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And there will be NO inflation because this money is largely going to corporations who will figure out ways to maximize ROI -> invest it in the financial market

by bawana 7y ago

And there will be NO inflation because this money is largely going to corporations who will figure out ways to maximize ROI -> invest it in the financial market. So although there might inflation of equity prices (as seen by the recovery of the S&P and other equities), the world is still out of work and starving and without the dollars to drive demand and price increases of goods and services. We need to separate financial money flows (Gross Financial Product?) from the GDP to really know what is going on.

shse 7y ago
Real state prices will explode. That’s what happened after 2009 due to QE.
- k3oni 7y ago
  I have a hard time believing that real estate prices will explode. From what i can see the prices are expected to go down, mostly due to the fact that there's less ppl able to buy due to many being out of work(some for a good while probably as i doubt some jobs/positions will be immediately re-filled). This same thing will cause many to go into foreclosure, this adding new supply to the real estate market. Also banks already tightening credit/loans requirements and availability. All this means larger supply than demand, no reason for real estate to go up. This is all just starting, curious to see what the end of 2020 will bring and start of 2021. Also the market doesn't represent the economy and right now most of the money goes into the market creating a false-positive idea that everything's fine. Just my 2 cents.
  - bawana 7y ago
    Agree. It turns out that jumbo mortgage rates are higher than regular mortgages. Banks cannot find buyers for the jumbos because of the anticipated drop in real estate value from the COVID freeze. No one wants to lend to people who might find themselves underwater on a mortgage. AGAIN.
    - WanderPanda 7y ago
      There is quite a lot of stuff going on here, but I think it can still swing both ways. An adverse effect to the one you mentioned could be the flux of debt / bonds to the central banks and the flux of printed money to the investors. This money is looking to be invested (which happened to find real estate post 2008)

by bawana 7y ago

shse 7y ago

Real state prices will explode. That’s what happened after 2009 due to QE.

k3oni 7y ago
I have a hard time believing that real estate prices will explode. From what i can see the prices are expected to go down, mostly due to the fact that there's less ppl able to buy due to many being out of work(some for a good while probably as i doubt some jobs/positions will be immediately re-filled). This same thing will cause many to go into foreclosure, this adding new supply to the real estate market. Also banks already tightening credit/loans requirements and availability. All this means larger supply than demand, no reason for real estate to go up. This is all just starting, curious to see what the end of 2020 will bring and start of 2021. Also the market doesn't represent the economy and right now most of the money goes into the market creating a false-positive idea that everything's fine. Just my 2 cents.
- bawana 7y ago
  Agree. It turns out that jumbo mortgage rates are higher than regular mortgages. Banks cannot find buyers for the jumbos because of the anticipated drop in real estate value from the COVID freeze. No one wants to lend to people who might find themselves underwater on a mortgage. AGAIN.
  - WanderPanda 7y ago
    There is quite a lot of stuff going on here, but I think it can still swing both ways. An adverse effect to the one you mentioned could be the flux of debt / bonds to the central banks and the flux of printed money to the investors. This money is looking to be invested (which happened to find real estate post 2008)