So this should be the alarm bell that contradicts the argument.
In 2008 the Fed took what was then seen as a 'generational' bump in assets on it's balance sheet, namely bad real estate, effectively bailing out banks and home-owners, and arguably exasperating inequality.
But the money printing going due to COVID has dwarfed everything, to the point of multi-generational consequence, and what we might argue is a 'New Financial World Order'.
The Central Bank realignment due to COVID may be as significant as the start/end of Bretto-Woods etc. because the degree of social intervention is on an unimaginable scale. Aside from the 'raw numbers' it means social intervention and governmental direction of the economy like we have not seen since WW2 but this time without the obvious and easy infrastructural and educational adjustments to make: in the 1950's there were no highways - so they got build, and nobody had College degrees so getting former Officers/NCO's into College was a no-brainer.
Interest rates have been going down, and historically lower since the end of Bretton Woods, and they are now in the range of where it's causing considerable strain with massive leveraging, negative central bank overnight rates etc..
The result of this is a 'primary driver' of the Housing Boom, and it's the same thing happening in almost all asset class.
Or in other words: we are playing flirting dangerously with real, scary inflation, it's just happening in our homes so we think it's all good.
COVID has caused us to 'look the other way' with regards to financial reality, which is understandable, but that can't go on forever.
I am not a supporter of Crypto, BTC or any of the like, and I generally loathe the anti-fiat fanaticism etc. because I don't think these arguments are data driven or made in good faith, however, COVID has brought a lot of credibility to the fiat debauching concerns.
Housing prices are one element of that.
Home prices have gone up way more than incomes over the last 10 years. Economists don't seem to want to call it inflation until incomes are rising. I'm glad I bought a house for $180K in 2011 that's worth $360K now 10 years later, but I really wonder how folks who are entering the market now are able to deal with the much higher monthly payment. That's going to divert spending away from other parts of the economy for quite a while.
I’m simply choosing not to play, I’ll keep renting my place for $9900 a year in a metro area of 3.5 million, I’m not tripling my housing costs just to get ‘equity’, I’ll dump the extra 20k a year into VTI and come out ahead in the long run, equities don’t require roofs or furnaces.
If you live in it, you pay (or lose) imputed rent anyway. If you currently can rent for lower than the cost of capital, you are ahead (except for taxation, which does change the equation - cost of capital for investment is cheaper, usually, than for home residence due to tax incentives).
That is a big if, and there are lots of different ways things can turn out. God doesn't advise me, so only time will tell what really happens...
Home prices, maybe. But rents (aka housing)? AFAIK it's kept pretty consistent: https://www.aei.org/wp-content/uploads/2020/01/cpi2020-875x1...
These are the best value apartments in this area. The new ones they built down the street have a $3300 list price for a 3bd.
This is an affordable midwest area.
The bigger issue is the fact that all new stuff is not significantly different or better, but almost 3 times the price. The floor is falling out.
Out of curiosity, what was the comparable rent in 2005/before the crash in 2008?
The landlords' operating costs haven't gone up significantly either. They own the property outright, the same maintenance crew is around, they're down a leasing agent and manager from a year ago, and property tax increases are capped in this city. Any rent increase they can push beyond inflation directly lines their pockets.
aka, they are charging the market rate, which other people in the market are willing to pay for the use of the building.
The increase in rental income for landlords mean that there should be pressure to build more buildings to let out. Market forces _should_ cause stablization, if only it is allowed to work long term. Short term, there will be pain, because you can't build a new building instantly, but this pain is what causes new buildings to spring up. Market-distorting forces, such as building density/height regulation, and local residents' complaints (NIMBYism) is the cause for the lack of stablization imho.
This is an understatement. My mother's neighbor sold their house within 2 hours of it going on the market and for $20k over the asking price just last week. There are realtors asking around my neighborhood if anyone is getting ready to sell because there are buyers looking to purchase in here. This is even with developments going up like crazy. This is in a northern state away from the big cities.
> Also, inventory is drying up because construction has been heavily affected by the pandemic.
Not around here.
If the builders haven't locked in their supply chain yet you'll see it in the coming months. At the moment there is very little slack in the supply chain.
I have to wonder, though - where are the people who are selling their homes moving to? They're stuck in the same insane buying spiral everybody else is.
