Sam Zell insights into these turbulent markets follow;
“We are in this mess because the Fed didn’t do its job over the last three years. When you think about it, we have added seven trillion dollars to the debt in three years,” said Sam Zell.
“This is the Weimar Republic, and if the US is not careful, they will find themselves in the Weimar Republic,” he added.
The US economy is 110% of debt to GDP.
“We are in this mess because the Fed didn’t do its job over the last three years”
Sam Zell insights into the public debt, free money
“The debt becomes a crisis when people do not want to buy our debt which is when we face the prospect of losing the US dollar as the reserve currency,” he said.
What would happen to American standards of living?
“We’re looking at a 20 to 25% reduction in our standard of living,” he added.
Sam Zell believes that if Americans understood this, the US debt would get better attention.
“But the reality is that the Biden administration and Powell have gotten away with not doing anything other than continuing to inflate the bubble, and I think it is dangerous,” he said.
“The debt becomes a crisis when people do not want to buy our debt which is when we face the prospect of losing the US dollar as the reserve currency”
Sam Zell thinks it is naive to think free money is ending.
When you look at the real estate arena where municipalities are, you know, deferring the ability to foreclose, get people out of the house, out of their apartment, and every time the strategy leads to a decision, there is a deferral, and we will wait another three months or wait another six months. And so we are talking about ending free money. But we are not ending free money,” he said.
“If you keep feeding them free money, they get used to it, and then they say, where is my free money” – Sam Zell
“If you keep feeding them free money, they get used to it, and then they say, where is my free money?” he added.
It promotes a culture and a mindset of something for nothing instead of how to add value. Moreover, individual self-worth and self-respect diminish, and they degenerate into crime from both spectrums of the human food chain. Political elite connected class steal through corruption, the poor shoplift, and the state degenerate into collapse.
Look what happened to the housing market. In a matter of 60 days, the monthly payment is doubled.
These are extraordinary times, and I am not sure we have the leadership in power to deal with that,” he said.
Sam Zell insights into the bigs walking away from obligation
“Rule of law is everyone being responsible for their obligations. If the biggest lender in the country Blackstone can walk away from their obligations, who else can?
If the biggest lenders are walking, why should the little guy feel bad about walking away?” he said.
He doesn’t see opportunities yet in real estate despite prices already falling from their peak. He thinks corrections will take a lot longer than most people expect.
Sam Zell’s insights into non-carbon renewables
He doesn’t see the transition from carbon to non-carbon by 2035.
“Ninety percent of what is done is not feasible.
Policymakers need to accept the reality,” he said.
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