand who buys those houses with such high prices. What important is that in whose hand this ballon will explode.
In Australia, it seems to be driven by FOMO, where the news is saying "you'll miss out unless you buy now" making the problem worse. It is a self-fulfilling prophecy.
Looks like hive has made a small surge already.
I am hoping there is more to come. 4-4 dollars around the turn of the year?
This is how this goes probably since money is created. The rich gets richer (usually), and the poor gets poorer (or at least remain poor).
If only someone would invest something better than money. Everyone would be equal. No wealthy, no poor, no middle class.
There is no such thing as equal, as everyone is different and values different things. People want to be acknowledged for the differences and the values they add to the community, so some form of "marker" is required. The money market however is truly broken, so it has to be replaced.
We need to stop depending on the chickens... Then when the foxes feast, we have an alternate source.
Absolutely, starve the foxes :)
That could take a while, they're so fat that if the chickens didn't walk up to them, they would have to eat the straw 🤣
lol. Yep, they don't have to be very fast to catch a meal - but they are still clever.
If only we knew the future! LOL I heard that there are two economic resets in play. There is also some who hope for Gesera and Nesera, Many feel it all needs to crash to be fixed. I only we know we live in unprecedented and strange times.
It is interesting that we have come to accept that the only way an economy can work is if it crashes. Is that working? People complain when their phone crashes, but accept that the economy must.
I read with horror in my heart and head :P Someone who took a massive debt to own a place during this pandemic.
So many have. I know people in Australia who proudly say they bought in the last year and have seen the house price go up 10% - fine, until it crashes 20% and they have a debt level they can't manage, as inflation and interest rates rise.
In my case, it was time. I had to make a decision whether to own or continue to rent. At my age, I wanted to own and pay the mortgage. Let's see how this decision will haunt me in the coming years with high interest.
Hopefully, you are one of those who will be building additional income streams over the next year or two.
Hello sir @tarazkp, I want to ask you something. Though I am not sure is it legal to ask such here. But as a new user I know little scope about hive.
Anyway, I have seen about hive power delegation. I notice that some people delegate their hp to some specific accounts, they later they get upvote from them. How it works? Can you tell me something about it? Or can you tell me a place where I can get enough information.
I don't know much about that, but unless you have more Hive saved away somewhere, 17 HP isn't going to get you much.
If there is a noticeable profit, I will increase my hp.
My one of friend took the loan 100k (in USD) in 2012 .He had to repay the loan with bank interest in next 20 years . He was one of the best crypto futuristic also had courage to take bigger risk. These 100k USD He just blindly used to buy Bitcoin .
Today He repayed bank loan + bought new house in Singapore with running his own crypto exchange .
I surprise how crypto change someone life so fast . we had average wealth in 2012 but now i am still average and my friend is multi-millionair.
But,Investment with always predictable mind ,can either make you rich or poor .thats also a big fact.