www.armstrongeconomics.com
The greatest problem with real estate is you cannot pick up and
leave. The Federal Council in Germany is planning to re-evaluate the
approximately 35 million homes in Germany. It is now expected that the
result is likely to be a significant increase in the property
tax. Administrative expenses for the state fund-raising action is very
significant and more than 50% of municipalities were in financial
trouble BEFORE the refugee crisis.
This is the final stage of property before capital begins to shift to
equities. The significant difference appears before a major crisis or
Dark Age event. The property becomes the target of taxation and as taxes
become insane, property values decline. The end game is people just
leave. This is how what use to be vibrant places to live become ghettos.
If the cycle become extensive and people migrate just walking away, you
go through the phase such as Detroit and move on to situations like
Rome. They have no choice but to abandon the property. This can be
created by excessive taxation or political instability such as an
invasion.
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