August 21, 2020 | Panic in Real Estate

COMMENT: I live in central West Texas, I am passing on to you the fact that there is a “rush” of sales in rural property’s. Houses with small amounts of land attached are “flying off of the shelves” so to speak. This is occurring throughout all of West Texas and in the Panhandle. The effort to getting out of the cities. Even cities as small as 25,000 is in full swing! People are well aware of the potential of what is in the near future and are not sitting around wondering what they should do.

They are acting!

J

REPLY: There is a massive exodus from California and New York in particular. Even in North New Jersey, houses are selling in just days and over asking prices for cash. People are bailing out of New York City in herds. Here in Florida, condos are selling as fast as they can get them up in St Petersbourg. These lockdowns and COVID restrictions that are insane in the major cities have set in motion a massive exodus that these authoritarians never anticipated. As they flex their muscles to try to make this so draconian over nothing, they are completing the cycle which has been pointing to the collapse of urbanization, and the rich will flee.

One of my favorite stories of the Sovereign Debt Crisis is the City of Mainz, in Germany, around 1440. The goldsmith Johannes Gutenberg invented the printing press,. He began the Printing Revolution that enabled the Renaissance to flourish. His printing press could produce up to 3,600 pages per workday compared to the hand-copying by scribes which would produce only about 40 pages per day. The printing press then spread within several decades to over two hundred cities in a dozen European countries. Mainz exploded economically and quickly the politicians were licking their lips with visions of new tax revenue without end. They began borrowing against future tax revenue since they learned how to spend the money faster than it could be collected.

As the politicians of Mainz kept raising taxes because they could not pay their debts, they began to issue new debt to repay the old as we do today. Suddenly, they drove people out because of their taxation as we are witnessing once more. Then the politicians could not sell new debt to pay for the old and that is when then defaulted. The Pope excommunicated the politicians for their abuse of Usury and then the creditors simply invaded, sacked the city, burned it to the ground. No doubt, this is the fate we will face because politicians are driving their car at top speed without a seat-belt and they never checked the tires.

There is a major flight from the cities and we are witnessing the collapse in real estate in urban centers and suburbia prices are rising as people are paying cash and even over asking prices.

Martin Armstrong August 21st, 2020

Posted In: Armstrong Economics

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