We’re in a suicide spiral where fiscal policy has staved off economic malaise by kicking the can down the road.
Interest rates have been kept low, which drives real property prices up. Everyone intuitively knows that collapse or high inflation is the endgame, so money flocks to property, which drives up demand.
The issue isn’t the coffee shop in the fishing village, it’s that the fishermen are selling real estate now and nobody actually lives in the village.
You can see this in many places. Lake George, NY is a great example - beautiful village, great location, but can only support tshirt shops from Memorial Day to Labor Day. Manhattan is the same way — the Lower East Side is like a museum of what Manhattan was like, with $2M condo apartments being randomly dropped in and 1/3 of the storefronts vacant.
Interest rates have been kept low, which drives real property prices up. Everyone intuitively knows that collapse or high inflation is the endgame, so money flocks to property, which drives up demand.
The issue isn’t the coffee shop in the fishing village, it’s that the fishermen are selling real estate now and nobody actually lives in the village.
You can see this in many places. Lake George, NY is a great example - beautiful village, great location, but can only support tshirt shops from Memorial Day to Labor Day. Manhattan is the same way — the Lower East Side is like a museum of what Manhattan was like, with $2M condo apartments being randomly dropped in and 1/3 of the storefronts vacant.