A collapsing international order and its effect on asset prices

Where is all this cash coming from?

Despite higher mortgage rates it is becoming clear that there are secular changes occurring in the domestic housing market. Since late 2015, I have been claiming that housing in the United States was a relative bargain. I had been recommending that the institutions continue buying up as much as possible, since the IRRs and cap rates made sense; especially when we didn’t even include price appreciation in the mix. I have corresponded with several of these people over the past decade and know they do read my words.

I suspect much of the cash that is flooding into the housing market is coming from two sources.

One; as the dollar loses its allure in the international markets, foreigners are trying to unload as many of these dollars as possible and housing in the United States and elsewhere is a great way to dispose of relatively large amounts of cash.

Foreigners are observing the promulgation of far-left Marxist policies with its concomitant ballooning of deficit spending in the states and are feeling a sudden sense of urgency to unload their hoard of dollars.

Don’t look to the past to determine the future; terminal economic policies such as QE, multiculturalism, and an “irrational” weaponized dollar regime preclude this from ever happening.

Two; I suspect that much of this money is coming from the large institutions that are controlled by the banking families such as Rothschild, and these forces are under orders to do what they’re doing for a future outcome. When I began advising readers to buy as many single-family properties as possible, the house price to household income multiple was about 2.5x. In the past 7 to 8 years this ratio has risen to 4.5x. Based on the trends I am observing, I am predicting that this multiple will hit 6.0x going out another 5 years or so. Despite this relatively lofty multiple, domestic house prices will still be cheaper than anywhere else in the developed world.

The effects of a collapsing international order; inflation, higher asset prices, and salaries that can’t keep up

The effects of a dollar losing its global status hits home in three (four) primary forms.

First, the cost of living begins to creep higher and will continue above trend. It’s becoming rather obvious that the cost of living is now rising much higher than even the government data.

While the realignment of the global supply chain post-covid may be deflationary in China, it could be inflationary in the West. This especially holds true to the United States as it exported much of its monetary inflation pressures to China over the past 40 years. These trends are now reversing, so I don’t look to see how the deflationary pressures in China will be coming to the United States.

Second, wage earners and those relying on a salary will continue to fall further behind as employers will continue to rely on publicly released price data when granting COLAs. Unfortunately, I do not know of anyone whose salaries are rising as quickly as the public price data.

Third, all other things being equal, asset prices will continue to rise across the board, regardless of how they’re measured to determine fair value. I suspect that stock prices here will continue to move higher as the dollar continues to lose its attractive qualities. Moreover, as the dollar continues to lose its shine due to liberal spending policies and the force feeding of multiculturalism, house price multiples will continue to rise as they have been for the past 10 to 15 years.

Fourth; A citizenry with a lowered cognitive capacity. This factor is more of a cause of the dollar’s demise rather than an effect. I am trying to be objective here, but it seems that the average consumer has become much more cognitively dulled over the past five to 10 years. I have several theories as to why this is the case, but I am no longer able to have any decent conversation with even so-called educated people regarding any subject matter. This sad state will only accelerate the process as these people are no longer able to make rational financial choices, while making self-destructive personal decisions.

As I have been warning for years, the world has been set up with no viable alternative to the greenback as of yet. Thus, the entire fiat currency regime is collapsing and we are stuck with all of its ramifications. We can only speculate what the outcome will be as we drift toward the Great Reset.

With this in mind I include an article from Business Insider, which discusses the effects of cash in the housing market. I know first hand how cash has become a force to reckon with. All of my purchases from the past five years have been all cash deals, as I know this is the only way to get the deal done. Even with cash, be prepared to pay full market value or close to it; you’re out there competing with the large institutions who have a different set of objectives.


All-cash homebuyers are becoming ‘disruptive’ to the housing market
  • A third of all homebuyers are paying cash, the highest share in a decade, Redfin found.
  • New home listings are down 25% year over year, resulting in more feverish competition.
  • Cash bids may carry even more weight as banks tighten credit on borrowers.

