I’ve been saying it for months, a recession is coming. The GDP numbers have told us that we are OFFICIALLY in a recession. However, if you’re sitting here thinking this recession is going to be easy, and is going to last six months– think again. We have not seen a true recession in 14 years, that is serious. What we are experiencing now is just the beginning of the beginning, and the trigger of the recession is still coming. What is that trigger? Believe it or not, the trigger is not going to be something within the United States, it is actually going to come from outside of the United States. What I am focused on right now is the Chinese real estate bubble.
Will the Chinese real estate bubble burst?
What is the Chinese real estate bubble?
Chinese real estate developers have been developing A LOT of real estate, especially apartment complexes. These developers have flooded the market with hundreds of thousands of apartments, and have taken billions of dollars of debt to build these complexes that nobody is moving into. The demand simply doesn’t meet the supply. The real estate market in China has been on the rise since the financial crisis of 2008, and has contributed greatly to the growth of the Chinese economy. In fact, in 2019 the real estate market in China was estimated to be worth twice as much as the American real estate market, at 53 trillion dollars. Like I said, I’ve been saying it for months a recession is coming.
Why is this bubble important?
Because the bubble is literally bursting. The largest developers in China have just forfeited a large amount of debt they owe the government for building a lot of real estate in the country. As a result, we have a lot of developers developing single family residences, such as apartment complexes. However, there are not enough buyers, or even people to fill up that real estate. I am very familiar with this EXACT scenario, as this was the situation in Dubai when I lived there in 2007. As a result of all of this we are going to see prices come down and investors lose A LOT of money, which I think will impact the economy on a global scale.
How does this affect the United States?
China is a key player in global economics, especially when it comes to trade. When the real estate bubble pops, and China is put in a difficult position, especially since real estate accounts for a third of China’s GDP, that will cause China to cut trade with other countries. When you take China’s position currently and their importance in the global economy, an economic player that large crashing will send shockwaves all over the world, including the United States. This will inevitably send our economy into a worse position than it already is in.
So what can we do?
Unfortunately, there is nothing we can do about the recession and how it is going to impact the economy. A recession is just a part of the economic cycle, it is inevitable. However, we can actually take advantage of opportunities that arise during this time. If you find yourself asking what is the best investment during a recession, flex spaces are for you. Flex spaces are recession proof! That is why I am so focused on them, and I know that millionaires can be made during this recession through the development of flex spaces. I have tried and tested my process of building flex space office warehouses, and now I want to help others build their portfolio too. Now that we are just in the beginning of what is to come out of the recession, it is the perfect time for you to jump in, invest in yourself, and potentially walk out of this recession with a 7-8 figure net worth. Check out Flex Space Untapped for more information.
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