Inflation – the artificial (because created by those who control the supply of money) decrease in the purchasing power of money – is bad but at least you can see it. As at the supermarket checkout line, for instance. As reflected by the cost of a new car. As by pretty much everything that is bought and sold using this jiggered-with money we’re all forced to use by those who somehow managed to acquire the legal power to force use to use this jiggered-with money.
But there is something that works in tandem with inflation that’s even worse because we generally do not see it. Herewith an example of that, which I know about because I experienced it.
Back in 2004 I sold the small house I used to own in Northern Virginia for $400,000. It seemed like a lot of money for someone else to pay to own a small house on small lot in a kind of backwater neighborhood a long (hour-plus) commute into the heart of darkness, Washington, DC. I felt bad for the person who bought it because shortly after he did, the bottom fell out – of the real estate market – and what he spent $400k to buy was all-of-a-sudden a lot closer to what I’d paid for it many years earlier.
As recently as 2017 – 13 years after I sold the house for $400k – it sold to someone else for $420k. At a relative (as well as real, as in where it hurst) loss, in other words. Because that $20k increase was more than offset by the loss of the buying power of money during that time.
Well, I looked up my old house the other day and found that it is currently valued – if you want to use that word – at $650k. That seems like an increase – a big one – doesn’t it? Especially since it occurred over about half the time it took for the house I sold for $400k in 2004 to increase in value (sic) by $20k, on paper that is.
But is it, really?
I decided to see. I pulled up the Bureau of Labor Statistics CPI (Consumer Price Index) inflation calculator and found that the $400k my house sold for more than 20 years ago is equivalent to $681k today. In other words, the value – big cough – of my old house in Sterling, Va – did not increase by $250k over that time period.
It decreased – in real terms – by about $30k.
But – nonetheless – whoever wants to buy that house today will still have to come up with $681k to buy the house. More finely, they will have to come up with 10 percent of that, to secure a mortgage – which is about $130k in cash money.
For what was – once – a first house bought by a young guy (me) in his late 20s. Which my younger self was able to do because 20 percent of what my house cost when I bought it was less than 20 percent – cash money – of the $130k (cash money) that a person who wanted to buy my old house today would have to come up with. That guy is probably a guy about my age now. That is to say, a middle-aged guy who is probably not just starting out – though in a way, he kind of is – isn’t he?
No wonder people in their 20s are depressed – and angry – today. They have to come up with more (a lot more) to get the same (and less).
All brought unto them by the very government they seek “solutions” from. And they’ll get them, alright.
Good and hard.
. . .
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It’s always a great time to buy” sez the Real Estate Vultures.
Daughter and family first house 2006 Hope Mills, NC. Nice house, nice neighbor hood.
Moving due to Army assignment rent it out 2009. POS renters messed it up but good, rental mgmt company useless. He’s overseas, she’s in Alabama and flys back to Hope Mills to fix the house in 2011. Thousands out of pocket to get it saleable. No increase in value, the net to them after vulture fees and restore costs is negative 12k.
The Alabama house fares much better as a rental they almost break even on the rent and renters are responsible (Army officer class). Lightning screws up the electrical a couple thou to fix it. Sell in 2019, minimal increase in value “only” a negative 3k at closing to sell this one.
Arrive home in WA to settle in, with a negative 15k from home ownership over about 14 years. Yep, what a great way to gain net worth, uhh huh.
“Well, you can sue to recover, right Sparkey?” Good luck. Rental management will deny responsibility, the law enforcement cares nothing about blatant vandalism, and the NC lawyer was quick to collect his money but molasses slow to get anything done about a judgement on the POS renters. Then how would you even collect after they skip town? Nothing ever happened in the kid’s favor and the gov you pay property tax to is useless.
For the future, even without the current bubble, who will be buying the glut of houses once the Boomers depart? That “pig in the python” glut is heading for the exit.
“For the future, even without the current bubble, who will be buying the glut of houses once the Boomers depart?”
Black Rock. For about 2 cents on the dollar.
