Global recession is clouding the whole world. I discuss the land – money myth, which is the main reason for Global recession.
Everybody says, United States goes down, all the major banks closed down, etc. What happened to the money and where is it gone?
Last year my friend purchased a land(tiny bit of land) 100km away from Chennai. He got a loan from XYZ bank for 2 lakhs. Paid the bill to the land and started paying the EMI.
He also ‘advised’ me to get a loan and purchase a land along with him. Fortunately, I was lazy enough to produce the documents for loan processings. Moreover, I am not interested in ‘loan’ amd ‘EMI’.
Soon, he was in dear need of money, trying to sell his land. Nobody was there to purchase it. He approached the brokers and conveyed as ready to reduce the price. His 2 lakhs become 1.5 lakh. Later it become 1 lakh. He kept reducing the selling price.
Suddenly, he realize that his 2 lakh becomes 0(zero). Nobody was there to buy it. But he still paying the EMI to XYZ bank but with hate. Soon, he may stop paying the EMI and ask the bank to take over his land. If he stopped the EMI, the bank’s 2 lakhs and the huge return will be equal to the price of the land – 0 (zero).
The 2 lakh money value of the bank become 0. Like that many 2 lakh or 2 crore will become 0.
The same might be happened in United States. People borrowed loan from banks and invested in land and houses. Billions and Millions have been invested(buried) in realestate. Now the Billions and millions become zero value.
You purchased a land/house for 25 lakhs with a belief that It will grow up to 1 crore in the near future. But suddenly, you realize that your land value kept being reduced rather than growing. It become 10 lakhs. But you have to pay the EMI for 25 lakhs, not for the current value of your 25 lakhs.
It may be little confusing.
Even though your 25 lakh become 10 lakh, you have to pay the EMI/loan for 25 lakh. You try to sell your land at whatever price you get. But nobody purchase it since people expect it to get reduced to few hundreds. Finally, you stop paying the EMI/Loan and bank will take over your land/house. When they try to resell it it, they may get 10 or 5 lakh or not able to sell it. So the bank’s 25 lakh become nothing.
The same is applicable to shares and mutual funds.
Like water evaporates money invested for big return evaporates.
Billions of Billions dollar evaporated. It is like I have bundles and bundles of cash in my locker. Take all and burn the money bundles into ashes. Now I am broke.
Like that, banks invested/burn the billions of billions of cash into land through massive payout to individuals as loan. Now the money becomes sand and concretes without any monetary value.
Money saved will be spent. Money invested will be evaporated. Money spent will be floating in cycle. Saving or investment is a stagnation, no use to anybody. Let the money float.
If we do not have fear of future, we will not save. If we do not greed for future, we will not invest. It is the fear of future and greed bring the global recession.