Here is part of an informative interview with economist Michael Hudson:
... by now, 14 years after the Obama bailouts and QE rescue of insolvent banks, a new condition has emerged: a vast sum of private capital seeking to move out of the financial markets. Many of the most astute One Percent is taking their money and running – into private equity and real estate.
The result is that housing prices are soaring as private capital is out-bidding owner-occupant home buyers. While the latter face rising mortgage-interest rates, private capital finds the likelihood for both current rental income and capital gains to be a much better bet than the stock and bond market. The result will not be a decline in real estate prices, but a decline in home-ownership rates as a shift to rental housing occurs. The financial class is becoming the new absentee landlord class.
Lower stock prices will spur a similar private-capital wave of corporate takeovers, posturing as “rescuers” of the economy. The aim will be short-term asset stripping, of course (that is the business plan of private equity), but it will consolidate ownership in the hands of a financial elite. And to the extent that state and local budgets suffer from the downturn, sell-offs of public land and infrastructure also will transfer property and its rent-extracting opportunities into hands – not with borrowed credit but for all-cash, the cash that QE policy and tax favoritism has brought into being in the past 14 years.
So, to the extent that there are bankruptcies, this will have the usual result: consolidation and concentration of wealth ownership. The non-financial economy’s structure is being transformed – under the slogan of individualistic free markets.
You can read the rest @
https://www.unz.com/mhudson/the-saker-interviews-michael-hudson-3/
Oh boy, that really does not sound good.
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