One hot take -- If the fed loses appetite or ability to continue increasing interest rates, I think those carrying large amounts of debt on hard assets are going to look like geniuses in the face of runaway inflation.
Real estate investors and even regular old homeowners have always looked liked geniuses for exactly this reason. When the dollar loses value every year, loans are cheap, mortgages are subsidized and largely purchased by the government, and the supply of new housing is constrained, the absolute smartest investment to make is in real estate.
Seems like a housing price crash and AirBnB regulation would make them look a little bit less like geniuses, no? A lot of people have a hard time spending >$500k on very basic or even dilapidated homes across the USA. I'd enjoy seeing the speculators left holding the bag on massive losses if those prices return to normal AND they lose their main revenue stream.
> Seems like a housing price crash and AirBnB regulation would make them look a little bit less like geniuses, no?
Idk, I know of a ton of RE investors who would love prices to go down, precisely so that they can pick up more properties. And even if the town you're operating in outright bans AirBnBs, there are ways to pivot into other short-term rentals like furnished 3-month rentals for traveling nurse.
> If the fed loses appetite or ability to continue increasing interest rates
How does the Fed lose the ability to increase (or decrease) interest rates? I was under the impression that (ignoring the consequences of doing so), they can set them as they please.
The Board of Governors is appointed by the President, and Governors can be dismissed by the President. If your increase is summarily reversed by the apparatchik board that replaces you, can you still be said to be capable of raising rates?
The Fed chair is appointed by the President. He or she may decided it is better for their re-election to have rates go down and appoint someone who agrees, or they my pressure the Fed chair accordingly.
Yes this is what my banker friend told me when he bought his house last year. The inflation will be a much greater discount to any premium he paid over asking.