During the pandemic housing boom, homebuyers begrudgingly accepted that they’d face lots of competition, especially from people wowing sellers with suitcases of cash.

Many facets of the housing market have changed since then. As for the cash buyers who can pay in full without taking out a mortgage, their power has only increased.

In April, cash buyers commanded the biggest share of the shrinking home sales market in nearly a decade. As the spring selling season got underway, people who needed financing were often foiled by rising interest rates, Redfin reported this week. Cash buyers represented 33.4% of transactions in April, far above levels hovering around 25% for most of the past decade.

The data is the latest sign that cash buyers are clashing with borrowers more than ever. The problem has gotten worse because the drop in available homes is exceeding the slowdown in demand, according to Redfin.

On Thursday, Redfin reported that a 25% drop in new listings has pushed down the total number of homes on the market by 5% year over year — the lowest levels for early June since it began collecting the data in 2015.

The result: Some homebuyers are dropping out of the market even if they could stomach the borrowing costs.

“Cash offers used to be an occasional nuisance and now they’re becoming disruptive” to the market, said Debra Shultz, a vice president of mortgage lending at CrossCountry Mortgage.

Shultz, who is based in New York City, told Insider about one potential borrower who made offers on many different properties over a period of a few months. At each turn, he lost them either because he’d been outbid or because the seller went with a cash offer, she said.

“His last email to me was ‘I think I’m done with this market,'” she said. The customer vented some more: “People are offering 20% above and all cash?!?”

Shultz is battling the perception that the cash offer is always king. As long as the buyer is well-qualified and can assure the seller of a quick close, there should be no difference in the quality of that bid to a cash bid, she said.

In general, that’s true, said Deanna Kory, a broker with the Corcoran Group in Manhattan. In New York City, sellers are typically accepting buyers who are clearly qualified for a loan as often as they accept cash buyers, she said.

From a seller’s perspective, “the cash buyers are thrown in with the pool of people financing, and they have maybe an ever-so-slight edge,” said Kory, who said a cash bid made some difference in one of her two most recent sales in Manhattan. In May, about half of all Corcoran’s Manhattan sales were cash, which is elevated, she said.

Original article listed here: https://www.businessinsider.com/all-cash-homebuyers-disrupting-housing-market-2023-6?amp

Related Posts

15 thoughts on “A collapsing international order and its effect on asset prices

  1. I received an email from a reader who indicated to me that he was no longer interested in purchasing a franchise after he exercised his due diligence. Although franchises can be a profitable way for people with large amounts of money to park cash and own a business, I largely agree with this reader that most people are not suited for this endeavor as he discovered how easily it was for the franchisors to punish franchisees.

    Thus, he thought outside the box and obtained his own business. Below is the excerpt of his email describing the transaction and his plans on how it will be run.

    I think he made a smart choice, especially given his realistic expectations and understanding of what we know. I like what he’s doing as he purchases bona fide assets (real and personal), runs a business based on cash, he can use many of these undocumented aliens and pay them pennies on the dollar for their work, has a wide latitude in the discretion of his businesses affairs, and depending on how he gets involved personally, he can get a big chunk of his purchase price back over the next few years.

    Anyway, below is what he wrote….

    Anyway, I have a landscaping business under contract for 1.6M. I’m getting an SBA loan with 10% down. It comes with 300K in land (to park the vehicles) and the land could be developed down the road or sold off as R/E development land. It also has 300K in equipment. It’s clearing just over 500K a year so after loan servicing costs I should pull 300K without growing the business which I plan to do.

    As you would expect there are a lot of undocumented folk in the landscaping business that I will need to contend with.

    Its not a perfect business but at least I’ll be free of corporate America.

    I’d appreciate any thoughts you have.
    I say it sounds like a good plan. If the country burns down in a few years, at least you can get a lot of your money back. I think the purchase price is very reasonable, and that’s because these service businesses are not very liquid. Any determined seller of these types of businesses usually needs to discount its fair value in order to unload it.