Hi Sparkey,
My sister had a similar situation with her rental house in FL, tenants trashed the place and stole the appliances – washer, dryer, fridge – when they left. My sister took them to court hoping to at least get back the appliances but got bupkis. In fact the judge told her afterwards that she was lucky that was all they did; guess he’s used to dealing with lowlifes.
That judge needs some wood shampoo.
That’s why you never pay full price for anything. Everyone should know housing is an expense and not an investment, and yet working people still pony up literal millions for a place to eat, sleep, crap, and screw. I own a bunch of properties, I bought my home, a dilapidated 100 year old thing, for 36k when homes in nearby cities were already averaging 350k. Then after you put your entire life and future on the line by overextending yourself, you tend to obey, do whatever every government and boss tells you to rather than living like a man.
My rental properties also cost me an average of of 11k. Yes, I do have to spend some time and money making them really nice, but it isn’t as much as you’d think, especially if you pay someone else to do your work.
A house is an investment only if it’s cheap, and paying full market price means you’re speculating on a greater fool parting with his money in the future.
It’s a real shame what is going on with inflation. You try to talk to people about this just like the Covid-1984 or climate change scam and they look at you like you have two heads. It’s not easy to get young people to join our office because house and rental costs are so high. I’m middle aged in the middle of my career and I can barely afford to live here.
Inflation, which means an increase in money supply, has always been in the 15% to 25% range forever, It’s far worse now. The money changers are zapping up about a trillion every 2-3 months. That comes to about 4 trillion a year. As the ‘budget’ is around 5 trillion that means inflation is running about 80%.
The thing about inflation is who ever spends the newly created money (always corpgov) will get the ‘value’ of the present money. By the time it gets down to us ,,, well we are f***ed. They don’t mind, they hate us anyway. They say depopulation causes deflation… (the shrinkage of money supply). Nope,,, when someone dies that means more money available to the rest. Price increases are the by product of inflation,,, not inflation itself.
So if you want to believe their inflation numbers, have at it if it makes you feel better. Every citizen in this now POS nation is getting royally screwed.
Soon they’ll be taking us to war to get our minds focused on the war and not their mishandling of finances. All debt will be blamed on the war. A reset will occur or they will change the currency… then start inflating again. The one thing you can always bank on,,, humans never learn.
Maybe we are a POS nation. If you took away 90% of the government we’d be a pretty great place.
If we got rid of just 5 percent, it would be measurably better.
The problem is they do learn, and the lesson is that crime really does pay. The corollary lesson is that there is no consequence ever for your misdeeds.
Keynes got one thing right: The wage slave isn’t willing to do the same work for less money next year. All the technology that’s been implemented over the last 30 years has been a drastically deflating trend. When I started working everything was on paper, the bosses had secretaries (heck, I shared an admin assistant with the engineers), and computers were just starting to appear on desks. When I left big corporate most of the offices were empty, we could work pretty much anywhere with our laptops and mobile phones, and printers gathered dust. The cost of sending a bit from one place to another dropped by 99%. The cost of storing a page of text dropped even more than sending it. This trend continues, but has slowed down as we all have to catch up to the new normal.
Yet the cost of doing business continued to rise, mostly because the remaining workers had to get their annual 3% raise, and the cost of benefits skyrocketed. Never mind that real inflation was climbing at a much greater rate than 3%. The government was forcing us to take a virtual pay cut for the team. They got to spend, our employer got to profit from the higher margins, and everyone became an “investor” instead of an owner. Our paycheck looked bigger, but it wasn’t as valuable as it was. Health insurance is just a money grab by the mafioso.
Much like the “peace dividend” that never materialized after the Cold War, we really never got the benefits of the technology and telecommunications revolution. Oh sure we got a lot of free stuff, but at the cost of our privacy and rights. Government took our prize.
If people understood our money system, and inflation, there would be a massive revolt. But they don’t.
All of this inflation and corruption in all levels of government was directed against productive working class people……reform is impossible, the whole corrupt system has to collapse….hopefully to be divided into regional entities with regional interests and little or no ability to revive the MIC that has driven this country from relatively free to absolute tyranny in 160 years (since the so called civil war). The gloves came off from the time of Teddy Roosevelt and it’s been downhill ever since.
