Taper it is… but for how long before they increase it again?

On January 29, 2014 by Phil Champagne

Well it seems the decision was to taper… a bit and a bit more.

And the result: all that money that was fueling the emerging markets is starting to create problems. We are living in a very connected world

Developing countries excluding LDCs (Least Dev...

Developing countries excluding LDCs (Least Developed Countries) Newly industrialized countries Other emerging markets Other developing economies (Photo credit: Wikipedia)

economy, much more than before.

Contagion Spreads in Emerging Markets as Crises Grow

http://www.bloomberg.com/news/2014-01-24/contagion-spreads-in-emerging-markets-as-crises-grow.html

Investors Flee Developing Countries

http://online.wsj.com/news/articles/SB10001424052702303448204579338803161592252

This fake recovery that was only sustained with quantitative easing to support this debt-based dollar system is unraveling with this tapering. Just like a drug addict who is having issues when he cuts the juice, this is what’s going on in the economy. The trillion dollar question is, how far will they let this go before they bring back the printing press to avoid this free fall?

You can be sure of this, not only will taper be reversed, the previous QE we had will be increased. $85 Billions per month will not be sufficient – remember that’s over $1Trillion of new money created every year! And it won’t be enough because there is more debt than before. Every dollar exist from a debt, but the debt increases because of the interest, making the amount of debt always higher than the dollars to pay it.

Why do we invest in multifamily in such an environment? Because it brings cash flow, because people need a place to live and because people are more likely to downgrade in this rising inflation in a less costly place. Multifamily housing with shared walls and provided amenities help suffering families moving out of single family homes. Essentially, a single family home is a “luxury living” in a way, compared to a 2 bedroom or 3 bedroom apartment. Your own garage, backyard, front yard, but all of that cost. You can expect the interest in the RIGHT multifamily housing to continue, just as it did since 2008.

 

 

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