  2. This is a story right out of the Pentagram’s Ministry of Truth.

    I often think of the proverb, the wicked flea when none pursue, when it comes to these types of people. Nobody’s after them. Let the heathen rage.

    The irony about using the word “genocide” in this instance is that those who are supposed members of the LGBTQ community are themselves committing genocide as they’re not likely to have any children.

    ‘Genocidal’: Transgender people begin to flee states with anti-LGBTQ laws

    Laws restricting gender-affirming care have prompted some families to move.


    1. An extremely knowledgeable student of the New World Order who didn’t help the cause. I recall when the Unabomber was forcing the New York TIMES and Boston Globe to post his writings, lest he go out and kill more people. Both papers did not want to post them, because what Ted Kaczynski was saying was largely correct and the owners of these papers didn’t want the people reading it.

      For the majority of people I have come across who have stumbled upon the objectives of the New World Order, they usually become devout Christians. A few of them go off the rails like Ted.

  3. Knowing that the Federal Reserve created the very problem it is now trying to solve, I am betting against them being successful with subduing inflation without further destroying the common man. Done on purpose by a group of “John 8:44s”.

    The covid crisis was a panopticon built with false dilemmas that were created to accelerate the timeline to the force majeure and the Great Reset.

    Fed Is First to Reach Crucial Junction in Global Inflation Fight
    2 hours ago

    (Bloomberg) — The world’s major central banks are approaching a critical juncture in their fight against inflation, with the route they ultimately choose set to impact the economy for years to come.

    Their choice is between trusting that the most aggressive tightening in four decades will be enough to damp price pressures that have only just started to ease, or to keep going to insure against concerns that 2% inflation targets are a thing of the past.

    Over the next two weeks, the Federal Reserve, European Central Bank and Bank of England must decide how much further they need to push, with the former potentially closest to peak rates. The Bank of Japan also meets amid ongoing speculation it’s approaching the point where it’ll begin to remove stimulus.

    Decisions this past week underscored the ongoing battle to tame prices. The Reserve Bank of Australia surprised investors for a second month with another hike and warned its desire to preserve job gains doesn’t mean it’ll tolerate prolonged price pressures. The Bank of Canada, on pause since January, resumed tightening and said the economy is running too hot to bring inflation back to target.

    The surprise hikes from Australia and Canada spurred traders to boost expectations for further monetary tightening. Bond investors are responding to that shift by anticipating a greater chance that central banks push their economies toward recession. Yield curve inversions deepened, with yield curves flattening across the US, Germany, UK and Canada.

    Complicating central banks’ assessment is the fact that the pass-through of interest-rate increases is playing out differently this time around. Labor markets remain strong as businesses cling to workers amid fears they may not be able to rehire them when needed. And pent-up pandemic savings continue to underpin consumer demand.

    None of the choices policymakers have is risk-free.

    Pausing or halting hikes and relying on the transmission process may be the safest path to the soft landing everyone wants to achieve. But it also threatens a repeat of the stop-go policies that badly scarred the US in the 1970s if it turns out that more tightening is needed later on.

    Moreover, such an approach can entrench inflation expectations, boost wage growth and the housing market — all of which is vexing the RBA’s Philip Lowe right now.

    The alternative — continued tightening — is the surer path to defeating inflation, but may wreak havoc on the economy along the way and push the global financial system into a tailspin.

    On top of the decisions themselves is the communication challenge: Any pause risks re-igniting animal spirits and fueling already-bullish equity markets, as would a hike that’s accompanied by any hint that this is the end of the tightening road.

    Federal Reserve

    Going into the Fed meeting on June 13-14, central bank leadership has signaled that it prefers to take a break from a credit-tightening campaign that’s seen interest rates rise five percentage points over the last 14 months.

    One big uncertainty that Chair Jerome Powell and his colleagues are monitoring: How much will banks pull back on their loans to companies and consumers in the wake of the recent failure of several regional lenders.