With Covid rules, you get ~15 minutes to view a property. You basically have to decide to put an offer down as you are walking out the door. My SO and I saw a place we liked and were considering an offer. Before we could even drive home, the place had gone under contract. Our location has homes on sale for ~36 hours, starting Thursday at noon (it seems that's the time most have settled on). You cannot sleep on this decision, there just isn't the time to do so.
Sellers will get ~14 offers, all very much over asking. A property listed for ~$450k go for ~$550k now. ~$650k go for ~$800k. Three years ago, that same house was ~$400k.
To be competitive, you must waive inspections outright. Health and safety objections used to be a thing, but it's so competitive that you just can't anymore. Inspectors are booked for showings as a result, with ~15 min to check on things.
All cash offers are ~1/3 offers, per what my RE friends say. If you are doing a mortgage, the new time to close is ~20 days, not 30. Banks/credit unions are not having a fun time with such a crunch, as buyers are walking away for higher rates due to the time crunch and the very low rates to begin with.
Appraisal gaps are ~18% or so. Meaning that the bank will appraise the house for about the listed price still, but buyers must state they will cover the gap in price. That is ~18% more than what the bank will give out. Thus the 20% downpayment becomes the appraisal gap coverage. A lot of people are going to 5% down-payments or less.
Open-ended escalation clauses are a thing to. You just put in the contract that you'll automatically bid ~$5k over the next person, no ending, no need to contact. As such, things are getting pretty wild when more than one party has that in their contract.
They really cannot build houses fast enough, and those that are come with special taxes that are ~2x the normal ones, forever. This is due to the need for materials that Coivd has affected and the speed needed just to lay the pipes and roads. Again, inspections are waived to stay competitive.
Like I said, it is super-bananas.
EDIT: This tiktok is only a tiny bit hyperbolic about the current state of things: https://www.tiktok.com/@johnsonfiles/video/69529306172982919...
Thank you for the insight. It's a fascinating comment. I wonder if it's the same in other countries.
That said, Canada is in a similar situation despite the pandemic (or maybe because of it?) and the housing costs there are likewise crazy, if not more so than in the US.
The wait and see camp is probably most people, but those that aren't comfortable with their home situation and being stuck in it are likely itching to move.
In addition, if you waive all financing and appraisal contingencies that’s often called a cash offer as you’re obligated to close even if you can’t get financing.
Before these times, cash offers came with a slight 5-15% discount because of the convenience and speed. Now, cash offers are overbidding other cash offers who are overbidding conventional loans. This happens in the hottest markets; South Florida for example.
Appraisals are made by the lending institution. That would be a very obvious conflict of interest otherwise.
Depends. The new timeline is ~20 days to close in this market. Banks are getting huge pressure to up the tempo. Interest rates are so low that an extra 0.5% is worth it for the faster close.
1. There's no financing to approve. Pre-approvals fall through all the time, and the seller knows that. They'll take cash to avoid having to start over.
2. Appraisals are coming in low right now because prices are changing so quickly that finding good comps is hard, and lenders cannot or will not loan for more than the appraised value. This could lead to the seller having to either start over or accept a lower amount. A cash offer is usually not contingent on an appraisal.
How is that a good thing from a seller's perspective?
It means the deal is more likely to close and not get held up by financing, and the seller might pick it over a slightly higher offer that does have a contingency.
Something will have to give eventually. We're going to get to the point that only hedge funds and millionaires can afford to own houses in mid tier cities and just compete against themselves. This is no way to build a community anybody actually wants to live in.
The insane market speculation going on is also a symptom of this. It's reasonable to assume USD is losing 8-10% of its value every year from 2020 onwards, thanks to Fed policies. I know about their bullshit CPI numbers, and anyone who is gullible enough to believe "there is no inflation" deserves what's coming.
Even 4% actual inflation would be very very high, as that would be 2% per year over CPI, which would compound to 80% over the CPI in just 30 years or so.
Let's take a look at some actual values: - the big mac index shows inflation at about 4% for the last 20 years. - Cape shiller housing index for US has been showing inflation at about 4% over the last 20 years. This is a real problem that will affect rents as well because the rent to own ratio spread can't continue to increase forever.
- housing of course is now 10%+ over the last year.
