Short road to immense profits
We understand the concept of the housing bubble very well: sell houses at inflated prices, launch the bubble, and you end up owning the houses AND you still have people who owe you money for those houses they do not have. You can sell the houses later when the market recovers (and the people will still be paying on the houses they do not have). In the meantime, while the FED interest rate is at zero, borrow even more money so you can lend it back to people later at a nice high rate.
What we did not understand is why governments launch public road constructions to houses that people do not own anymore.
The strategy behind this, however, is simple, really. If you want the price of toys to increase, burn down the trees – as they do in the Amazon Rain Forest and in Indonesia. The value of the property where the trees stood will plummet. Buy it cheap with money the government will lend you at an incredibly low rate. Convince the government you need new roads to it to grow new trees because it will also create government-sponsored low-paying jobs. Then grow the trees; the price for wood will now be very high. The value of the tree property will go back up. And buy into the toy making industry. It is the short road to immense profit.
But why the road construction because once it’s completed there will be no more jobs? That (the end of these jobs) is not a concern to those who got the property on the cheap. What is of concern to them is that, as research shows, the property along new public construction projects significantly increase in value. They will now add toll taxes and other suchlike fees – charged to the poor who will need to borrow from those banks who got the money cheap – and enjoy the profits for many years to come. So, it all started with creating inflation on property prices and end in road construction and new taxes.