More and more often there is talk of the risk of a bubble burst both on the stock market and on real estate.
We see this double alarm that is making them tremble Italians. Inflation is really too high.
Inflation has now arrived in Italy all’8%. And this means that the Italians are losing heavily both in terms of their salaries and in terms of their savings.
Bags and brick: the two dangers
Blame it is of the central banks that for months have kept interest rates at zero and they have allowed inflation to become a monster capable of devouring purchasing power.
For months, experts had been arguing that central banks should have vigorously raised rates but instead they stopped and so inflation rose month after month month. central banks are now forced to raise interest rates sharply. But this could cause a tremendous bubble to burst both on brick and on international stock exchanges.
What do you fear
International stock exchanges have been largely inflated by years of zero rates. It is above all the US stock market that has grown abnormally thanks to the very low rates guaranteed for too long by the Federal Reserve. So today a rate hike it is absolutely necessary to try to stem a now devastating inflation, but at the same time it can lead to the bursting of the tremendous bubble created on the stock exchanges. But it is not only the stock market that is shaking with the rise in rates. In fact, even the real estate sector could suffer a very severe sting due to the move by the central banks.
Central banks need to stem inflation
Indeed, the rate hike could send the vast mortgage market into crisis. According to many analysts, the current situation is not that different from that of 2008 and a bursting of the housing bubble it might actually be possible. Already in America the world of mortgages seems to have stopped and for analysts it is a very bad sign. So if it is absolutely necessary for central banks to raise rates and try to stem this destructive inflation, there are those who must also burst these two different bubbles.
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