And yes, those quality adjustments made by the boys in the labor department are very questionable: I don't know how they sleep at night.
If there is runaway inflation, real estate would be a good hedge. Inflation is not really a concern for Americans because all global wealth tends to be measured in US dollars anyway. It's not like Americans become poorer due to inflation, because all their wealth is denominated in dollars.
Edit: found this quote from the creator of Shadowstats that they don’t actually calculate their own inflation numbers, but instead add a fudge factor to the official numbers. http://econbrowser.com/archives/2008/10/shadowstats_res
very easy to lie with stats sometimes.
New products, better products, many old products replaced by new ones... it’s so much more complicated than the classical economics textbook case of guns & butter.
I’m struggling a bit with this. Isn’t “inflation” defined as the state where prices for the same good keep going up?
It seems to me you’re focused quite narrowly on currency inflation, which like you point out isn’t that much of a concern for the average American. What they care about is inflating prices of the things necessary for a decent living: food, housing, utilities, clothing, etc. “I have to do more work to afford the same things”. Colloquially, that’s the fear most people are referring to when they discuss “inflation”. Maybe people who have actually lived through inflationary spirals think of it differently though.
Belt-and-Road has a decent chance of succeeding here, imo.
Definitions: There are two sources of demand for USD. One is the ability to purchase oil, and the other is organized international crime. I would consider crime a fair-weather investor, so the big demand for USD is really based on the ability to purchase oil.
First, examine the history of shipping tonnage [1]. Observe how quickly Chinese ports have come to dominate all world shipping. This is representative of the general trend of global supply chains coming under the centralized control of the Chinese government. Nothing presently happening in the US will improve our trade balance in the near term.
Second, examine the beneficiaries of belt-and-road [2]. All of these countries will have an incentive to have reserves of CNY. Some of these countries are significant oil exporters. If oil exporters start hoarding and regularly trading in CNY, then it's a small stretch for, at least some of them, to start trading oil for CNY.
Third, since oil is fungible, any nations trading oil for CNY will peg oil to the Yuan in addition to the Dollar.
Fourth, the governments of some nations, notably Iran, publicly believe that petro-dollars have motivated the government of the US to engage in warfare in and near their countries. They are furthermore publicly opposed to this, and publicly supportive of China ousting US hegemony.
Then, my argument. Belt-and-road gives a large number of nations a reason to hold and trade in CNY. It's a small stretch for some of those nations to start trading CNY for oil as well. Belt-and-road nations will have an expanded connection to the Chinese military, and success of belt-and-road is a face-saving issue for the Chinese government. That means efforts to oppose it could spark military tensions with the Chinese. This makes it plausible that wars to preserve petro-dollars are unlikely to succeed in belt-and-road nations.
There is almost no international demand for USD to acquire US produced goods or labor. This means USD is unlikely to succeed in an environment where it has to compete with CNY as a reserve currency for oil.
[1] https://en.wikipedia.org/wiki/List_of_busiest_ports_by_cargo...
However, how can you say there is little demand for USD for US produced goods or labor?
https://en.wikipedia.org/wiki/List_of_countries_by_exports
The US has a higher nominal export value of any country except China. Both economies are not highly dependent on exports, but their economies are so huge that they still dwarf the next highest countries on the list.
I guess I'd say that while we export a lot, we import even more. We have a trade deficit with all of our largest trading partners.
https://worldpopulationreview.com/country-rankings/us-trade-...
This is possible only because of the general demand for dollars. If the demand for trade with the US was based only on our goods and services, then we couldn't import as much as we do. If demand for dollars dried up, then our spending would be constrained and our quality of life would drop. So I think, anyway.
Also, fiat currencies can fluctuate against each other and still go down as a group. The Dollar can get “stronger” by losing value slower than other currencies. From a straight-forward point of view, wealth is denominated in dollars. But in reality, it’s denominated in value, in good things you can buy.
By this definion, we’re all richer than Crassus in some ways, affording things like global connectivity and vaccines with ease. In land, gold, and influence old Crassus was still in a league of his own, however.
What of the nearly 40% of Americans that can't cover a surprise $400 expense, due to having no wealth?
https://www.cato.org/blog/it-true-40-americans-cant-handle-4...
The survey actually states, "Four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money." https://www.federalreserve.gov/publications/2018-economic-we...
