Those of us who understood the dangers of zero percent interest rates saw a hard landing coming a long time ago. It’s nice to see the mainstream media belatedly acknowledge the idea that the wealth effect is not so pleasant when it slams into reverse.
With real estate as a share of disposable income at more than 560 per cent, reaching an all-time high in the first quarter of 2022, consumers’ sensitivity to a pullback in the housing market is likely to be heightened. As a result, the hit to consumption (and, thus, GDP) from falling residential real estate prices via the wealth effect is likely to be magnified, thus ensuring the imminent recession is neither short nor shallow.
It seems that every utterance coming from governments or government entities of any kind (including the bought and paid for “mainstream” media) are all lies. Constantly. That is until reality can no longer be denied….then they point the finger of blame at anybody and anything other than their own bloody stupidity.
Duh!
.
This will likely be a multi year recession. The only thing that will pull us out is new leadership in the white house and 24 Sussex. I just hope boomers get it good and hard but they won’t as usual.
Mummy and Daddy issues.
I am thoroughly pleased to be firmly ensconced in your tiny little brain, rent free.
Because, as a dreaded boomer, I am entitled to free things.
And just to reassure you: my finances are just fine, thanks. That’s because I worked for a living for well over 40 years, and behaved (mostly) like a responsible adult. Consequences, eh?
So everything is going as planned.
I recall “the experts” insisting we were living through a period of permanent ZERO interest rates … and that the rates simply COULDN’T rise … EVER again. No. Seriously. I read a number of articles that made the very assertion.