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Central Banking is Going to Get Stronger

Yes, finance is in a mess. And it's not heading for a crash, but increasing power. 

There will be a great recession by 2026. Mortgages again, a banks biggest asset by far. Get ready for it now with sensible planning and you will be fine. Get greedy and put your family on the line. 

I don't want a big recession like this, it will be horrible. I'm merely pointing at it. It's all priced in. We did it. It belongs to you and I. We own it. You cannot take more out of the economy than you put in, in this universe. 

This time, different to 2008, 1990 & 1972 I'm expecting government across the spectrum to instruct banks to bail out ALL defaulting mortgagors, much like a furlough on steroids. Instead of just the privileged. There will be a lot of repos going on, tens of millions. 

The fiscal change this time will be that taxation becomes irrelevant except for 'incentivising' spending behaviour. Taxation will no longer be used to fund the state nor required. The banks will grow as the state needs to create money to spend on what it sees fit. We saw this clearly work, though I don't think deliberately, during the pandemic. But we now know, it works, and does not collapse directly.

And where will all this extra spending fall in the end? Real Estate! House prices. Property value. How come? Any publicly paid for subsidy on location values, adds to the price. Or the rental value of those locations, which when market cap'ed commands a higher selling price. 

Likewise, the opposite - a tax on locations would reduce the rent and capitalised selling price for the same but opposite reason. Lets hope that never happens - a tax on land, no way, there would be civil war. This is why a tax on land values has always been the most hated of all taxes. Not because wealth and power are evil robbers. But because The People are.

So just because the global central banking model is a hopeless mess, does not mean it will collapse. After all, money is just an index of the value of the costs of production, in work and capital, for all goods and services. Inflation just makes it better or worse for the tenant, saver, creditor or debtor. It's all relative. The trick is to stop believing money is wealth or a commodity. Even Bitcoin. 

To ride this storm out is a matter attitude. Keep blaming wealth and power, even if justified, and you will be putting your household in serious danger. You. Face the dragon. And plan to secure your household and business by not getting greedy and not gambling in get rich quick schemes of hopium.

Remember. This is your family you are playing the game with. Change your attitude and secure them.