The Biggest Ponzi in Human History

The comments above & below is an edited and abridged synopsis of an article by Raul Ilargi Meijer

Here’s the story in a nutshell: Ultra low interest rates mark a shift away from people’s wealth in their savings and pension plans, and into so-called wealth in their homes, which are bought with ever growing levels of debt. When interest rates rise, owners will lose that so-called wealth.

It is grand theft auto on an unparalleled scale, and it’s a piece of genius, because while people are being robbed, they actually think they’re winning. But home sales and bubbles are the only things that keep our economies humming.

People need a place to live, and they fall for the scheme hook, line and sinker. Which in a way is a good thing, because the economy would have been dead without that ignorance, but at the same time it’s not, because it’s a temporary relief and the end result will be all the more painful for it.

Whatever Yellen or Draghi decide regarding rates doesn’t matter, this sucker’s going down. This is a global issue. Housing bubbles have been blown not only in the Anglosphere, though they are strong there; many other countries have them as well—France, Germany, Scandinavia and the Netherlands.

Up for discussion: our economies run on housing bubbles; Australia’s housing boom is officially over; homes are being snapped up at the fastest pace in 30 years; US homes have never been more unaffordable; home prices in all US cities grow faster than wages… and then there’s Seattle; renting in the US has never been more unaffordable; and heading toward a mortgage crisis in the Netherlands.