A storm is coming...
I am not talking about last weeks stock market turmoil, or the recent hurricane devastating the east coast.
A storm is coming and the economy will crash big time... Here is why:
The federal funds rate is climbing back up again and has been rising to above 2% lately.
I see this trend to continue which will be harmful for everyone who is in debt where interest rates are not fixed.
Same thing happened 2006/2007 to the subprime market (compare 2004 to 2007 federal fund rates) which caused some minor crisis 🙈
In 2018 however the situation is almost as bad, if not worse.
2 major markets will crash in (latest) 2020:
1️⃣The market for car loans in the US.
This situation is even worse than before the financial crisis. If you look into the numbers, its super scary and there is no way that this market will not crash soon.
2️⃣US Student loans
This sector is even worse, because it is the only debt a person cannot declare bankruptcy against.
Same horrible circumstances, that a lot of these loans have variable interest rates. If this goes wrong, you are screwed for life.
A storm is coming and it will turn into something that we have not seen since 1929!
P.S.: If you plan on getting a loan for a house, get a fixed rate for gods sake!
P.P.S.: Hopefully the chinese real estate bubble will not be affected by that, or everything will be much worse!
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