August 10, 2022

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Bubble bursting on the stock exchange and on bricks: Italians tremble

Too often there is talk of a bubble bursting in both the stock and real estate market.

We see this double alarm that makes them shiver Italians. Inflation is really very high.

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Inflation has now reached Italy to 8%. This means that the Italians lose huge losses In terms of their salaries and savings.

Bags and bricks: the two dangers

blaming It’s the central banks that have kept interest rates at zero for months They have allowed inflation to become a monster capable of devouring purchasing power.

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For months, experts have been arguing that central banks should have aggressively raised interest rates But instead they stopped and so inflation rose month after month. Central banks are now forced to raise interest rates sharply. But this could cause a massive bubble to burst in both international and stock exchanges.

what are you afraid of

International stock exchanges have been greatly inflated by years of zero rates. Above all, the US stock market has grown abnormally thanks to extremely low rates Guaranteed for a long time by the Federal Reserve. Until today, the interest rate hike It is absolutely necessary To try to stop the destructive inflation now, but at the same time it can lead to the bursting of the huge bubble that has arisen in the stock exchanges. But it is not only the stock market that is shaken by rising interest rates. In fact, even the real estate sector can suffer a very severe bite due to the action of central banks.

Central banks need to rein in inflation

In fact, raising the interest rate can lead to Sending the vast mortgage market into a crisis. According to many analysts, the current situation is not much different from the situation in 2008 and the bursting of the housing bubble It may already be possible. It seems that the world of mortgages in America has already stopped and for analysts this is a very bad sign. So if it is absolutely necessary for central banks to raise interest rates and try to stop this devastating inflation, there are those who must also burst these two different bubbles.

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