The tune will stop soon for this game of musical chairs.
Since you don’t actually Own the house you paid for it amounts to GovCo telling you what the rent basis is for a given property. GovCo is the one that benefits from higher property values and no one else. They must do this to keep the phoney-baloney pensions funded for the bloated, overpaid staffs they employ.
Factlette for my NC county west of Charlotte. Between roughly 1970-1995 the population grew by 19%. GovCo employment grew by 68%. These parasites are killing the host. Too bad we don’t focus on that. It’s nothing new. Aesop nailed it 2,500 years ago…
https://shorturl.at/RMDui
You should see the new police/fire dept./ems palaces they have built out here in coastal NC in the last few years. I’m sure that’s just the visible tip of the iceberg(s).
Those are areas that have a Fire Tax District. The ones that are still just “volunteer” are quite modest. The palaces that you see generally have great gym set-ups as well as excellent kitchen facilities.
It’s good to be the king…
$681k to buy your old tiny house? Wow.
No wonder the tiny home craze is all over the YouTube.
On top of that, a decent hand-sewn Buffalo Fur Coat costs
$5,700.00 – $6,500.00
https://www.merlinshideout.com/shop/apparel/coats-vests/buffalo-fur-coat/
…Bubble, bubble, toil & trouble.
Handsewn outerwear is the wtg. I love my lambskin gloves.
Hi Helot –
Yup. I know that house very well – because I once owned it. T-111 siding on a slab. Cheap windows. It was built in the early ’70s for working class people who could not afford a house in Fairfax or one of the “nicer” counties. Even as recently as the mid-late ’90s, the houses in that development – Sugarland Run – typically sold for around $150k. That’s roughly about $300k in today’s devalued dollars. But you can’t find a crappy townhouse now in that area for less than $400k.
There is a house in my area that is newly built, going for roughly $580K, just went on the market two weeks ago. It sure as hell is not worth more than $350K. Postage stamp size bedrooms, and the only upside is that it has a decent size garage, and five acres not barely two. For that much money, I want a bedroom I can actually stick my bed and a dresser in, and still not have to walk around sideways to get around. But some dumb fool will buy it. For as they say, “there is a sucker born every minute”.
Ouch. Six to seven thousand for a Buffalo coat? that seems like paying Filet Mignon prices for ground bison.
In Anchorage and Juneau, retail stores, catering to tourists, offer full length, mens grizzly bear and wolf skin fur coats for similar prices.
Real estate is in the biggest bubble of all time. At no time in history have values skyrocketed like they have, not without hyperinflation. So that could mean that the biggest bust in real estate may happen, no different than 1929, or 2009.
Scroll down Wolff Street blog to see the latest real estate charts: https://wolfstreet.com/
Since banks lend on home values, even a slight decrease, say a mere 10%, could topple most banks. That is the problem with bubbles, they go pop, the higher the rise, the greater the fall. What could really break the banks is rising interest rates. Banks are leveraged, the debt money system is a loaded gun, ready to blow out the system if prices were to fall. This is why scum politicians always fight deflation.
I have this prediction that if 30 yr fixed goes past 8%, it will be big news, and the start of the bust. When I went shopping for a mortgage for my first home, in Dayton, Ohio, rates were 18%, and all time high. My kids have mortgages around 3.5%, an all time low in the history of mortgages.
Anyways, since the Fed was created in 1913, interest rates have gone unstable. Up and down they go. They appear to be going up again, the new secular trend in rates is UP. And IMO soon to pass 8% like a bat out of hell. Why? Because 30 yr mortgages are set off long term USTreasuries, which are going up. Just this week the 20 T-Bond went thru 5%. Mortgage rates are that number plus 2%.
With the USGoverment of INSANE CRIMINALS spending money like there is no tomorrow, expect much higher rates. With a national debt 36 TRILLION and counting, a new trillion every 90 days I would say a whopping ass crisis is directly ahead. So IMO it is only a matter of time until the bond market revolts and demands much higher rates, like in any other banana republik.
