As expected, the Reserve Bank of Australia is highly likely going back on its "promise" that it wasn't going to raise interest rates this year, and they are citing that they underestimated the inflation rate. What this means for all of the homebuyers who FOMO'd into houses that they can't really afford to push the markets up 50-odd percent in the last two years in some areas, is they are going to now have to meet higher repayments.
They are saying that "it is okay" however, because they were means tested at a percent or two more than the record low rates. But, this doesn't factor in the rising inflation rate either, so while the repayments can be covered, the costs of living are going up - with the Consumer Price Index increasing 3.5% in 2021. However, costs like fuel (this is significant for most households) rose 32% in 2021 - the largest yearly increase since 1990 - remember those years?
This indicates that the fitness testing on loans might have been okay if everything remained equal, but that is not the case. The money for a person's loan doesn't live in a vacuum, it is subject to all of the other economic pressures and that pressure is mounting.
This isn't all doom and gloom though, because for those who are well-invested into the stock markets, they are likely to keep getting rewarded for it. However, all of those people who were convinced to get out of the stock market and use their investment capital to buy their first home instead, they are going to see the value of their home decrease - but they are liable for the higher amount of course, so if they sell, they will make a loss. But even if they manage to sell, the cost of renting has increased by 12.5% on average anyway - so it is damned if you do, damned if you don't really.
The economy as we know it is very much on its last legs. And what I believe is happening is that those with the ability are extracting all they can, while they can, and then burying it into asset portfolios where they can own something that will offer a return, even as the economy crashes. The current conditions are primed for this, creating the largest flow of wealth from poor up to rich ever witnessed.
Yet, most people are far too concerned arguing in fear to notice and it will only be in hindsight where we step back and assess, that we have been bent over and ridden very hard. If you haven't noticed, all of the conversations about dealing with the wealth gap and equality of opportunity locally and globally, have been superseded by the specter of an illness far more dangerous than starving to death from an inability to make ends meet.
Keep those handouts coming!
They call them handouts now too. Prior, they were "stimulus packages" that were required to keep the economy afloat in terms of economic and financial duress, but now they are handouts like food stamps for the poor. And, where do those handouts that are tax money borrowed from the future going? Into the pockets of the invested, through the companies that are able to operate in these conditions, while the little competition there was, is choked-out of the race.
I believe that because of this transfer from to wealthy and then conversion to assets that can be sold or rented back to us, using money borrowed from our future, which we will have to pay additional interest on also - a new asset class needs to be created. A whole new economy too.
This is where crypto comes in as what gives something value is the belief that it has value, other than the necessities of life we need to survive. However, most of the wealth in the world is not attached to caloric value type business, it is tied to the concept-based type. This means, it is replaceable with an alternative, which crypto assets could offer in such a way that it requires participation and activity in order to generate value.
But, this isn't some quick-fix job, it is going to take decades to wade through the much and climb over the artificial hurdles to get there. However, one disruption at a time, the industries start to populate and due to the decentralized nature of the ownership, it will be difficult to fully appreciate how valuable it is until they start linking up across chains and assets, to create a matrix of user derived and owned assets that encourage practical development to attract demand.
And, while people think that the wealthy will "just buy control of Bitcoin" there is a major difference in crypto that is vital to its development - the ability to walk away. That ability doesn't even require walking away with nothing, it requires walking away with what one has on the chain and then working to redefine what is considered valuable. We have seen this demonstrated with the shift from Steem to Hive, where the community of value, redefined which chain was worthy of their investment in time and money.
Economically and socially, we are entering into unchartered territory in terms of possibility, because at no time in history before have we had the technology we have to enable coordination at a global level, between people who do not know of each other directly. Whilst disorganized currently, alignment is happening and more innovation is happening daily to bring us closer together as an economic force, whilst allowing us to be independent in how we approach our lives.
It is no wonder we are getting locked up and forced not to gather en masse, but that hasn't stopped us doing it online. and where up until now the online masses have been the driving force to enrich the few, there is nothing stopping us taking ownership of our own digital experiences to affect our physical ones to build a new value loop. The process required is a paradigm shift and a forgetting of what we have been conditioned to believe, that we can't do this by ourselves.
Before redistribution of wealth can happen, a redefinition of what wealth is, is needed.
Taraz
[ Gen1: Hive ]
Posted Using LeoFinance Beta
Watch us.
I wonder how long people will stand and watch, before jumping in themselves?
Just until there's solid social proofing.
And I'm sure some of them will pretend to be early adopters ;D
Just
I wonder how long people will continue following MSM and relying on it. Ideally, it was created as a corrective. A power to balance the rest of the powers. It's quite aligned with them now, because...some people know how to use money and most people don't.
