Linz’s Musings – The Cash Crash and Growth wave coming…

G’day all

Almost the end of February already and 2021 does not seem to be slowing down at all!  With some minor spikes and hotspots of Corona, still raising its ugly head, just to remind us it is still there, but all in all, here in Australia and New Zealand, we have done very well in suppressing the virus

Other countries certainly have not been as lucky, but I guess when you actually do have a ‘MOAT’ and can raise the drawbridge as such, it certainly makes it easier.

In the meantime, market sentiment is already starting to go through the roof!  I have been saying for some time now that we are on the verge of a MASSIVE wave of growth in assets, particularly real estate, and we are already seeing this happen.

NZ is around 3 months ahead of AU, and even the U.S is now starting to rise quickly.

To say that we have been busy in an understatement…

One of the reasons for the massive boost in investments, particularly property is what is called the “Cash Crash”.

In essence, what we are seeing right now, with many government administrations pouring Billions, if not Trillions of dollars into their economies right now (whether or not this is needed is a debate for another blog…) is this will reduce the value of the ‘dollar’ so to speak.

So, investors try and ensure that they do not lose wealth, are looking to put their cash, into assets that do not depreciate in value.

We are already seeing this in the value of commodities, stocks, shares, even crypto and, yes, definitely Real Estate.

By investing in these assets, investors hope to preserve the value of their investment, and ride the wave of growth, or at least preserve the value they have.

Even here in Australia, I wrote about this a couple of weeks ago, the RBA surprised the market by doubling the amount of money it intended to print and pour into our economy by another $100 bn…

I could only see this was in an attempt to lower the AUD rate, but here we are, almost 2 weeks later, and bang, AUD has almost hit 0.80c US

Does this mean they will pump even more into our, already simmering economy?  Who knows, but what I can say is hold onto your hats…because this is going to get crazy!

You got this!

Happy Investing all and have a great weekend!!