When the crisis hits, you can expect Clowngress and he Selected God-King POTUS to do exactly the wrong thing, which will be to print even more money. Maybe Cash for Clunker Homes this time. They hate deflation, deflation is their #1 enemy. But it can happen if there is a shift in public attitude, when the people withhold purchasing because they have lost faith in the system. What we need is a reset, a jubilee, a 90% correction to make homes affordable again.
Hi Jack,
I sense the same. I’m no expert, but I don’t think you have to be to grasp that something is very badly wrong when a nothing-special little house in Sterling, VA is “valued” at over $600k. It’s even more absurd – alarmingly so – in CA. My sister and her husband live in an 890 square foot cottage built in the 1940s that has one bath and is in pretty rickety condition. It is “valued” at around $1.5 million. Eight or so years ago? $500k.
This cannot possibly continue.
Eric,
As the Fella once I said, that which can’t continue, won’t…
Eric,
It seems like it will continue indefinitelty..Private equity, with unlimited access to free money will continue to scarf up houses, driving prices ever higher withiut end. I dont think it matters if mortgage rates go to 20 percent. The average person doesnt even rate in this market.
In times of old a new king could declare a jubilee, with debts canceled and prisoners /slaves released. It provides the only cure for the ills of compound interest and bureaucratic creep. Since there are always more debtors and prisoners than creditors, it is an easy way for a new king to make sure he has a lot of supporters.
Trump is not a king, but were there some mechanism such as a national bankruptcy and a national emergency where normal rules are suspended, a year of jubilee and a new currency backed by tangibles like gold and silver would go a long way toward averting the crisis we are in.
The federal reserve has to be destroyed money needs to stop being issued as NOTES (read: DEBT) and needs to be issued as CERTIFICATES (as in, it is CERTIFIED to be backed by x amount of gold or silver).
If we go back to printing CERTIFICATE MONEY instead of NOTE MONEY, and BAN INTEREST, we will enter a new golden age the likes of which you can’t even imagine. But that’s what Hitler did when he took power, and that’s why the Jews sicked all their dogs on him.
People wont buy because they cant. Basic necessities and communist taxes now eat up their entire income, and will exceed it.
My county in NC is doing a property tax revaluation this month. The last one was in Jan 2020. Houses are selling for minimum doubke what they sold back then. Scary math for taxes. The new buyers see it as a justification of their spending. See what my new house is worth? Yeah, just like your groceries are “worth” more these days. Can you say “getting ground down between the millstones of taxation and inflation”?
Hi Funk,
Yup. I dread the same happening here in my neck of the Woods. If it does, I suppose we can cash out and go elsewhere. But where can one go to avoid the same? I think the only way it can be done “sustainably” is if you can afford to retire and move to a very depopulated/unpopular place and live on what you’ve got until you die.
Then the problem becomes the hidden jewel you discovered, is suddenly popular with locust people who move there for the wrong reasons. You end up right back in the same place, older and less able to pull up stakes and move again. It happened to us over the last ten years. We’ve found a few nice places might be worth relocating to. Just not sure I want to go through the trouble, just to see it repeat in ten years.
This is where i see crazy things like my 1970s 12HP garden tractor being $2400 when new in 1974. Adjusted for inflation, it would cost over $16,000 today. Steep price to pay to mow the lawn, pull a small trailer and plough.
And people wonder why no one buys a tractor anymore. People cant throw car money down to keep up the property.
I think the sailboat life or houseboat would be a good option today for a young person aside from RVs. Heck, a full size barge can be had for 300,000. Stick a shack on there and a ramp for your car and you have mobile property.
Hi Anchar –
Yup. I need a new push mower because my old one locked up on me. What used to cost $150 just four years ago now costs $400 (or more). The riders cost what a good used car used to cost ten years ago…
i always keep an eye on the roadside. People throw away good movers all the time as they won’t start, usually the cause is bad gas and the carb needs to be cleaned. The old ones are better than the new ones.
I won’t lie, I’m not an EV fan, but having a small yard, I DO like my battery powered electric lawnmower.
I don’t ever have to get gas all over the trunk of my car lugging gas back and forth to fill it up. I can tip it on its side to clean it or take the blade off and oil and gas doesn’t leak out all over the place. I can mow my lawn without hearing protection.