Before I get into that "to each their own" kind of rhetoric that the bitter part of me often runs to, I shall move towards where hope lies. In being fed up with ridiculous new and demands. In knowledge.
*I mean we do need education about matters that are not interesting and frowned upon. Mass education in that regard seems only possible if it becomes painfully obvious that it's needed. And most would still look for solutions by Big Bro while seeking to lay the blame on Big Bro. It's almost as if we need it as a religion. Simple, catchy, manipulative (cause only that seems to work).
!BEER
(Although that's a distraction. One of many. I know you can stay focused.)
View or trade
BEER.Hey @tarazkp, here is a little bit of
BEERfrom @manoldonchev for you. Enjoy it!Learn how to earn FREE BEER each day by staking your
BEER.What we have to be careful of is the digital pinoptocon (spelling?) that they are trying to construct and doing so at increasing speeds. Gobbling up data, land and all kinds of things that they weren’t easily able to do before. I’m optimistic for the future decentralization of money and what that will mean for us but I’m also nervous about the craziness that they are going to try to enforce.
Let’s hope bitcoin stays lower for a few more weeks or months, I’m enjoying the discount :D
This panopticon?
https://en.wikipedia.org/wiki/Panopticon
Will have to read - looks interesting!
That craziness is a concern, because honestly, most people will shy away from any type of conflict, even if it is social discomfort. The "can't shoot us all" paradigm only works when the majority are willing to risk being shot - if only a few move, they are picked off easily.
I should really get in on some more BTC buys!
I've noticed a lot of homeowners have most of their investments in real estate. The lack of diversity can hit hard.
It's not just something that the government can tax or ignore like foreign equities or cryptocurrency.
It is going to get messy in some places in the coming years, as for example in Australia, the "handouts" have been quite extreme combined with massive government-driven initiatives that have aided the wealth gap to expand rapidly. That level of money-printing is unsustainable and when it stops, it is going to stop at a time when the effects of it are pushing inflation up - higher prices and less to spend - it is going to get hard for many.
Australia is going to get hit extremely hard decoupling from China, Coal and climate change, too.
Canada is also in a lot of trouble. They were overspending like mad before covid, now it's completely irrational.
Banks can't afford to raise the rates or stop lending.
Governments can't afford the welfare and can't win elections with austerity, all while having debts they can barely maintain and a poor economy to fall back on.
Workers can't afford taxes and inflation.
Business can't afford taxes and to pay workers minimum wages.
Unemployed and non-employed people are the worst off because they can't afford costs of living and they make up the majority of voters.
I think that a lot of people buying houses in a high price here in my country. House price seems high for almost two years; however, I think that this ballon will burst. I believe those houses don't appraise for those selling prices.
It is going to pop and if people haven't the funds to pay their mortgage, they will lose their houses and, still have a mortgage to pay, while renting in inflated prices too.
This situation has made me say that "People had money" 😁
As we FEEL fomo about finding a house in Tasmania, we're also being a little cautious, anticipating an effect on the market due to interest rates going up and people needing to sell their houses as they are living beyond their means. I am a little shocked at how much some friends are paying for properties without the assets or steady, reasonable income to be comfortable about facing a mortgage that size. In many ways we're hoping for a bit of a crash, though that means OUR place will fall in value too. We have thought about selling now why the market is hot and just living in a caravan until the house prices stabilise or at least we're not in ridiculous competition for sillllllllly prices.
Saying that, Tassie is probably valued now at what it SHOULD be - it's always been undervalued, especially with how goddamn beautiful it is out there.
You know, I'd be happy with an extra 500k...it doesn't sound much to the wealthy but would make a helluva difference to us!
Me too. Perhaps they are banking on inheritance?
I remember there were stories of people selling their houses for a slab of beer and a bottle of rum back in the day.
"just a measly 500k" - changes everything, doesn't it?
A slab of beer and bottle of rum? I'd pay twice that much!!!!!!
And yes, some people are getting early inheritance. Over my dead body, says Dad :P
Yeah - It was just after the GFC and I think it was on one of those gumtree type sites - I was trying to find an article but need to dig deeper by the looks :)
The existence of technology have really helped in solving so many issues easier and faster
And creating many issues too.
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See you at the next Power Up day to see if you will repeat this feat.
May the Hive Power be with you!
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Check out the last post from @hivebuzz:
Things are going to get bad real quick all over. We have had the second announcement of interest rates going up and we are only in February. The economy is not healthy and businesses are still very shaky. You know things are bad when you see companies that have been around 40 years or longer closing their doors permanently. People are blind or just stupid as they think everything is now all ok. As a business we are making ends meet and not over stretching ourselves as the risks are real.
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