In this week's Off the Cuff podcast, Chris and Brian Pretti discuss:
- Housing Bubble 2.0
- How quickly we forget the errors of our ways…
- China's Impending Massive Implosion
- A bubble of historic proportion
- An Investing Cycle vs A Demand Cycle
- Things will collapse after the greatest fool buys in
- Lack Of Good Options
- Asset bubbles everywhere, not just in housing
Earlier this week, Chris warned of the global housing bubble stretching from Beijing to Britain. In this interview, Brian Pretti joins him to delve deeply into the topic.
Indeed, after just six short years, we appear to have repeated the sins that caused so much havoc when the first housing bubble of the new millennium burst. In a number of major markets, prices and price-to-income multiples are substantially higher than they've ever been before. How could we be so blind to such a large threat, especially one so recent in our experience?
It has everything to do with the perverse consequences of central bank intervention. Capital has become desperate for return, or for safe haven. Investors (especially outside the US) are piling into real estate as a "tangible asset", which causes housing prices to rise, which then draws in more capital seeking to ride the appreciation wave. Never mind that valuations have quickly vaulted to stupid levels again.
by pgp