Ripple Effects Of Higher Interest Rates
Again, these are all points that have been made here, or on the YouTube Channel.
Higher interest rates mean that the huge investors (pensions) have the ability to allocate money to receive the proceeds required to pay their obligations.
Let’s take an easy example, your house. In order for your house to quickly appreciate, there needs to be a new buyer, or the threat of a new buyer. That can create the pressure required, for the buyer that has been waiting waiting waiting. The issue here is that now, that possible buyer (as per the image) may not re-enter stocks. This might put a cap on equity returns over the long run? Very possible.
The past 20 years has been an era of TINA (there is no alternative). While that has manifested itself in many ways (real estate, stocks), the denominator has allowed this to occur. Now, however, the opposite is true, perhaps.