The key to loving my cordless electric mower (a Greenworks, fwiw) is having enough batteries to do the whole yard. I think I have 6 or 8 batteries for my mower, so I can do my entire yard with that. With 1 or 2 batteries, unless you’re only mowing the treelawn, they’re otherwise useless.
I use a Lowe’s Kobalt brand electric mower. The one battery isn’t enough but an additional battery is expensive so I make do. Front yard and 3/4 of the back yard. Wait for battery to charge, finish the 1/4 left. Wash, rinse, repeat.
I get all my batteries for free, so no worries lol.
Hi Mike,
I have a couple of acres of front and back yard to do so an electric mower isn’t going to cut it for me! I found what might prove to be a good used gas one at a pawn shop and am going to try to swing by there this weekend to see it and maybe buy it – $50 – assuming I get my truck mostly back together! I got the new heater core installed but the dash is still all over the place…
My lawn is so small that I can do it with a push mower! I have a 14″ wide manual push reel style mower. I have a cordless weed whacker to do the trimming. I could use a small cordless mower and have juice left over.
What I REALLY love is my cordless snow blower! I have a small driveway and small patch of sidewalk, so one set of batteries (my Snow Joe cordless snow blower takes a pair of Li-Ion batteries) is more than enough to to clear everything; in fact, I can clear everything 2-3 times before having to put the batteries in the charger. The batteries take an hour or so to recharge, which is long enough to grab some hot tea and take a rest before clearing more snow again, if necessary. I also like that it’s quiet enough to use even late at night or early in the morning, as it makes the same noise as a vacuum cleaner; I can use it whenever I want and not be a bad neighbor.
Prior to that, I had a corded, electric snow blower. Using the cord was a MASSIVE PITA! When that blower died, I just put it out in the trash and got the cordless Snow Joe unit I have now.
Anyway, I don’t have to worry about bringing gas home for the thing. I don’t have to worry about putting in fuel stabilizer while it sits unused much of the year. I don’t have to worry about tuning it up, nor do I have to worry about getting it to a shop for said tuneup. I don’t have to worry about any of that stuff.
I also have a cordless leaf blower that I LOVE! Before, I had to plug in the old leaf blower, so I didn’t use it unless I had to. Though it was still working when I got my cordless blower, I’d had enough. I gave away my old corded blower, so it’s helping someone else. Now, I can easily blow out my driveway whenever I want, because the cordless leaf blower is so easy to use.
Wish I could use a cordless snow blower, unfortunately my driveway is 100 feet long and it would probably gag on the heavy wet snow we usually get. I end having to shovel out where the driveway meets the street anyway because the snowplows going by pack it as hard as an iceberg. Supposed to get ten inches or so overnight Sunday so will get out to the garage this afternoon to get the old gas blower ready, the pull cord does a job on my arthritic shoulder.
Ahh the “county lump” at the driveway/road interface. I failed to get to mine before it did the thaw freeze for several days. Lived with the glacial ice till this week it finally melted off to a small hump.
The six inch snow on the property is now so iced up you can walk on top.
Someone in here knows/pals with someone in County Gov, we’re in a back corner ‘hood south county and there is a county truck plow out here within an hour after each snow.
I lived on a sailboat back in the 90’s and am currently the maintenance supervisor at a popular marina on the east coast. The liveaboard lifestyle is nearly dead, and far from cheap. Unless you live at anchor on a paid for boat, in which case you’re living like a vagabond in a car.
The liveaboards I see are either the wealthy sailing or motoring from the Northeast down to the Carribean and back, or the very poor who seldom know what they’re getting into but think it’s a cheap lifestyle. They seldom last very long.
Most marinas, including mine, have eliminated living aboard entirely. The few that do still permit it severely restrict the numbers and charge a higher fee. I think one would have to head south, Mexico or South America, to be able to live decently on a boat.
I looked into downsizing, getting a boat, and living aboard. A marina I checked out in Philly would only allow live aboards if and only if they had an address on land.
