Fed Warns of Housing Bubble...by LYNETTE ZANG
do yourself a favor you gotta have a plan the behavior that we're seeing with this housing market suggests that a bubble might be brewing and that it will eventually pop if you don't have a plan you're really planning to fail this is not going away it's going to get worse [Music] the fed just published a very dire warning for the public and that's what we're going to talk about today coming up [Music] i'm lynette zhang chief market analyst here at itm trading a full service physical gold and silver dealer and the fed just issued a warning about real estate now considering that real estate is roughly 30 percent of the global economy and they've worked real hard those global central bankers to reflate that bubble after it popped in 2008 interesting that they would talk now about a housing bubble but let's take a look and see what they're saying because really the question is they've they're raising rates to combat the inflation that they created to destroy demand i mean inflation is a lot of money chasing too few goods and with the central banks it's pretty bad but we know how much money they've just been creating and creating and creating poor edgar he's always got to deal with this gun now but it's true and it just makes the point so here is that report from the federal reserve bank of dallas real time market monitoring finds signs of brewing us housing bubble i you know one of the things that i always love is how they never ever ever accept responsibility for the manipulations and then the subsequent unintended consequences that come from that but they say our evidence points to abnormal u.s housing market behavior for the first time oh my god since the boom of the early 2000s which they created as well they also say they do in this article admit that easy money policies have led to higher house prices may have fueled a fear of missing out wave of exuberance involving new investors who's going to be most hurt and more aggressive speculation among existing investors shocker you've had interest rates anchored at zero while you've been pumping as much money as you possibly could into the system why in the world would any of the real estate behavior and the prices that are so unaffordable for most people anyway locking in those over valuations and now they're popping the bubble and they don't really have at least initially they don't really have any choice so it's going to be very interesting to see when all of this turns around but let's just stay on on housing for now reasons for concern are clear in certain economic indicators the price to rent ratio shocker and the price to income ratio also big shocker and this is happening on a global basis it's quite simple people cannot afford the rent and you know world economic forum you will own nothing and be happy and and have the experience well if you don't own your home even if you have a mortgage as long as it's a fixed fixed-rate mortgage you know what those mortgage payments are going to be every month month after month but when you're renting yeah that's a different deal and guess what if you own nothing well that means you're renting everything that doesn't work very well the us is not alone in experiencing this hot this housing market i mean this is such new news isn't it i mean what are they talking about a bubble you can tell it annoys me so much when they come out way after the fact and they go oops we might have a little bubble here okay let's take a look at that a little bit on a global basis this is back in 1979 and there's 2008 you think all of this money printing with interest rates down at zero might have possibly no no that could not have nearly led to a housing bubble additionally we have a lot of new entrants into this market so when they're talking about speculation we certainly know that a lot of what's happening in real estate well you know big corporations can borrow money for almost zero now that is changing now but basically since 2008 at zero anchored at zero and then what's happening with them well then they build these behemoths they build this real estate and either they lease it out well actually they may lease it out and generate income but they take any of the debt and they securitize it in other words turn it into a financial product and sell it to you for your i don't know where would you oh how about your retirement plan we're going to be talking about that next week by the way because we gotta talk about what's going on there but here it begins do you remember a while ago and and i've mentioned this a number of times that one of the goals was to have all assets held on a token so and then broken down into little itty bitty pieces so that it was easy to spend okay well here's the forerunner of it there is now a credit card and if you don't make a payment you miss a payment well that's okay they'll just pull it from your home equity good now for those that do actually own their own home they can use the equity in it of course it has to be high like we've just seen what happens if this bubble bursts and the equity evaporates oh that couldn't could it could that happen but remember we're told you will own nothing and be happy but you will be ruled by those that own everything because wealth never disappears it merely shifts location that my friends is the importance of gold of having sound money that holds its purchasing power value because this most likely i mean obviously i mean i do have some crystal balls but they don't really tell me very much however as this housing market burst this bubble bursts you or real estate not just housing real estate you want to be in a position to take advantage of it like the wealthy have 2008 there was a massive transfer of wealth in real estate from the individuals to the corporations well corporations are doing all of this on debt and the debt bubble has already popped now it's they're trying to moderate how that whole thing is imploding but the big long debt debt uh boom is over because you know we've been anchored at zero since 2008 and here is that surge and because of that surge in mortgage interest rates total mortgage demand which would include refinancing which have virtually dried up but total mortgage demand plummets 41 percent year over year based on these rising rates or because of these rising rates is a better way to put it now do you think that might have an impact on prices because people want to think that this can go on forever but it can't nothing a tree does not grow through the sky everything that goes up must come down and now even some sellers are lowering their asking prices not a lot yet because people don't want to believe that this game is over but they're going to know it pretty quick about 12 of homes for sale had a price drop during the four weeks ending april 3rd that's up from nine percent a year ago so more price drops the number of new listings last week jumped eight percent from a year ago this follows four