Capitalism threatens to throw us back to the Dark Ages

Oh god, we ARE doomed then.

 

I don't mean to be unkind, but I suspect you're a little naive.

All of us should expect 6 months minimum. If you're not prepared for that already, get it done TODAY.

 

It will be more than two months. And yes, a huge number of businesses are going to close.

 

That's an interesting and unexpected feature, isn't it. It's VERY relaxing. Weird!

Easy for you and I to say of course, given we're not going to be affected economically in any meaningful way, but still - for many this will actually be a positive time. I'm speaking to a lot of friends and family who are already loving the lockdown. It's got them doing things they wouldn't normally do, talking more, walking more, eating less unhealthy food, sleeping more, etc etc. So far only teenagers are complaining

Edited to say: yeah, calm before the storm absolutely. In a few weeks, millions are going to be out of work.

 

I don't doubt they will. I'm just saying theoretically, in an efficient free market economy, they would not.
Property owners would know it's in their best interests to lower rents down to a level that corresponds to business profits of the ones renting from them.

 

No, it was back in 2017 when he was disbanding the Pandemic Awareness Board because it was one of Obama's projects and for NO other reason.

 

Well, free money is a lot better than a lot of other ideas that have been floated around.

Certainly could be less expensive and more cost effective than a lot of these other ideas.

Most people, for instance, have no idea how much of an inflationary effect is caused by the Federal Reserve Bank tinkering with interest rates.

 

You're stopping well short of the bigger picture. A significant proportion of property investors won't do that, because it's not an economically viable option. They'll sell the property in favour of holding cash until the economy rallies. Cash can get them a couple of percent and reduces their overheads. A rental property yielding less than that couple of percent, PLUS carrying overheads .. will not be attractive at all.

 

"viable" compared to what? Who will buy the property? You're not making any sense.

They can only extract as much rent as the businesses can give them. If they could get more rent, they would have done so already.

 

Yet it's the Progressive Left who despise collectivism .. the very thing that would protect them in a crisis.

Just ask any Prog how willing they were, a month ago, to sacrifice their privacy, freedoms, and lifestyle in the interests of group security?

 

I think you are right on the mark. The difference is I just don't think Americans are going to reap that disaster this time around.

 

There are always buyers for property.

And I'm sorry you don't understand the way this works. I can't explain it more simply than I did. Investors will make MORE money, MORE safely .. by shedding properties in favour of cash. Cash is always king in a crisis. They won't hold costly properties for a lowered yield. It makes no sense.

 

They're not going to do that. SOME might, but the majority won't.

 

Don't you realize it's not going to make any more sense to sell than to rent? The new buyers will find themselves in the exact same situation. So obviously, the market prices will be down.

If profits are down, the owner can't just "sell out". He is basically stuck. Whether he stays, or sells what he has, he will take a big loss.

 

Not at all. For every property investor who owns property for yield (rent), there is another who is a land banker. Land bankers will ALWAYS buy property, and don't want or need the rent.

The land bankers will simply buy up all the invest-for-rent properties investors will shed because the yield no longer exceeds the costs, and hold them vacant until the market ralies. They'll have an absolute bonanza.

 

Oh, I see what you're saying.

But you will admit that if the landlord was wise and acting in his own best self-interest he would not do that.

 

There isn't always anything for anything, or rather, there are always buyers, but not at a profitable price. An investor is not going to be making more money more safely if the buyer is making a killing at a fire sale price

 

Capitalism may have its problems, but listening to some of the replies here, I don't think I trust the intelligence of human beings to manage things better.

 

No need for fire sales, just a modest price adjustment. It's already happening. Investors (for yield) always move out of the market when it's not performing - and a reduction in yield is 'not performing'. Land bankers will move in, and those already in will expand their holdings.

All of which will speed up the inevitable future - far fewer individuals owning property. Almost all property will eventually be owned by investors, who will be able to control everything about how we live. Anyone who doubts this isn't reading the writing on the wall.

 

IMO, when it comes to government action it is usually, probably always, better to keep it as simple and direct as possible.

 

Big Bad Businesses are the dairy cows of America's corrupt bipartisan political class from left to right. They are protected for their milk.

“Getting Rich has become the great bipartisan ideal: “No Democrats and Republicans in Washington anymore, only millionaires”, goes the maxim. The ultimate Green party. You still hear the term “public service” thrown around, but often with irony and full knowledge that “self-service” is now the real insider play.” THIS TOWN, Mark Leibovich, Penguin Books, 2013. p. 9.

 

I went to the Supermarket this morning and the shelves looked like a swarm of Locust went through a Wheat field. It's the run on Toilet Paper that puzzles me, Covid-19 does not include diarrhea. I was chatting with a guy at the deli counter. We were discussing the empty shelves, I told him this is America under Bernie Sanders. We both laughed so hard.

 

Even the Socialist used to know better than to reward the idlers.

"The socialist principle that 'he who does not work, neither shall he eat' is already realized; the other socialist principle, namely 'an equal amount of products for an equal amount of labor', is also already realized." The State and Revolution, VI Lenin, Penguin copyright 1992, p. 85.

 

It can well be argued that owning property is a mug's game now and has been for some time. There is a book called Die Broke that you might find interesting if living well and free is your end goal

https://www.amazon.com/Die-Broke-Radical-Four-Part-Financial/dp/0887309429

 

Don't forget the Fed inflating asset prices by artificially lowering interest rates.

When you lend out money at no interest, someone else will want to take that money, buy an asset, and collect interest/profit off the asset. So the market prices of all interest/profit yielding assets then go up. Those who own property can then sell their property at an inflated value.

The asset-owning class benefits. Those who don't own assets, who are just earning money, are out of luck. If they try to buy an asset now the interest returning yields will be way low.

You want to talk about the causes of inequality, look no further than the Fed lowering interest rates.