’20 percent of what my house cost when I bought it was less than 20 percent – cash money – of the $130k (cash money) that a person who wanted to buy my old house today would have to come up with.’ — eric
True — in nominal terms. But if personal income has risen in line with inflation, then the hefty down payment is no more onerous on today’s buyer than it was on yourself.
People think in nominal terms — that is, current dollars. I sold a house in the NYC suburbs, owned for over 30 years, for more than four times its purchase cost. Jackpot, right?
Not really. Inflation tripled the price level over the period. And I put over $100K of renovations into it to sell it. Compounded annual return worked out to 4 percent annually, while inflation compounded at just over 3 percent.
A Realtor™ with a weak grasp of maff would claim that it’s impossible to make only a meager 4 percent annually when your house price quadrupled. But that’s the inverse magic of compounding: what seem like enormous nominal gains over decades translate into about what you could have earned in Treasury notes.
Bottom line: in real terms, there’s no reason for house prices to ‘go up.’ And usually, they don’t.
Houses are depreciating assets which require routine maintenance. Their price should generally go DOWN with age.
Unfortunately, like new cars, new houses are shiny and nice but built of garbage which not only won’t last but will rapidly require high maintenance.
My old houses have all wood construction which will eventually rot, as opposed to engineered wood products like waferboard or glue/lam beams which will break down under moisture and temperature changes. Good luck renovating a chipboard McMansion.
Hi Jim,
Whatever gain in ‘value’ your house had over the years was probably eaten away by property taxes. Adding up the taxes I paid over the past 3 years is an amount more than we paid for the house in 1974. I’ve contemplated adding up the total amount of property taxes paid over the 50 years we’ve been here but seeing it would most likely make me go postal.
I take exception to the term “inflation”.
There are lot of propaganda terms out there. “Racist”. “Anti-Semite”. None of them have any bearing in reality, and “inflation” is no different.
Let’s look at TV’s. Everyone has a TV, right? My 65″ OLED TV cost less than $2,000 in 2022. Back in 2004 when OLED tv’s came out, a 65′ OLED TV was $15,000.
How can the price of a durable good drop from $15,000 to $2,000 in 20 years?
This would seem to be a rather large, glaring indicator that “inflation” doesn’t exist. If “inflation” existed, my TV would have cost $30,000 instead of $2,000.
So why are some things more expensive today? Things like…houses…cars…? “Inflation”?
No.
The cause is a word you’ll never (and I mean NEVER) hear mentioned in the news or by anybody dealing with economics: DEVALUATION.
What’s the difference between “inflation” and “devaluation”? 2 things:
1: TRUTH. Devaluation is TRUTH. “Inflation” is, by design, a lie.
2: PSYCHOLOGY. When you’re told “Oh, it’s just inflation.” That sounds like some external source that is beyond your control. It’s just “the way of things”. But what if you’re told your money is being ACTIVELY DEVALUED? Well, that might just change everything, including how you INVEST your money. When we know our money is being DEVALUED, we will tend to do things to maintain its value, no matter how difficult. But if it’s just INFLATION…well, that’s nothing we can do anything about. Just keep working and “saving”. While your “investments” make 8% and your money is “DEVALUED” by 10%.
DEVALUATION points out the inherent faults in debt-based FIAT money. INFLATION is some magic force that nobody can control.
I submit there is no such thing as “inflation”. It’s a propaganda term and it shouldn’t be used because it’s not at all accurate. I submit that there is ONLY DEVALUATION, and that devaluation occurs because our money is printed as NOTES rather than CERTIFICATES.
The last real increase in wages and purchasing power occurred around 1970.
It’s been downhill from there. You are correct about the propagandist use of the word “inflation” which IS actually devaluation of the currency, no different than “coin clipping”, but on a more massive scale.
Thank you. What I don’t quite understand, is why everyone else can’t see it as obviously as we do.
I had a thought, but not the money to create a campground/trailer park of sorts.
Fill the property with the 1/2 sized mobile homes that are at many of the places we camp.
People are always selling these for around $25k used.
Thought this would be affordable for almost anyone starting out or as a retirement option.