Nevertheless, that doesn't strike me as having wealth.
I borrow money all the time when I could easily pay cash. Credit is more convenient and doesn't cost me anything. Similarly, I have a car loan even though I could have paid cash for the car. It is sensible finance.
Similarly, I put all of my daily expenses on credit. I pay off all of that credit at the end of the month. I am still borrowing money but I am paying no interest on it.
The problem is that it's impossible to tell what's actually going on due to this survey design. For example: what is the overlap between the set of people who check "just pay it out of checking/savings" (50%) and the set of people who check "charge it and pay off in full at the end of the month" (36%)? I would rate both answers as "these people have the $400 on hand". The fraction of people who checked at least one of these options is somewhere between 50% and 86%, depending on how much overlap there is. And you can't tell, from this survey, where it lies in that range.
Similarly, you can't actually conclude the "Four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money" thing from these numbers, so the executive summary is rather misleading. Politifact takes that summary as an accurate summary of the survey results, but it doesn't seem to be. As far as I can tell, that 40% comes from adding up non-mutually-exclusive percentages. It's the equivalent of claiming that 86% of people would just pay it off based on the above 50% and 36% numbers.
I should also note that the survey included full-time students under "adults", and if I had an unexpected $400 expense at various points as a student I would have absolutely had to borrow money to cover it. Looking around briefly, there are ~20 million full-time college students in the US as of 2020, which is ~6% of adults. While it would obviously better if college students had larger cash cushions, a college student borrowing money from parents to pay $400 is not the mental image most people have when reading the executive summary here...
Now the fact that no matter how you slice these survey results no fewer than 8%, and maybe up to 50% of non-college-student adults don't have $400 on hand if they need it is still a significant problem from my point of view. Especially because I really doubt it's as low as the 8% option. But I am also quite certain it's nowhere close to 40%....
The report plainly states:
> When faced with a hypothetical expense of only $400, 59 percent of adults in 2017 say they could easily cover it, using entirely cash, savings, or a credit card paid off at the next statement (referred to, altogether, as "cash or its equivalent") https://www.federalreserve.gov/publications/2018-economic-we...
The 4 in 10 comes from the very next paragraph of the report:
> Among the remaining 4 in 10 adults who would have more difficulty covering such an expense... https://www.federalreserve.gov/publications/2018-economic-we...
and, from the very next figure in the report, none of the 4 in 10 would use "cash or its equivalent" to cover such an expense. https://www.federalreserve.gov/publications/2018-economic-we...
From this data, it is reasonable to conclude that "Four in 10 adults would not use 'cash, savings, or a credit card paid off at the next statement' to cover such an expense."
What I don't understand is what the report bases this claim on. The actual questions asked and answers given that correspond to the conclusions you link to are presented in https://www.federalreserve.gov/publications/2018-appendix-a-... and https://www.federalreserve.gov/publications/2018-appendix-b-... respectively, and the only questions I see that involve the $400 bit is are EF3, EF5B, and EF6B.
Now it's possible that there is additional data that they have but are not presenting in the appendix but are using to generate their conclusions, including data like how many people marked both "pay with cash" and "pay with credit card now, pay off at next statement". If that's the case, I wish that data were actually available.
For example, given the "could easily cover it, using entirely cash, savings, or a credit card paid off at the next statement" phrasing it's not clear to me how they code someone who checks both "pay cash" and "borrow from family". Are they included in the 41% or the 59%? Or were there just 0 such respondents so this is irrelevant?
I would love to trust that people are drawing the right conclusions from their data, but would really prefer that raw data were published so the conclusions can be indepedently verified...
Since dollar prices of final goods and services can be tracked, and don’t show that trend, its not reasonable at all; nominal price levels of goods and services haven’t generally increased by about ~2.5× over the past decade.
> I know about their bullshit CPI numbers,
CPI is BLS, not the Fed. And its a whole lot less bullshit than what you’re spreading right here.
> and anyone who is gullible enough to believe "there is no inflation" deserves what's coming.
The idea that inflation might be coming at some indefinite point in the future is, of course, unfalsifiable, and its been a constant refrain from the same segment of society for as long as I've been alive.
The claim that there has been massive inflation since 2010, OTOH, is both falsifiable and false.