    But with inflation proving sticky, policymakers have also been at pains to stress that they’re far from declaring mission accomplished in their drive to bring price pressures to heel.

    “A decision to hold our policy rate constant at a coming meeting should not be interpreted to mean that we have reached the peak rate for this cycle,” Fed Governor Philip Jefferson, who’s been nominated to be vice chair, said in May 31 speech in Washington.

    European Central Bank

    In the euro zone, a quarter-point hike is all but guaranteed when the ECB announces its decision one day later on June 15, with attention focused on policymakers’ public debate over when and where rates will peak.

    A bigger-than-expected slowdown in inflation last month and retreating expectations, along with more restrictive credit conditions, will likely embolden those preferring to stop tightening in July — exactly one year after liftoff. That would leave the deposit rate at 3.75%.

    But another rate increase in September isn’t entirely off the table, not least as far as some of the Governing Council’s more hawkish members are concerned.

    President Christine Lagarde herself told European lawmakers this week that price pressures remain too strong.

    “Although some are showing signs of moderation, there is no clear evidence that underlying inflation has peaked,” she said.

    Bank of England

    The policy dilemma is perhaps most stark for the Bank of England. On the one hand, inflation is higher, at 8.7%, and tightness in the labor market makes a dreaded wage-price spiral an ever-present threat. On the other, the International Monetary Fund forecasts the UK to grow just 0.4% this year.

    Interest rates are already squeezing the economy at 4.5% and markets expect them to top 5%. A quarter point hike is nailed on for June 22.

    Howard Davies, chair of NatWest Group and former BOE deputy governor, says policy takes about 18 months to feed through. “We are now entering the period where tightening starts to be felt.”

    For the moment, though, the overriding concern is credibility. Politicians have attacked the BOE for missing the inflation threat and a second failure would be considered almost unforgivable.

    Bank of Japan

    With inflation above its 2% target for more than a year now, the BOJ may be finally getting closer to inching away from its emergency policy settings, according to some economists.

    No major shift is anticipated when officials meet on June 16, though economists including those at Goldman Sachs and BNP Paribas expect the BOJ to tighten policy next month — even as Governor Kazuo Ueda has insisted that he sees no immediate need to change course.

    He argues that — after years of deflation — the cost of making premature policy adjustments is larger than that of waiting. Workers’ real wages are still declining, weighing on consumer spending power so urgently needed to sustain inflation at 2%.

    Still, any movement away from the BOJ’s ultra easy policies will be less disruptive if they happen when other big global central banks are still tightening, meaning the door may close on Ueda if he waits too long.

    –With assistance from Toru Fujioka and Garfield Reynolds.

    ©2023 Bloomberg L.P.

  4. CJ, I am qualified to comment on the general public, because I observe it, or them. I don’t put my face in a screen when in public places. I watch people. Some show signs of thinking they are in a video game and not in kinetic, material reality. Their slovenliness is one sign. Their degraded physiques is another. They are distracted and impatient, as if material people are impeding them.

    Recently a Starbuck’s opened in my little town that is too close to the interstate. I note that the menu lists these higher end drinks ($5-$10), and basic coffee is in fine print at the bottom. These obese cattle come in and order these pink and blue fru fru drinks and they always pay with plastic. So these cattle are paying 2-3% markup by not using cash. This is inflationary and degrades the value of the USD.

    Yes, this is cognitive dulling. I observe that this new thing on the internet, Tik Tok, is gaining. These 30 second vids are endless in number and one could get carried away by them. You can see kill shots, ass, auto accidents, trees falling, moose fights, floods, lightning strikes, anything you want. It will reduce the average attention span further, from 15 seconds where it is now, to 3 seconds. These people will be useless as problem solvers and easily taken prisoner.

    Really, these people will be culled.

    1. I didn’t know Moose fight only heard of them tussling with O.PP. cars on darked highways in Northern Ontario and Newfoundland. Wonderbar.

