Back with a vengeance: The Fed's response to inflation will WRECK commercial real estate...
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Wow, the new inflation numbers just came in.
The core inflation, and it's skyrocketing.
Way beyond what anyone expected.
And this is with the government fudging the numbers the best it can to try to claim that inflation is very low.
The bottom line is, what it means is that the Fed will not be pivoting.
The Fed is not going to lower interest rates as has been expected and factored into everything.
It's low interest rates or a Fed pivot that was factored into the stock market.
And it was also factored into commercial real estate and the cost to service loans in commercial real estate, which is also imploding right now.
There was an office tower that was just sold in, I think it was New York City, for $1.
Because the buyer, of course, had to assume the loans and the loans are the, that's the thing that's killing everybody because of interest rates.
A huge percentage of the commercial real estate market has to refinance over the next 24 months, let's say.
And they were hoping that interest rates would begin to plunge so that they could refinance at lower rates, but that's not happening.
The Federal Reserve is keeping rates higher, or where they are now and potentially higher.
They may raise rates.
Later this year.
That's a possibility now because of these inflation numbers.
If they raise rates, or even if they keep them where they are, that's a guarantee that the commercial real estate market is going to absolutely implode.
And that's going to cause cascading bank failures across the United States because it's a lot of regional banks that actually conduct the commercial real estate loans.
So as those commercial real estate investors go belly up, These banks are going to be burdened with taking over a lot of actual commercial properties that are largely vacant for lots of reasons because the economy is imploding and because of COVID and the remote workforce phenomenon, all of that.
And these banks are going to have to offload these commercial real estate properties at fire sale prices like $1.
So yes, you're going to see banks essentially giving away commercial buildings to anyone who's willing to just service the debt, even at a deep discount, and keep the lights on.
Pay the property taxes, stop the roof from caving in, and just keep the building going.
If you can do that, you can have it.
That's where this is going.
Seriously.
This is the implosion of the commercial real estate market, and the result is you're going to see cascading bank failures.
So get ready for more bank implosions across America, which means more bailouts, more FDIC funding of bailouts, more losses.
This is what's coming.
Now, what about the residential real estate market?
Well, there's going to continue to be downward pressure on residential real estate because of higher interest rates.
And given these new inflation numbers, again, it means the Fed's not going to pivot, so it's not going to lower interest rates, which means there's no help coming for the residential real estate market.
It's going to continue to be very difficult.
On top of that, The average American consumer is now spending more and more of their income on food because food inflation continues to skyrocket, going through the roof.
The government doesn't even count that.
Otherwise, their inflation numbers would be substantially higher.
But they try to ignore food because, well, they're fudging the numbers.
Now, on top of this, Russia just banned gasoline exports for six months.
And I mean, yeah, it's a huge deal.
This means that there will be no surplus refined gasoline on the marketplace for at least six months.
It might last longer than six months, but this is going to push fuel prices much higher across Europe and the United States.
And you might wonder, well, how can that be?
The U.S. isn't buying gasoline from Russia.
Well, it's a commodity.
It's a fungible commodity.
And so when Russia stops exporting gasoline, it affects all the other countries that normally buy from Russia.
And then they have to start getting supplies from someone else, i.e.
suppliers that also supply the United States or Western European countries.
And so prices rise globally because of that decision by Russia.
Now, why is Russia, by the way, doing this?
I think two reasons.
Number one, Russia is stockpiling fuel for its planned military assault on Ukraine.
Even though gasoline itself is not the most popular fuel for the military, that's diesel.
But there are some vehicles that use gasoline, so that may be one of the reasons.
In addition to that, and I think this is actually the bigger part of this answer, I think that Putin is trying to hurt Joe Biden's re-election chances.
Even though Putin has said publicly that he prefers Joe Biden to be president because Joe Biden is...
You know, more predictable, he says, compared to Donald Trump.
The truth of the matter is that I think Putin despises Biden and the Biden State Department, Victoria Nuland and all those people, because they keep pushing more funding to Ukraine, which is costing Russia more money to fight NATO in Ukraine or to fight Ukraine itself.
And I think that Putin feels like he could Maybe deal with changing of the administration.
Trump would be a new face to negotiate with.
And there might be able to be some kind of a peace accord if Trump is in charge rather than Biden.
And so one of the ways to hurt Biden is to cause more inflation.
And how do you do that?
You drive up fuel prices.
And that seems to be exactly what this is designed to do.
Now, what's making this even worse is the fact that Biden had emptied the National Petroleum Reserve a couple years ago in order to try to drive down fuel prices for the previous election, the 2022 election, you know, try to get Democrats elected at that time.
The result of that is that the U.S. has no excess petroleum reserves.
So they can't flood the market with petroleum.
Again, there's just nothing left.
Which means the U.S. now, the Biden administration, can't manipulate the market and artificially suppress fuel prices.
That means fuel prices are going to rise.
And this will indirectly affect diesel prices, although not as much as gasoline.
And also, since Joe Biden and Western countries have, of course, been at war with fossil fuels, they've shut down fuel and energy exploration and refining.
So Western Europe and the United States don't have the capacity to compensate for the global demand increase.
That has less supply because Russia banning exports.
So bottom line is, you're going to see fuel prices go up.
This may be designed to hurt Joe Biden.
It's definitely designed to hurt Western economies.
It's going to clobber Western Europe in a bad way.
Energy prices are going to go up, and that's going to feed into higher food prices, which brings us back to the food inflation issue that we saw earlier.
Food inflation is going to get much worse.
Core inflation is going to continue to rise.
And that means the Fed is not going to pivot.
Interest rates may actually go up.
And that means that Europe, as well as many investors in the U.S., are stuck between a rock and a hard place.
And you're going to see a massive cascading failure of banks and investment funds and real estate projects, both commercial and residential.
This is going to be an economic implosion.
So get prepared, folks.
Make sure you're all squared away.
You know, gold and silver, maybe even goldbacks, if that's something that interests you, check out verifiedgoldbacks.com.
That's our affiliate site.
Or make sure you've got your food supplies squared away.
It's all happening now.
This is a major action from Russia.
The inflation numbers are in.
The Fed is not reducing rates.
The stock market is in a new bubble, an AI bubble.
It's not going to last forever.
Get ready because reality is going to strike.
And when it does, those who are not prepared are going to pay the price.
So I want you to be safe.
I want you to be well off.
I want you to protect your assets.
So keep listening.
Keep learning.
Do your research.
Do what's right for you.
Don't believe the authorities.
Take every precaution possible.
And God bless you, and thank you for listening.
I'm Mike Adams here of brighteon.com.
Thank you.
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