Hong Kong’s Property Prices have continued to rise every month this year. 5 years ago the prices were already at levels that would unnerve even those with mild vertigo; but now the prices have gone stratospheric and if it carries on on the current trajectory it will leave earth’s atmosphere and enter space – the unknown – the void – a point of no return and quite literally “out of this world”.
One can longer look at economic indices or co-efficients to try to predict where the markets will go; where the markets go are now controlled entirely by central banks – if they decide to print more money inflation will continue, the wealth gap will continue to widen and the world will continue to pull apart. If they decide to increase interest rates and cease their expansionary monetary policy we will enter a recession and the property bubble in Hong Kong (and other parts of the world) will just explode.
So, the only chance that the crazyiness we are going through now where inflation has been double digit every year since 2008 will cease is if there is a revolution whereby those central bankers are removed from office and exterminated. The world is not at that juncture yet but we are moving towards it faster than most people would like to believe. All the threats about “tapering” – as in reducing the balance sheet and giving the money printing regime a break will not happen; why – because printing money is like a drug – not a soft drug like marajuana but a much harder one like heroin – one that will require serious cold turkey to kick. The addiction is just too great. The impartial observer will notice that the threat of tapering has been motioned regularly since 2013 yet money supply keeps expanding year on year; we have been threatened for 4 years already yet the exact opposite has happened so I am pretty sure these threats are hollow.
I predict that money printing in the US will continue for the next 3 years at least – until people start to get violent and start assassinating central bankers and bankers in general.
When US prints money, China prints just as quickly – the difference being that China does not have to make public anything and even when they do the figures are not reliable. So in many of China’s smaller cities, property prices have risen as much as 50% in 2017 alone and the debt bubble is growing fast; and the traditional mentality of saving for the rainy days is changing to leveraging as much as you can.
Although, I worry about the stability of the world and Hong Kong greatly, I think money printing will continue in the US and around the world for at least another 3 years. The only thing that will put an end to it is some kind of revolution – therefore I predict that property prices will continue to rise for the next 3 years and when this bubble does burst it will be the biggest downturn ever resulting in a catastrophe – ie. a global war. The other thing that could put an end to the insane rise in property prices is a global epidemic, a meteorite hitting us, Kim Jong Un firing a missile that hits the US; in the absence of some of kind of force majeure the music will continue to play to the Fed’s tune.