Those ‘park model’ subdivisions (399 sq ft trailers) are popping up like weeds around here.
Legal twist: they are only certified for temporary occupancy, whatever that means. But inquiries revealed that county and local building code officials have no intention of stopping anyone from living full time in an RV.
In a nearby park model subdivision, ground rent runs $500 a month — about 2-1/2 times the property tax I pay on a stick-built residence. Small trailers don’t cost much. But unless you have a cheap place to park it, it’s not really a low-overhead cost living option
It’s a sad and bleak situation for California, it can’t get much worse.
Gimme Shelter!
Back in 1985 along I-5 in Seattle, along the slope of the hill leading to the interstate, I spotted a plywood shelter on the hillside. Whether or not it was occupied, it was there anyway.
Coast to coast these days.
Buy REI, not DEI.
Tents R US!
Plenty of room in Arizona.
You’re only number 14,000 for the day – Woody Guthrie, If You Ain’t Got That Do Re Mi
Gets worse. When it’s sold for more inflated dollars, it’s considered capital gains for taxing.
And your property tax assessment and your insurance rate goes up based on the inflated dollar value.
The few places in the USA that still has “affordable” homes are also places with few jobs, so even those homes are largely unaffordable for the average person.
The places that have jobs have overvalued homes. And yes, that’s what they are, that is not the market working, it’s a symptom of the dysfunction of society. So you end up with the conundrum. Do I try to find a job in an “affordable” place with few jobs, or overpay for a house in an area with “good” jobs.
So most people end up living in places that have jobs, well because they have to. So we end up with these overcrowded, expensive, miserable places. In my humble opinion in places that if people really had a choice, likely wouldn’t chose to live.
Hi Rich,
Were I 25 again, I’d buy a camper van and live in it. Near-zero housing costs would allow me to save and – in time – be able to afford a house or at least some land. Also, you’re not tied down with a van. Just drive somewhere else. Easy Peasy!
The RV lifestyle has a certain allure…
Just so. There are plenty of cheap old houses and trailers out in the middle of nowhere in Appalachia and the Midwest where you are lucky to get a minimum-wage job at McDonalds, Walmart or a truck stop on the interstate and those places are staffed with 50-60 year old whites.
In places where there are jobs galore, like Miami or Charlotte, an 800 sqft shack is $250,000 and a decent middle-class home is $500k and up. Sure, you might make $25 or $30 an hour instead of $10 but you’re not getting any further ahead.
Seems to me that a “middle-class” lifestyle in many areas requires a two-income household of $150-200k and unless it is a government job, job security ain’t what it was like in 1960.
That 2 income 200k household is being crushed by taxes (they’re “rich” they can afford it /s) so really in any major population center that number to just break even is likely closer to 300k.
Stealing from slaves….
The slave owning control group own all the banks and central banks…this gives them the power to print so called money….to finance their agenda and hire enforcers to enforce it…..
They pay slaves with promissory notes…then tax most of it back….in return the slaves give them real skills and labor….
Fiat currency…and promissory notes….
Take a one dollar bill to the bank and try to redeem it for gold….which was possible a long time ago…..the bank won’t do it because the conversion to gold is temporarily suspended…thank Nixon….
In 1933, when the government stopped the conversion of notes…paper dollars… into gold, gold was required to be given to the federal government at a price of $20.67 per troy ounce.
The price was allowed to rise to $35 per ounce by January 1934….so if you redeem $1.00..in fiat paper dollars… you are supposed to get 1/35th of an ounce of gold in return….
there is a huge problem now….that would require the bank to give you ….$78.65 worth of gold….1/35th of an ounce…. for your one dollar paper bill…..
$35.00 = 1 ounce of gold…1/35th of an ounce of gold….in today’s fiat dollars that equals….$78.65……1/35th of an ounce of gold = one dollar….
In 1968, the requirement to hold gold reserves against Federal Reserve notes was repealed. In 1971, the U.S….Nixon…. announced it would not freely convert dollars at the exchange rate with gold….. convertibility suspended…temporarily….
Convertibility returning in 2030?…back to the gold standard?….