    2. With those pink and blue drinks, Starbucks is targeting children – getting them hooked on sugary drinks. Probably as bad as giving your kids Mountain Dew – which probably would be frowned upon if we saw a parent doing that, but if it comes in Starbucks cup, it’s cool and hip.
      I teach piano and my colleague and I noticed that most of our students don’t practice, don’t want to put in the work and come to the lesson unprepared. Because practice is tedious and not exciting, for children and their parents. So we accept that we must show them how to work on something hard for 30 minutes once a week and that the kid will likely stay at level 1 for years.

      1. It is just not Starbucks targeting children to get hooked on sugary drinks, and not just children, the whole Western population is targeted with processed sugary junk foods and fructose loaded beverages.

        Are these foods evil and bad?…

        No, no all the time. We crave them and there are good reasons for it.

        Sugary, fructose loaded foods in a starving situations may make you pile on the pounds and survive and they are meant for that, as rare but energetic alternatives to nothing to eat, or… as occasional and pleasurable treats to have in times of plenty.

        Nothing wrong with that.

        But in the modern world they are the only legal feel good drug, some slow killing and retarding poisons, no problems to buy then anywhere or problems with the authorities to make you any sugar control when you work or drive to ban you from the roads or loose your job.

        The results of these policies?…

        People of all ages and backgrounds falling to this junk foods like fruit flies. There are not any other “legal” alternatives.

        However, the reality seems to be that addiction to sugar and fructose “fries” the brain and provokes dementia and Alzheimer at older ages.



        Sugary Foods May Be Driving Alzheimer’s, Study Suggests

        by Liz Neporent February 20, 2023 at 11:05 AM UTC

        Clinical Relevance: A diet high in processed and sugary foods may be linked to a higher risk of Alzheimer’s disease.

        A new study theorizes that high fructose consumption may be a prime cause of Alzheimer’s.

        Fructose, a simple sugar, can trigger a neural activity that leads to a foraging response that was important for survival but does not turn off in a modern world full of junk food.

        Recurrent fructose metabolism might lead to progressive brain changes seen in the development of Alzheimer’s disease.

        An American Journal of Clinical Nutrition paper ties together research explaining how fructose was essential for our ancestors’ survival with studies that show why this simple sugar is bad for the brain and may be a prime driver of Alzheimer’s disease.

        Some fructose occurs naturally in the brain, but it is also found in fruit, some vegetables, and honey. In the modern world, it is a basic component in table sugar, while high fructose corn syrup is a frequent additive used to sweeten processed foods and beverages.

        “We make the case that Alzheimer’s disease is driven by diet,” said the study’s lead author Richard Johnson, MD, professor at the University of Colorado School of Medicine specializing in renal disease and hypertension.

        How might this work? Fructose helps conserve energy during times of scarcity by triggering a neural response that encourages food and water intake, slows down metabolism, and stores fat and glycogen, the paper explained. It also reduces insulin sensitivity which helps preserve glucose, a primary energy source for the brain.

        At the same time, the sugar signals the brain to block out distractions so it can zero in on tasks like exploration and risk taking. All good when finding food is an imperative for survival. Less desirable in a world that requires very little foraging.

        In fact, the researchers found the entire foraging instinct was set in motion by the metabolism of fructose whether it was eaten or produced in the body. Metabolizing fructose and its byproduct, intracellular uric acid, was critical to the survival of both humans and animals, they said. And in addition, the researchers noted fructose escalates the foraging response by reducing blood flow to the brain’s cerebral cortex involved in self-control, as well as the hippocampus and thalamus. Meanwhile, it increases blood flow around the visual cortex associated with food reward.

        When long term high fructose intake pushes the setting on our “survival switch” to high, the brain is constantly on the hunt for high fat, sugary, and salty foods–all of which are readily available on supermarket shelves and the drive through. In turn, this pushes the brain to produce even more fructose which can ultimately lead to neural inflammation and create the conditions that lead to Alzheimer’s, the scientists proposed.