straight weeks of annual declines in new listings so as the housing prices were going up fewer people were wanting to sell because they want to get the most out of the real estate that they can and plus the fact that if they sell it they've got to replace it at that really high rate as well so that had been new listings had been declining now that the interest rates are rising well the number of new listings last week jumped just like we've seen in ipos on the stock market when there was a threat of them of the markets falling apart before that happened they want to get that out there so that they can capture the most money possible for those suckers that don't realize what's happening but you're watching you realize what's happening i don't hate real estate but i do hate it at these price levels you got to have a place to live but you don't have to speculate in it you'll be able to buy it a whole lot cheaper buyers are sweating because the average rate on the 30-year fixed mortgage surpassed five percent so as these interest rates go up so do your mortgage payments and if the mortgage i mean that's why that's a big reason why we could see real estate prices going up with interest and debt and lots of debt issued with interest rates anchored at zero because you weren't having to pay that interest that hefty interest but that's changed my first house i'll never forget it see i got married in so long ago it's hard for me to remember but i got i got married i think in 77 and we bought our first house in i want to say 79 or 80 and it was 12 percent okay that's going to inhibit the rise in prices on real estate as interest rates go up and the problem is pessimism if consumer pessimism toward home buying conditions continues the recent mortgage rate increases are sustained then we expect to see an even greater cooling of the housing market than previously forecast from fannie mae so for those people that were wondering that were thinking about selling if you haven't done it already you might want to consider doing it now before the general public realizes what's happening that sounds awful and it really does and i hate that but you know what's going on it's all about educated choices and i want to show you you know because in china i mean just this big huge boom big huge boom then boom the government clamped down on mortgages and on real estate because they wanted to try and control what was happening and what they did was they created this huge slump and i'd like to point out easing measures so now they've done it about phase but easing measures have failed to arrest a decline in sales i mean do they think that we are just these puppets and they go boop and you're gonna move this way and boop you're gonna move the other way because that works for a while it's called perception management but at some point it doesn't work anymore and we are at that point i believe that we are at the point where it simply isn't going to work anymore and policy errors are hard to reverse when they're this big and as you know is the fed making policy errors many believe so and i'm one of them and here's another big thing and you need to be aware of this these are the mortgage-backed securities that the federal reserve has bought and i'd like you to notice that that bot that buying started in 2009 to reflate that burst bubble and now they're talking about reversing it and allowing that balance sheet to run off it's not going to have any big effect fed officials to take cleaver to balance sheet many back big rate hikes can they do it no they can't do they have to do it yes they do do you see the circumstance all this time i've been saying turn between a rock and a hard place and you know and here's the thing can they tamp down this inflation in my opinion no in my opinion even though i don't have all of the technical confirmation the inflation genie is out of the bottle people are losing confidence in those controlling it so the central banks and the governments and i you know i'm sure we've started the hyperinflation i hope i'm wrong but i don't think i am but i hope i am i honestly do because this was the air in that bubble and now they're talking about letting the air out of that bubble big time the policy rule for every segment of the population we don't have one for every industry we have one it's called the interest rate that that function that's really it so it's a very brute force kind of hammer that we use on the economy and of course when you kind of have to use a brute force tool sometimes there's some collateral damage that happened an important voice at the federal reserve christopher waller he's a research acts out of saint louis with some real real abilities i will be clear when he speaks experts lean forward and listen carefully there on the hammer of the moment so as much talk as there are about all of these tools that they have that they never really explain because they're creating all these new things on the fly just because like the dutch boy with poking his fingers in the hole as the dam is bursting well you got ten fingers so once you have all of those okay maybe you can even somehow use your toes but this damn is bursting make no mistake of it and we're going to talk more about that as we move through this whole cycle but make no mistake they have one tool that's interest rates their balance sheet is at nosebleed levels the interest rates they need to ratchet it up so that they can lower them down are we headed for a recession well worse look this next piece has got to be a hyperinflationary depression because there they have no more tools and the new currency that they want to take us into is still going to be based upon debt so they have to burn all of this debt off they have to there's really no choice about it and when we go into that phase like we saw in 2020 rent moratoriums mortgage moratoriums so here this is a measure that is going through uh lawmakers across the u.s are looking to enact rent control reviving measures largely shunned in recent recent years in an effort to curb the surge in home rental prices i mean who is going to get hurt by that we'll talk about that large cities like boston affluent sub suburbs like montclair new jersey lower income mobile home communities in colorado and fast-growing metros in florida are among the places now considering rent control rents are exploding at a pace faster than income shocker the problem is now as bad as it has ever been and probably much worse yeah you think so if you are one of those people that have been buying real estate for income it kind of depends on what you paid for it and when you bought it the fear of missing out how far can the real estate market drop i don't know i can tell you in japan that it dropped residential dropped 85 and commercial dropped 95 and it still hasn't recovered from it and that was back in the 90s how low can it go i don't know but you better if you're holding it you better make sure that you have the ability