Stage 1…
Promissory notes convertible for monetary precious metals ….to get confidence in them…
Stage 2…
Suspend convertibility and expand the supply exponentially….Until…
Stage 3….
Gold and silver revalued to account for all the promissory notes created since the last time….cycle repeated….back to stage 1….
We are at stage 2 in 2024….
Stage 3….Convertibility returning in 2030?…back to the gold standard?….probably not…too many promises to pay have been printed….
You can fight fire with fire….it is legal to create a promissory note….you can do it too…see video…
A promissory note is supposed to say…. who you are going to pay, what you will pay and when you are going to pay….but…the fiat cash in circulation today doesn’t say when you get paid….or with what….a long time ago it did…….
https://www.youtube.com/watch?v=PBURi63fRy8
Classical economists refer to two types of inflation: “cost pull” and “demand push.” If costs rise, prices rise. On the other hand, if demand rises and an item remains scarce, prices also rise.
What theoretical economists tend to ignore is that the entire equation in classical economics between supply and demand is always rigged by political decisions. The decision to print more money is a political decision that causes inflation because there are more dollars chasing the same amount of goods.
Immigration policy is another rigged political decision, because it either increases or decreases the labor supply, and thus has the effect of increasing or decreasing wages, which has a direct impact on prices.
Foreign trade is another area in which the “free market” is manipulated by politics. So is government debt and the setting of interest rates.
Ultimately, the “free market” is largely a fiction. If the “market” is in fact going to be rigged, I want it rigged in favor of me and my people, not in favor of a clique of international globalist elites who purchase political power and increase their profits a hundredfold by exploiting Third World labor or worse, importing that Third World labor here.
the U.S. dollar link to both gold and silver persisted until March 14, 1900 and passage of the Gold Standard Act, which asserted that:
… the dollar consisting of twenty-five and eight-tenths grains (1.67 g) of gold nine-tenths fine, as established by section thirty-five hundred and eleven of the Revised Statutes of the United States, shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard…
At that point, the United States was on a gold standard – a standard which guaranteed the dollar as convertible to 1.5 grams (23.22 grains) of gold.
One dollar is worth 1.5 grams of gold….1 troy oz = 31g……so one ounce = 20 dollars….
The current price of gold is….$2739 per ounce……..divided by 20 = $136.95……
They will not redeem your dollar today…they would have to exchange it for $136.95 worth of gold…1.5 grams of gold…..they’ve printed a huge amount of dollars……
So if you take a one dollar bill to the bank today….it should be exchangeable…convertible to $136.95 worth of gold….1.5 grams of gold….
Go to the bank and tell them you want to redeem your dollar for 1.5 grams of gold….(that is worth $136.95 in 2024 dollars)….good luck with that….
It looks like there has been a huge deception and theft….
Silver was valued at 15 to 1 to gold….so is worth $2739 divided by 15 = $182.60..per ounce…..it’s price today is $34.10 per ounce…so is undervalued…cheap….
There should be 2 money standards – gold and silver.
Gold should be for “corporate-level transactions”. Transactions in the millions of dollars.
Silver should back “common money”.
Gold-backed currency gets expensive and can be scarce afforded by ordinary people. But its value makes it perfect for large scale transactions.
Silver is affordable. So affordable, I react it with nitric acid to make silver nitrate. Silver nitrate is even more useful and silver. And I can always convert it back.
“It increased – in real terms – by about $30k.”
It may be early, but do you not mean DECREASED by $30k (in 2024 money), Eric?
As in, if you sold the house for $681k in today’s money (in 2004), and today it would sell for $650 in today’s money, that is a -$31k change?
…Nevertheless, these values are the product of artificial scarcity, as well as the proximity to that Den of Darkness, if the case of your old house, Eric.
I’m still planning on building a ~600 ft^2 house and the cost estimate is still >$20k, though I will be revising soon. Of course, I get to live here while I build it and will not require the “services” of mortgage lenders or insurance companies, so that helps a bit.
Farmers around here hire a bull to service their cows. That is exactly the kind of service the banks and government are providing.
Excellent analogy, Ernie! I’m done with that ride.