Depends where you live and what lifestyle you live. If I took the total amount spent on all the things and services I have purchased over the years and compared them to their price in 2010, I would have spent far less in 2010. Spending on land, healthcare, retirement savings, taxes and education eclipse the total spent for everything else.
Is that not inflation (for me, at least)? All I know is that to buy the things I need or want to buy in the future, I need to ensure I am earning more and more because I am betting the price will be higher in the future. At least it's been true during my adult life of ~15 years.
buying land as an asset is not spending - it's investing.
Healthcare+education - i agree, it has become more expensive overtime.
Taxes - you earn more, hence pay more taxes. It's not due to inflation.
Retirement savings - ditto with land, it's an investment, not spending. And you choose how much to invest here, and the increase is not due to inflation (but expectation of inflation might affect your decision, but that's not a causal relationship to inflation).
>buying land as an asset is not spending - it's investing.
It's an expense for people. They need to spend money to purchase land to live. If the land you're interested in living on goes up 100%, you need come up with the extra money you're going to need to spend in order to purchase it. It has to be factored into your budget. You can model it as an investment for some purposes, but when I need to figure out how much money I need to come up with, it's clearly spending.
>Taxes - you earn more, hence pay more taxes. It's not due to inflation.
Tax rates can (and have) gone up for me.
>Retirement savings - ditto with land, it's an investment, not spending. And you choose how much to invest here, and the increase is not due to inflation (but expectation of inflation might affect your decision, but that's not a causal relationship to inflation).
If you predict you will need to $5M at your retirement date rather than $4M, then you need to spend more of your income on your retirement savings, but the important point is you will have less money for other things. What is raising the retirement age, if not inflation?
Benefits have continuously been reduced since I was a child, and I see no reason for that to not continue. There will be more and more means testing, which means if you have something that can be taken, and you can't politically defend it (I estimate roughly for those in the 80th to 95th percentiles), you should expect to pay more.
Yes. Absolutely. I saw an interview of someone who talked about living in the 60s. He was saying how a painter could own a home, afford a wife and six kids with no problem without the wife even working a 2nd job. Today, a single painter could barely afford himself, let alone a family of six and a house. I know it's anecdotle, but the difference is so vast and stark, I think it's obvious there's been a huge difference in quality of life over the last 60 years.
Obviously, some of that you can't avoid. No one is making 1000 sq ft brick homes anymore for new homeowners, so you don't have an option of a small, cheap home in many areas. You only have the option of the bigger, more expensive home. But some of it is a personal choice. I think there is something to the argument you're making, but I also think people are underestimating the frugality of people in the past.
The bigger home is inherently cheaper, though. (At least, in the US).
A ~1800sqft new home (the average new low-end build out here in the midwest) takes way less resources and labour to construct than that old 1000sqft brick home did. Houses today are made out of the cheapest plastic and twigs (many don't even have a single piece of real wood in them anymore). Houses back then used bricks and real-wood timber (expensive to purchase, expensive to move, expensive to lay, etc). Your old brick house probably had expensive copper pipes, new builds use plastic PEX straws so cheap they're practically disposable, and so on.
Homes built today are made using far less labour, less materials, and far cheaper materials than before. If land and asset valuations had stayed consistent, homes today would be drastically cheaper than before. Yes, homes are "bigger", but those extra open empty spaces cost practically nothing extra, the fixed costs are mostly fixed and the variable costs are trivial.
I can guarantee you there are effectively zero millennials living with their parents or with roommates in a small apartment who would turn down the chance to own an affordable small home.
Or, more neutrally, our standards and expectations have changed from the 1960s. If you want the 2020 life on the kind of job that got you the 1960 life, you're in for a disappointment.
I live in 500 square feet, don’t go anywhere(like to a bar) and don’t have a car. I don’t have kids.
Well, the single-family detached suburban California home I bought as new (not complete when we signed) construction in 2006 was 997 sq. ft. on 0.1 acres, so other than “brick” that was certainly possible to find new not that long ago.
You have to remember, those new homes are only bought up by about 1% of the population. So, to say that 1% can afford much larger homes is not saying much about the other 99%.
