And How It Could Affect You
When people are selling their used cars for more than they originally paid, everyone from your high school is flocking to get their real estate license, and artists are selling JPEGs for tens of millions of dollars, something is very wrong.
There is an obvious disconnect between the “real economy” (wages, cost of living, real estate) and the “financial economy” (stock markets, anything speculative in nature). And the longer this gap persists, the worse the crash will be.
Dominos are Starting to fall in other countries
We live in a highly interconnected world, where semiconductors shortages in Taiwan can lead to vehicle shortages in the United States. With supply chains spanning multiple continents, every developed country relies upon several others for resource extraction, transportation, manufacturing, and economic stability.
Argentina is (yet again) experiencing unprecedented inflation at 55.1% for the year.
We all know the seriousness of the current Russia/Ukraine conflict. After a collapse of the ruble, the invading country recently defaulted on all its foreign debt.
China has been unusually quiet in the past few months (probably because the Ukrainian conflict has overshadowed everything). Still, we are witnessing cracks in their foundation through the failures of real estate giants Evergrande and Sinic Holdings.
Speaking of collapsing real estate companies:
Housing is out of control
Mortgage payments and rent are the largest expense for most people, around 27% of the average American’s income.
For a country already living paycheck to paycheck, if the housing market crashes while interest rates go up, millions will be evicted from…