Thursday, September 10, 2009

The madness continues

The cost of purchasing an apartment continues upwards in Sweden. Unemployment is still going up; the government is running a SEK 200 billion deficits, several banks still have huge loses to cope with, trade is way down and the fundamentals in the economy is shaky at best, but people are still buying homes. The total accumulated Swedish debt is now 150% of GDP and rising, but people are still borrowing and buying apartments. Now, what’s the very definition of a bubble again?

There are two reasons for prices going up. Firstly, with a lesser impact, are the low level of construction and a scarcity of homes in general. If there isn’t enough on the markets, prices will go up. The government has seen to this through massive regulations, sky-high taxes and few competitors. Secondly, and most important, interest rates from the central bank (Riksbanken) is actually on minus, in affect paying lending institutes to take hundreds of billions. With this free money and very low interest rates, people feel the urge to out borrowing and spend, further raking up a debt. This is, of course, pure madness.

We are repeating the mistakes made in the 80’s when the real-estate and housing markets in Sweden crashed, making several banks going bankrupt. But this time around it’s even worse. Worse because of how the world markets and several fundaments in several important economies look. The Chinese government is urging its citizens to buy Gold and Silver, ever wondered why that is?

People should not be buying anything right now, and least of all, housing. Such a big investments means that lots of money get tied up in a fixed way, and if there is a mortgage attached to it, those idiots are trapped when the real mayhem starts. So lots of capital is getting ensnared within homes, capital that is much needed elsewhere, and will be even more wanted in the future. We stake up more debt and will build a huge bubble. Together with all the rest of the economy this spells complete disaster.

The central bank people and the Swedish government should all be stringed up. But you, the idiots, you are also to blame. If you listen to cornflake economists, deceitful elected frauds and pundits that never got a single thing right, then you deserve whatever you get


  1. Why not borrow money at no interest and buy gold bullions?

  2. That may sound like a good plan, and it is better than buying a house, but interest rates are bound to go up, probably into double digits. And other commodities will also have a massive increase in pricing, consequently such a move is, at the very best a zero-sum-game. Either way, taking a loan will just feed the banksters, making those bastards richer. That is in no way a good plan. Buy Gold yes, taking a loan, no.