to boom pay off that mortgage because it does make it a lot easier to service and maintain your real estate so you got to have gold in order to do that because that's the only undervalued asset the only one gold and silver physical and you need to make sure that you can always pay those property taxes the insurance all of that and that's also where gold comes in these are the things these are the dangers of owning real estate and where did you buy it did you buy it somewhere near a high you better just make sure that your butt is covered oh i don't know if i'm supposed to say that but anyway because it won't be the owners the real estate owners that are going to benefit from this so gold holds steady as investors waive fed comments inflation risk but what does the biz say gold bullion is the only case of a financial asset with no counterparty liability everything else we're talking about today that's all debt that's all counterparty liability that means that if your counterparty fails it's a contract right if your counterparty fails what happens to you so that's where gold really comes in and and a big part of it is that's why gold is a safe haven asset but what i love here is the prospects of higher interest rates are capping gains on the non-interest bearing metal ew why in the world would you want to hold this it doesn't pay you any interest it maintains my purchasing power it's the safest thing that you can possibly do according to everybody that's in power it doesn't have to pay interest it doesn't run any risk that's why gold doesn't pay interest and has the broadest base of buyer so you've got your demand covered it's always so annoying because what do you think can happen to government bonds oh look at this in sri lanka default looms as debt payments halted to save dollars really for food for energy for the public so if you were holding a siri lankan bond which if you've got some of those etfs or msci on emerging markets etc you probably do let's see it's down to 46 cents on the dollar it's lost more than 50 of its current market value at least at the moment that this snapshot was taken what do you want to hold you want to hold government debt that they are destroying through inflation even if it doesn't do what you're looking at on the screen even if you hold it to maturity and they pay you back in funny money that has no value where do you want to hold something that's all value that has the broadest base of buyers on a global basis doesn't need a government to say this is money and it's why central banks have been accumulating it i think that we are definitely we're more than beyond between a rock and a hard place we are in a position that is untenable they have to raise rates in order to be able to lower them again that's why they have to raise rates and to maintain their credibility oh the fed's gonna fight this inflation oh this nasty thing that they created give me a break would you please love to sit down and have a conversation with jay powell with janet yellen with ben bernanke with alan greenspan my mother used to say don't you think he's smarter than you lynn don't you think he's smarter and i used to say i really hope he is because he has a whole lot more influence than i do but if he actually believes the garbage coming out of his mouth then no he is not smarter than me but he is a whole lot more dangerous and these central bankers they're dangerous you have to protect yourself it's the only way food water energy security barter ability wealth preservation community and shelter you have to be as independent and self-sufficient as you can possibly be to survive this mess and community is key because we all bring different different skill sets and different things to the table so maybe you have what i lack and i have what you lack and look at this together we're a whole it takes it's going to take a community to get through this if you have any variable rate debt get it paid off asap [Music] because if you think what's been these spiking rates have been bad so far you ain't seen nothing yet and i want you to be safe and because of that i actually have oops i can't see it because i've got all the belts in front of it here we go i need a vacation i'm going to be honest with you so i'm going to hawaii with my family in june and i'm going to take the first day of my vacation for a very small small group of people and you're invited to join us and where are we going oh the grand waialea the green wall graham wiley the link is below and i'm going to be talking about things that i don't talk about or can't talk about on air so it's a small intimate gathering we'll go over what's going on at that moment but really we're going to have some deep conversations so i hope you can join us because again it's really super limited seating so that you have a lot of one-on-one time and it's just a small group of people now make sure that you watch my backyard pond tour on the beyond gold and silver channel and the video is out now and it features my very dear friend who just recently passed i'm so sad about this because i really loved him i mean he hand built my my backyard pond one stone at a time that he picked out and he also refurbished all of my other ponds on the property so that's my water element and i'm so glad that we captured this when we did so this is my tribute to ernie and he is really missed he's really missed excuse me don't forget that we have podcasts on all major podcast platforms so listen to it while you're walking and you're doing whatever else you want to do and you can't watch but if you have not already started your gold and silver strategy just click that calendly link below and have a conversation with one of our consultants because honestly do yourself a favor you gotta have a plan if you don't have a plan you're really planning to fail this is not going away it's going to get worse so if you like this please give us a thumbs up make sure you leave a comment and make sure that you share this is a really important video for most people who think oh okay well i'll do real estate because after all what do they tell you real estate always outpaces inflation until you go into hyperinflation and a currency reset and you know it's really interesting because i may not know everything about a lot of things right i mean i don't but what i do know are currency life cycle shifts i've been studying them since 1987.
and i don't know anybody else that has and if you listen to ben bernanke or any of the other central bankers boy do i disagree with their analysis like so much and i'd love to sit down and have a conversation but that's not likely to happen either unless maybe it's an interrogation room god forbid boy boy at any rate as always i really you know it's time to cover your assets all of your assets and here we use the wealth shield and it's a strategy that will serve you well during this transition so until next we meet please be safe out there bye [Music] you
2022-04-15 17:54
