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FED’s Policies will DEVASTATE Real Estate!!! Plus other Unintended Consequences!

June 16, 2022
Powell’s Rate Hike will have serious CONSEQUENCES for real estate!

Today’s Wall Street Journal had another article by Judy Shelton, Economist, who I view as understanding money better than most. Judy recognizes that our FED merely pushes computer keys to increase the money supply and she calls this creating money ‘out-of-thin air’. I agree.

Judy also understands that the FED (our Central Bank) is following Keynesian economic thinking and this thinking is mostly INVALID for today’s digital economy. She says that money should be a ‘store’ of value if it is to function properly. I would agree.

The Big Mistake which our FED has created with their recent interest rate policies is the devastation which these policies will create within the Real Estate Sector. A doubling of interest rates for housing will devastate this sector (some 25% of our overall economy). All the devastation will start to occur in 2022 (by the end of this year).

I have followed the real estate markets for over 50 years. When the cycle in this market changes it affects many connected industries. Home Depot and Lowes, for example, will discover that their sales will decline big time as housing sales decline. Durable goods will also suffer (furniture, appliances, et al). the unintended consequences of Powell’s interest rate policies will affect many connected industries.

All this will happen this year (2022). We live with digital money which can disappear with the click of a computer key. Stock markets are now totally digital. Consumer markets are nearly totally digital. Some 95% of all monetary transactions are now digital. This market is a ‘fairy tale’ market which can TANK in a matter of weeks. Sentiment can change with the DOW index as it declines monthly.

My sense is that Capitulation within our stock markets has started. This situation will continue for the remainder of 2022. As the stock market and the real estate sector DEFLATE, this will create DEVASTATING consequences for the general economy. GDP will decline rapidly. All can happen in a matter of weeks (or a few months). By the end of 2022 we will all experience a RECESSION.

Once this recession hits, it will turn into a depression in a matter of months. By the end of 2023 the markets will (most likely) be in a DEPRESSION (declining GDP and sentiment). Debt will get exposed as bankruptcies proliferate. It all can happen quickly in today’s IMAGINARY markets (now digital). Our FED is barking up an illusion if they think that digital money can solve our issues of money.

Judy Shelton is right with her understanding that our dollar needs to be ‘tied’ to gold (or similar). A unit that gets created via the stroke of a computer key is unsound and emotional. Our entire money system is now mostly IMAGINARY (virtual) and this can not solve the core issues of commerce (value issues). We need to eliminate this institution called the FED so that a NEW MODEL of commerce can emerge!

As I write the Dow Index is down some 775 points. This Index is now under 30,000. As it declines further in the coming months sentiment will turn sharply NEGATIVE. This will further the economic decline. As mortgage money dries up (due to affordability) this will further our economic decline. We are now heading for recession (by the end of 2022) and then a GREATER DEPRESSION in 2023.

Mr. Powell’s understanding of economics is unsound IMO. Judy Shelton, who was turned down for a position with our Federal Reserve, has much better wisdom than Jerome PowellI IMO. Our Congressional Banking Committee’s also have near ZERO understanding of what is happening. I have followed these zombies for years. They can not discern that VIRTUAL money is ‘imaginary’ money.

Our entire monetary system is now mostly IMAGINARY (subjective/within the mind). Our virtual DOLLAR makes it a VIRTUAL enterprise for valuation of assets. Any VIRTUAL enterprise can collapse in a matter of months. Value can disappear and vanish (back into our consciousness). The entire enterprise is UNSOUND and built upon SAND. We have NO unit of account which has SUBSTANCE (matter). It’s all ILLUSIONARY!

Prepare for collapse over time. By the end of 2022 we should be able to discern trends going forward. As I write ‘uncertainty’ prevails. Uncertainty is what Powell is assuming he can manage with his interest rate policies. I think he will discover that this ‘uncertainty’ will turn into collapse for our economy by the end of 2022. Sentiment/confidence is KEY. Watch what happens with the election this fall.

The American people will send a message with this coming election. Biden will be history (as a policy maker) even as he may last as our President. But all is uncertain in politics. Biden could be history much earlier if my scenario of our economy proves to be VALID. Watch the markets to DISCERN. Have a great day! I must do similar!

Does our FED understand virtual reality?
Real estate values could PLUMMET soon!
Unintended consequences will get exposed by end of 2022!
Keynesian economics started with FDR! It has now ENDED!
Fixing the $ may be impossible given prior history! Watch!

I am: Donald B. Swenson (Svensson), Economist/Philosopher,

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