Which is precisely what's been happening. Just take a walk around any major urban center in the U.S. There is misery in the streets. The opioid crisis is another manifestation of the same despair. Historic civil unrest, "eat the rich" / "billionaires shouldn't exist" rhetoric heating up. Etc. etc.
good point, there's basically no evidence[0,1,2,3,4,5,6,7] of misery across the american population.
0 - https://en.wikipedia.org/wiki/George_Floyd_protests
1 - https://en.wikipedia.org/wiki/2021_storming_of_the_United_St...
2 - https://en.wikipedia.org/wiki/List_of_mass_shootings_in_the_...
3 - https://en.wikipedia.org/wiki/Capitol_Hill_Occupied_Protest
4 - https://en.wikipedia.org/wiki/QAnon
5 - https://en.wikipedia.org/wiki/Militarization_of_police#Unite...
6 - https://en.wikipedia.org/wiki/Student_debt#Social_and_politi...
The opioid epidemic is potentially a real indicator of immiseration (not the same thing as misery btw), but I don't know much about it.
Please, allow at least a little breadth in the scope of rhetorical wordplay: immiseration is fundamentally about misery, and the links I gave are examples of the broad misery felt by the average American. That misery is not sourceless: my entire point is that that misery is due to the increasing relative impoverishment of the average person.
On the surface it is just misery, but when you think about the causes, it is apparent that it is immiseration, in the jargon sense: the people are poorer than they have ever been, and they are visibly angrier and more upset because of it.
0 - https://en.wikipedia.org/wiki/Immiseration_thesis
1 - https://en.wikisource.org/wiki/Das_Kapital_Volume_One/Chapte...
Happy, wealthy, comfortable, safe people who believe a bright future is in store do not take to the streets, burn buildings down, and get into large scale fights with their local police force. They don't throw bricks through coffee shop windows, hang out in tear gas clouds, or crowd up during a pandemic.
Their willingness to do so, over clearly expressed feelings of hopelessness and loss of control or participation in the system, over a feeling that they are losing out overall, it's coming from a place of desperation. It is coming from a place of misery. You've got to be pretty miserable if you think fighting the cops sounds good.
I'm sorry that you see very little connection there. It may unfortunately be that you see very little overall, or that you're intentionally looking away.
> Happy, wealthy, comfortable, safe people who believe a bright future is in store do not take to the streets, burn buildings down, and get into large scale fights with their local police force. They don't throw bricks through coffee shop windows, hang out in tear gas clouds, or crowd up during a pandemic.
Yeah, see, they could be wealthy, and still not safe because of skin color. That's the point of the George Floyd protests. If you see people like yourself getting shot by police for reasons that seem absurd, over and over, you don't feel safe. You don't believe in a bright future. You aren't happy. And economics has very little to do with it.
[1]: https://www.reddit.com/r/stupidpol/comments/lq7kvq/a_recent_...
After all, most people feel safer driving than flying. They're simply, wrong.
I wanted to acknowledge the possibility that our respective political beliefs, whatever they may be, might lead us to look for different types of issues in different places as root causes.
My own beliefs lead me to characterize choosing to believe that economic inequality is not integral to the Black experience in America as tantamount to wilfully ignoring a root component of the problems people face. If that belief is insulting to you, we may tragically be living in different worlds of experience, and might not ever have a meeting of the minds. That's what I was going for.
Despite that concern, from what you said, it seems like we might actually agree on a lot -- as you put it,
> If you see people like yourself getting shot by police for reasons that seem absurd, over and over, you don't feel safe. You don't believe in a bright future. You aren't happy.
That sounds spot on to me, and I absolutely agree that the fear of violence affects wealthy Black Americans too.
Regardless, the outpouring of rage from the community certainly transcended just the fear of violence from police. Violence is one particularly horrifying aspect of how the system hurts people, but people are being crushed all over, and people are mad about all of it.
Here is one quick example[1] of this being stated, sourced in one of the Wikipedia pages I originally linked (which explicitly lists "inequality and racism" as a cause of the George Floyd protests). This article is an interview with the Surgeon General of America, and says:
> The surgeon general pointed to Covid-19 disparities and other health care gaps among communities of color including maternal mortality rates and the opioid crisis, saying these issues and the frustration surfacing across the country are intermingled.
> “It's on the top of my mind as a black man, as a father, as a brother, as a son,” Adams said.