        “We believe that initially the fructose-dependent reduction in cerebral metabolism in these regions was reversible and meant to be beneficial,” Johnson said. “But chronic and persistent reduction in cerebral metabolism driven by recurrent fructose metabolism leads to progressive brain atrophy and neuron loss with all of the features of AD.”

        One study the paper cited as evidence for this idea found that laboratory rats fed a constant diet of fructose begin to build up tau and amyloid beta proteins in the brain, the same proteins that are associated with Alzheimer’s. Johnson goes so far as to speculate that when some Alzheimer’s patients wander off, it may be a vestige of the foraging response.

        Of course, this is all just theory for now. Scientists need more lab data to understand how fructose metabolism might cause Alzheimer’s disease and other forms of dementia in a real world setting. In the meantime, they suggested it can’t hurt to test dietary and drug interventions that reduce fructose exposure or block fructose metabolism to see if they can prevent, manage, or treat the disease.

  5. What about the wildfires? Even before I saw this video, I suspected something as amiss – we usually don’t get forest fires until July. Perhaps the chemicals sprayed in the air has a drying effect on trees? Kids weren’t allowed out at recess because of the smoke. It would be another convenient excuse for a lockdown, wouldn’t it?

    1. This is my overriding concern; the process is so far along now and the financial malfeasance has escalated so greatly without any bonafide pushback that the powers are ready to cause a rapid-fire succession of events that will completely reorient humanity forever.

      The Republican establishment caved to the raising of the debt ceiling. Nothing can now stop this steamroller. The four trillion in additional debt injection means the powers are ready to enter the next phase as they no longer seem to care what we think.

      The naive pretrib Christian thinks this is a great time to be alive. I don’t see it that way at all.

      The globalists will burn down Canada’s entire forest now and most will blame climate control.

      People will get sick and die by the tens of millions worldwide after getting doused with injections and will blame the lack of affordable health care.

      More people are living like in Soylent Green, yet blame lack of government intervention in the housing market.

      People will view the world increased racial violence and social unrest and will blame white supremacy.

      We are done. The time to prepare is now. I am out here fixing up one of my investments about 100 miles from DC. I am putting two more of my condos in multicultural PGC on the market in another 30-60 days for a better chance of surviving.

      Gird your loins, the people have become more retarded than I ever thought possible. It’s a toxic mix that is just begging to explode, and when it does I do not want to be near it nor the fools who have succumb.

  6. There has been increased talk in media about UFOs lately. I think they are prepping for some kind of disclosure more than likely as another distraction from the failures in Ukraine and to bring us closer to a world government to provide a front for the “alien” contact.

    Check out this article about a whistle blower disclosing government involvement in UFOs.


    Note:Do not rely on Zero Hedge for investment advice or investment news. I only use it for news events.

    These so called “aliens” are not really beings from outer space but are satan’s demons posing as such. They will bring “solutions” to our world problems while all it does is to enslave us to the beast system.

    1. Here in the Alleghenies “Bigfoot” is now a hip symbol of the mountains. It is like a Subaru commercial. You see bigfoot decals, you see 8 foot, standup “bigfoot” lawn ornaments. You see this more and more often, and I wonder how the meme is becoming popularized. Maybe it is city folks, recently arrived or cruising around, naming one of their interests in mountain lore. Maybe it is part of the distractive effort by the regime, putting anthropoid monsters in the mix with ufo’s and shadow men.

      Locals who have seen strange things around here have told me about them. I take them seriously. But I don’t tell outsiders. I apply rigorous logic to what I hear. The West is controlled by ancient techniques of priestcraft. Alan Watt spoke of this.

    2. Aliens all over my YouTube feed. Joe “the schill” Rogane pimping then non stop. It’s all a distraction. Baffle them with bullshit if you can’t dazzle them with data.

Comments are closed.