Thief of the World

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Downloading movies is a "stealing" act, it would cost millions dollar to the industry. BUT, do you know that real estate investing could cost millions of working lives? Nowadays, people go to work, earn money, just to pay for their mortgages, their rents...

Published in: Economy & Finance
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Thief of the World

  1. 1. THE ILLUSTRATION OF LAND SPECULATION EFFECTS Prepared by: Anh Pham
  2. 2. when the economy goes into recession THE ECONOMIC CYCLE The economic cycle refers to fluctuations in production or economic activity of that nation
  3. 3. when the economy goes into recession THE PROCESS ASSUME EACH SQUARE IS A PIECE OF LAND/ PROPERTY A, B, C AND D ARE UNEMPLOYED
  4. 4. when the economy goes into recession A B owned by residents A,B,C and D empty land C D THE PROCESS ASSUME EACH SQUARE IS A PIECE OF LAND/ PROPERTY A, B, C AND D ARE UNEMPLOYED
  5. 5. when the economy goes into recession A B C D THE PROCESS
  6. 6. when the economy goes into recession A B C D THE PROCESS
  7. 7. when the economy goes into recession A B C D An investor buy the land for $100,000 THE PROCESS
  8. 8. when the economy is getting better THE PROCESS
  9. 9. when the economy is getting better A B C D THE PROCESS
  10. 10. when the economy is getting better B,C and D get jobs Each earns $20,000 p.a. A B A opens his own restaurant C D THE PROCESS
  11. 11. when the economy is getting better B,C and D get jobs Each earns $20,000 p.a. A B A opens his own restaurant Government spend less on S C D dole More money to build public structure (train station from THE PROCESS
  12. 12. when the economy is getting better B,C and D get jobs Each earns $20,000 p.a. F E A B A opens his own restaurant Government spend less on S C D dole More money to build public structure (train station from G H I L More people move in this town: F, E, G, H, I, L. Those people buy land, build factory, make goods to satisfy demands for THE PROCESS
  13. 13. F E A B S C D G H I L THE PROCESS
  14. 14. F E A B S C D G H I L THE PROCESS
  15. 15. In 3 years time F E A B Lands become more $$$ S C D G H I L THE PROCESS
  16. 16. F E A B S C D G H I L THE PROCESS
  17. 17. F E A B S C D The investor then sell his land for $200,000 G H I L THE PROCESS
  18. 18. F E A B S C D The investor then sell his land for $200,000 G H I L The investor made $100,000 profits over 3 years for “sit and wait”. A,B,C and D worked during 3 years THE PROCESS Each dollar they made from their own hard work are the same with each dollar the investor earned from sit and wait. The investor is stealing/ or “sharing” the purchasing power of A,B,C,D from their production.
  19. 19. A B S C D EFFECTS ON PRICES
  20. 20. Now back to a situation A B before F,E,G,H,I and L move in the town: S C D EFFECTS ON PRICES
  21. 21. Now back to a situation A B before F,E,G,H,I and L move in the town: Investor(s) bought the remaining lands/ properties $100,000 each S C D EFFECTS ON PRICES
  22. 22. Now back to a situation A B before F,E,G,H,I and L move in the town: Investor(s) bought the remaining lands/ properties $100,000 each S C D F,E,G,H,I,L want to move in and start business EFFECTS ON PRICES
  23. 23. Now back to a situation A B before F,E,G,H,I and L move in the town: Investor(s) bought the remaining lands/ properties $100,000 each S C D F,E,G,H,I,L want to move in and start business BUT no more lands are available EFFECTS ON PRICES
  24. 24. A B S C D EFFECTS ON PRICES
  25. 25. A B S C D EFFECTS ON PRICES
  26. 26. Investor(s) will either sell the land for $300,000 F E A B each or lease the land at really high rate S C D G H EFFECTS ON PRICES
  27. 27. Investor(s) will either sell the land for $300,000 F E A B each or lease the land at really high rate Either ways it results in higher land input costs for S C D businesses Final products will be priced at high level, inflation will be pushed up G H EFFECTS ON PRICES
  28. 28. Investor(s) will either sell the land for $300,000 F E A B each or lease the land at really high rate Either ways it results in higher land input costs for S C D businesses Final products will be priced at high level, inflation will be pushed up G H Only F,E,G and H can afford high land costs, economic is under production EFFECTS ON PRICES
  29. 29. WINNERS VS LOSERS
  30. 30. WINNERS VS LOSERS
  31. 31. WINNERS VS LOSERS
  32. 32. workers and business the nation as the whole WINNERS VS LOSERS
  33. 33. workers and business the nation as the whole $$$ WINNERS VS LOSERS
  34. 34. workers and business the nation as the whole higher inflation, less purchasing $$$ power or simply poorer underproduction WINNERS VS LOSERS

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