The brutality of the police is certainly the salient, focusing point of the protests, but the overall causes and broad outpouring are larger than that. The protestors have often called out the broad systemic aspects of racism, like healthcare access, home ownership rates, debt levels, access to quality education, and investment in communities of colour. Those sorts of things impact Black people's lives daily on scales far greater than police brutality, and they are economic issues at heart.
Police violence is uniquely horrific in its instances, and is the central igniting issue here, but the issues as a whole are much bigger than it alone.
1 - https://www.politico.com/news/2020/06/01/surgeon-general-pro...
In mid 30s, all women, all have bachelors and have been employed long term, 3 of the 12 are married, 2 of the 12 have children, another 4 are paired up with long time partners, but there was a palpable unease and underlying depression about the future income prospects and lack of security about where they would be able to live.
There are plenty of places in the US where housing is still affordable. Sure, maybe it’s not your first choice and maybe you won’t be keeping up with the Jones’.
Places like Austin, Denver/Boulder hell, even Seattle were affordable not that long ago. But they weren’t cool (which is why they were affordable). Suddenly they become desirable, housing prices go up and people complain they can afford to buy where everyone else is buying.
And “can never afford” seems like an extrapolation of the last ten years ignoring corrections that came before that.
For those of us who lived through 2008 it’s amazing how quickly we went from “i’ve never over pay for a house again” to “housing only goes up”.
Seriously, like lets say 100k combined income yearly. Save 20k/year. Should be fine for a downpayment on a 200k-400k house.
And that's all if you can live in a small-town-enough place where homes "only" cost 400k -- in many cities in the last 5 years (i.e. places where there are easy jobs to find), that's just not a realistic house price anymore.
I was a brick/stone-layer's labourer back around 2005, and we built a home that cost ~400k at the time, on the edge of a mid-sized town in southern Ontario. It was a mansion. Stonework, 4-car garage, big lot, 3 stories tall, 5 bedrooms, 3+ baths, the works. Today, I think that house we built could sell for ~1.5-2M.
Where would you need cars and have to pay 2-3k for an apartment?
Prob like 1.5K/month, two economical cars. Pay off debt and build a nest egg, married at 30, kids at 32. Cook cheap and healthy meals. Outdoors for fun. No big drinking or expensive hobbies.
They can easily make it happen if they do the above.
It’s not my fault that people can’t prioritize and strap down.
Have you been watching the news lately? Keep watching. Violence and deaths of despair are skyrocketing and will continue to.
Home Values +8%
Money Supply +24%
Stock Market +23%
Oil +80%
Corn +69%
Steel +145%
Wheat +25%
Coffee +34%
Cotton +35%
Copper +50%
Lumber +126%
Soybeans +71%
this is over the past year.
https://tradingeconomics.com/commodities
The numbers below are one year commodity price gains, as of today rounded to the nearest tick (view the individual graphs, 1 year timeframe as % gain):
Crude Oil +25%
Corn +70%
Steel +50%
Wheat +25%
Coffee +35%
Cotton +20%
Copper +60%
Lumber +200%
Soybeans +70%
It doesn't really. If you track your expenses consistently over the years (gnucash et.al.) you can trivially plot the increase in cost of living and the acceleration of that increase last handful of years.
They're also anonymous, so you should assume the worst. This is especially true when the supporting evidence is suspect (ie. a bunch of arbitrary picked numbers). On the other hand the BLS's methodology is documented (https://www.bls.gov/opub/hom/cpi/), so I'm willing to give them a pass even though their incentives might be skewed.
>(what would it be?)
their beliefs? "agenda" here doesn't have to be something nefarious. an anti-vaxxer's agenda is anti-vaccine, but that doesn't mean they're scheming to get everyone infected.
Are you willing to bet money on this claim? Because I will happily take the other side of that wager. It is absurd.
WTF is going on, if not inflation? (serious question, I'd like to know what other explanation there could be)
Regarding inflation, anecdotally food etc prices in Toronto seem much higher this year than last, and did last year too, but the CPI data doesn't share my opinion.
0 - https://betterdwelling.com/canadas-money-supply-is-growing-a...
1 - https://economics.bmo.com/en/publications/detail/76f0b0ca-c0...
