Artificially Low-Interest Rates Led To MASSIVE Malinvestments in The Economy Has The Day of Reckoning Arrived and How Do We Fix It: Sweden house prices plummet – January 11, 2023,
Will global housing prices collapse as consumer prices rise? Years ago, I wrote posts about the Fiat dollar standard vs. the Gold Standard, and in the post, I argued that I prefer the Fiat money; I argued then that money should RIGHTFULLY be valued based on OIL and not gold. a Gold standard is a currency that should be used by people who DO NOT want a BIG GOVERNMENT.
Whether you like it or not, most people on the planet prefer LEFT WING politics and currently, the brand of democracy being promoted is that EVERYONE of legal age should be allowed to vote even if they’re dumb as a box of rocks when it comes to the economy. It’s for this reason that I conclude that no freedom fighter in their right mind should want a GOVERNMENT Gold standard.
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Now, where I agree with the gold-bugs is that I wish the PRIVATE sector were allowed to have its own PRIVATE gold standard, but I look at this the same way left-wingers look at Universal Health care. Left-wingers don’t want there to be a private healthcare market because inevitably, most people, INCLUDING POOR PEOPLE, when given the CHOICE, will dump PUBLIC healthcare and pay money for the SUPERIOR COMPETITIVE private healthcare.
Politicians are mostly STUPID people; even smart politicians have to play stupid to appeal to the idiot voting public who want something for nothing. Once you fully comprehend the argument Socrates was trying to make regarding democracy, you start to see the challenges of the developed world moving forward. The idiots will likely continue to vote for the destruction of their own society, and currently, one of the areas the idiots are destroying in Sweden is the housing market.
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One of the main reasons there are housing bubbles GLOBALLY is NOT only the artificially low-interest rates but also the INCENTIVES for NON-BUSINESS-minded people to get into debt. Fractional reserve banking can exist in the private money markets. Truth be told, runs on banks could also be prevented WITHOUT the government via private bank fee structures that would make it unprofitable for troublemakers to make a profit by creating panic in the marketplace.
With that said, humans are still heavily reliant on central planners, and it’s for this reason that there are so many malinvestments in the marketplace that will likely require a BAILOUT if things get really bad. Will the Swedes bail out their housing market if it crashes? I don’t think it should, but it doesn’t mean it won’t.
When doing some research on the Swedish economy, I noticed that the FEDERAL government has been shrinking for some time now, and a lot of far-left policies in Sweden are happening at the provincial level. How this affects the nation of Sweden is beyond my comprehension; I don’t know the culture, and I don’t know how much Provincial debt exists in Sweden because what people tend to forget about CONSUMER PRICE inflation is that it makes DEBT more expensive.
Even if interest rates stay where they are or even decline, consumer price inflation will make the servicing of EXISTING debt more expensive. Central banks, prior to this global war on fossil fuels, were setting targets for inflation. I had been arguing that because the world was awash in oil, that the global consumer prices were DEFLATING(which was a good thing) under a PETRODOLLAR standard and the only entity fueling consumer price inflation was the government.
However, because we’re on a PETRODOLLAR standard, the moment the far-leftist declared war on fossil fuels(which includes oil), the COST of doing business is now more expensive and will not come down until either the war on fossil fuels ends OR a viable alternative is created and BROUGHT to market. Regarding Sweden housing market, I can’t make any predictions on what will happen because permanent and ongoing debasement of the Swedish Krona is an option for the central planners to save their housing market.
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Destroying the Swedish Krona to save the Swedish housing market might sound ridiculous now, but once you understand that the only way to cure consumer price inflation without ending the war on fossil fuels is AUSTERITY measures, then you start to see why politicians might decide to destroy the Swedish Krona to pay for the failures of big government.
Sweden is facing its ‘day of reckoning’ as house prices plummet | cnbc.com
Interesting times ahead!