For example, right now there is a LOT of empty commercial real estate in the US because you can claim that empty stuff at the same rate as when it was rented out but tack it onto the end of the mortgage. However, if you rent it out for less the bank gets to call you in and demand cash as your basis has changed.
There is also a bunch of this in malls: places like Cheesecake Factory simply quit paying rent. As a mall owner, what are you gonna do--kick them out?
This all works as long as there is enough cash flying around and the Fed is printing LOTS of money.
The problem is that once the defaults start they will go like dominoes.
Most likely scenario to trigger this would be the boomers starting to die en masse due to age and their heirs wanting to cash out their stock positions. Stocks are great--until you want to convert them to cash.
The first of that cohort hit 70 in 2015--they're already right about at average life expectancy. The last of that cohort to hit 70 occurs just after 2030.
And the boomers may pull stocks for other reasons--having to pay for dementia or Alzheimer's care, for instance.
For example, right now there is a LOT of empty commercial real estate in the US because you can claim that empty stuff at the same rate as when it was rented out but tack it onto the end of the mortgage. However, if you rent it out for less the bank gets to call you in and demand cash as your basis has changed.
There is also a bunch of this in malls: places like Cheesecake Factory simply quit paying rent. As a mall owner, what are you gonna do--kick them out?
This all works as long as there is enough cash flying around and the Fed is printing LOTS of money.
The problem is that once the defaults start they will go like dominoes.
Most likely scenario to trigger this would be the boomers starting to die en masse due to age and their heirs wanting to cash out their stock positions. Stocks are great--until you want to convert them to cash.