US CPI tells me they should only be 35% higher. LOL. Bullshit.
https://i1.wp.com/www.denverpost.com/wp-content/uploads/2021...
There is an entire segment of our economy (the FIRE sector) which is based on running these operations as ponzi schemes, and they are both funded and then bailed out by massive acts of private debt-as-money creation - it is like a recurring Marshall Plan, which guarantees the major players can always outrun the ever-looming debt crisis which is engulfing we, the little people.
The point is that we never have to actually fix the debt crisis or solve the problem of stagnant wages and decreasing demand, if balance sheets can always be corrected with fresh currency injections at the highest levels. Maybe you saw the gent on here who posted the Atlantic article about private firms owning 1 in every 5 American houses.
Yet your analysis would seek to use these (home) prices as an innocent, quasi scientific marker of the purchasing power of the dollar. I get the motivation there - housing is a key basis of human experience. But there is so much market manipulation going on in these asset classes that using them as a measurement of the value of the dollar is IMO not correct. The most powerful corporations around have chosen to backstop some of these assets, and that has supported a speculative boom on the part of anyone who can get bank money to 'invest' in bidding up property prices. Price discovery does not happen in that scenario, because everyone is buying things with the Bank's money, not their own. And if they don't buy it - guess what? The Bank will. Through a shell company, basically. These are some reasons not to measure the dollar's purchasing power by looking at the price of housing in America.
A modern iPhone, price converted into 1970s equivalent technology, has many millions of dollars of 1970s technology on it [see YT link below]. Now available for 600 dollars. An older gentleman I was speaking with yesterday told me about how nickels and dimes had become worthless.. indicating a decrease in value of the American currency. On his lap he was holding, what would have been for the era he had in mind (60s), a sleek, miniaturized supercomputer. These are now available for less than 1000 dollars with a monthly operating cost less than 100 dollars, including power. The same 10 dollar bill that in the past might have bought more food, now buys an unending amount of technical gadgets and do-dads mass-produced from the Chinese market, which can be shipped to one's doorstep for either free or an additional 5 dollars. Those products and markets didn't exist or were not open in this golden age of nickels and dimes he was referring to.
I may have misread your comment, but if you are leading me down a primrose path to speculate on the relative worthlessness of the dollar, because some asset prices have increased - I'm not going there. I've seen people parroting these arguments for 20 years now online. Stocks and housing are special cases. Cars are actually also weirdly price-fixed to support the auto industry. Everything else is getting relatively cheaper. This guy has some worthwhile thoughts on it: https://www.youtube.com/watch?v=dSw41MqPFoM
It's not inflation. It's classic supply and demand.
I assure you, they are. Also you're way out-of-touch with common sentiment if you think the suburbs aren't desirable, if for public school quality if nothing else (for the record: I hate the 'burbs). Source: I've bought several houses in my city (serially, I'm [sadly, in the current market] not a property investor or landlord) since the '08 crash, all in the 'burbs, keep up with a couple real estate agents, and have had many friends and family buy all over the city over the same time period, including within the last year. There's been non-stop, extensive housing construction for damn near a decade now, and prices are still doing this. People are being bid out by over-asking cash offers on day two of a property being on the market in very mediocre areas. Lots are selling over-asking in the same manner. It's nuts.
Also, if it's not inflation and is "classic supply and demand": what's up with all other assets then? If demand for all assets is up, such that prices are all way up, even and especially through 2020, what do you call that? Housing was just an example.
If all assets are going up, seemingly nonsensically, what is that? It's a really, really broad-based bubble, or it's the leading edge of an initially-unbalanced-but-surely-it-won't-stay-that-way inflationary wave, no?
There are exceptions, like energy companies, for example. IIRC Exxon went up in the 1970s while the market as a whole stayed flat and lost value relative to the USD.
At the extreme, in the Weimar republic, the stock market did what the US is doing today... until the stocks flatlined relative to the currency[1].
[1] - Haven't read it but sources that claim this point to this book (I just bought it though, it's only $3): https://www.goodreads.com/book/show/8567383-when-money-dies
Also, inventory is drying up because construction has been heavily affected by the pandemic. Now that the warehouses have been exhausted it's just starting to ripple through supply chains. While the millions of lives lost were felt immediately the long tail of JIT supply chains means we'll be feeling the effects a hell of a lot longer.