Housing affordability continues to soar out of reach of most buyers. Not only are prices at a new record level, mortgage rates remain close to 7.0 percent.
Chart Notes
- Case-Shiller measures repeat sales of the same price over time. It is the best measure of price, but it lags. Current data is as of May which reflects sales 1-3 months prior.
- The CPI, OER, and Rent of Primary Residence are all from the BLS.
- OER stands for Owners’ Equivalent Rent. It is the rent one would pay if someone was renting instead of paying a mortgage.
Not Inflation?
Economists consider homes a capital expense, not a consumer expense. On that basis homes are not in the CPI. It’s a serious ongoing mistake.
Existing Home Sales Drop 5.4 Percent But Median Price Hits New Record
Sales are down 38.6 percent from the January 2022 high and barely above the October 2023 low (yellow highlights).
Existing-home sales declined 5.4 percent in June. It was the 23rd decline in 29 months. But the median price hit a new record.
On July 23, I commented Existing Home Sales Drop 5.4 Percent But Median Price Hits New Record
The median existing-home sales price bounced 4.1% from June 2023 to $426,900 – the second straight month it reached an all-time high and the twelfth consecutive month of year-over-year price gains.
The Problem With Measuring Prices
Case-Shiller measures the price of the same home over time.
Median and average prices have no consistency on number of rooms, square footage, location, amenities, lot size, or quality of construction.
Median and average price are also skewed by a slowing number of transactions heavily influenced by price-insensitive buyers.
Although median price is a poor measure, the rising direction is consistent with Case-Shiller reporting.
The problem with Case-Shiller is timeliness. We are heading into August and Case-Shiller is just reporting May data. And that data represents transactions from a couple months prior.
Signs of Severe Stress
The economy is slowing and that will hit the zoomers first and the hardest, especially renters.
For discussion, please see Signs of Severe Credit Card and Auto Loan Stress in Generation Z.
Many who stretched too far to escape rising rents are now in trouble.
So are others whose wages did not keep up with soaring rent, food, and auto insurance.
The strength of this economy is vastly overrated.
I’m surprised that you call it a bubble since the cost to build a home today, including materials, labour, regulations, etc. is more than the average home price. In other words, building a new house is a guaranteed money loser so how are home builders going to make money?
How do you figure it’s a money loser when they’re building more houses on speculation than ever? Home builders had their most profitable years ever. Why are median new home prices less than existing homes?
There is still gobs of profit left over, especially once you get past the 450k range.
illusion: bubble in everything
reality: major dollar debasement
keep in mind the us has one of the lowest house price to income ratios in the world.
https://www.numbeo.com/property-investment/rankings_by_country.jsp
The problem with the “everything is in a bubble, so nothing is in a bubble theory” is that incomes did not rise commensurate with houses, cars, stocks, etc.
that has been going on for at least 30 years now and it’s not about to change. raul pal of realvision has explained that salaries track gdp growth, stocks track the growth of money, and tech stocks track growth of money with a multiplier.
Not true at all, there were several periods in the past thirty years where both homes and stocks were fairly priced relative to incomes.
The KTLA news crawl had a story that a starter home in 117cities cost 1 million dollars.
Should be fairly obvious by now monetary policy does not produce needed Housing.
So which new administration will provide policies that can induce Housing to get built?
Higher energy costs and locking up the natural resources of America used to build is one approach being offered.
Another approach would be get energy moving again, open up forestry products industry, allow mining, keep the Internal combustion Engine as the primary source of transportation power.
This is not a trick question to answer if the goal is to start producing Housing so that people have roofs over their heads.
Add Once again this is a political economy that has brought the US to where it is today.
To change the outcome change the policies that caused the problem.
All you have to do is nothing. Stop being in the way.
IOW: Anyone, any where can build the greater of 1 story taller, or 30% taller, than the tallest structure within a quarter mile. That would prevent skyscrapers in farm country, without unduly restricting the central free market functioning of encouraging building where demand is the greatest. “Shall Issue” building permits, to paraphrase the gun guys.
Do that, and you’ll quickly; and in ever greater abundance; have 1)enough housing’ 2)low enough costs for housing and office space to severely improve American workers’ and companies’ international competitiveness; 3)dramatically increase the quality of housing, since abundance is what allows customers to be demanding; 4) A truly massive number of new jobs building all the new houses; 5)and those jobs will be “good”, since low end employment won’t be able to compete on quality once customers can afford to care; and 6) you’ll again get a class of world class German/Japanese style “mittlestand” companies, supplying all the building. All companies which will have little choice but to be world class or be bypassed, hence further increasing demand for “good” jobs.
And that’s just first order effects.
Higher order, all these guys actually creating value for a living, will become a major political influence bloc. As opposed to today; when nothing more than an army of complete imbeciles; who can not hence do not produce anything of value, but instead specifically BENEFIT from the rotting shacks The Fed has stolen for them being kept artificially scarce by lackeys of the Junta banning more competent people from competing with little idiot them; are instead the ones “making money” and hence buying influence.
The only way out of the impending debt deflation is helicopter money. High inflation is written in the cards. Thus, those high home prices are likely to become much higher. They may dip first, but, I bet at the first signs of debt deflation, they will print out the wazoo.
My parents bought a house in 1969 for $27k and sold it in 1978 for $58k. Sounds like a housing bubble, doesn’t it? It wasn’t. It was 1970’s inflation. And today that same house is worth over $500k.
We could possibly be experiencing 1970’s inflation (or worse) right now. In many markets, housing prices went up 300% to 400% in that decade.
Vastly different demography and times. Incomes were for the most part keeping pace, so it wasn’t really a bubble. Also, when incomes couldn’t keep pace, Steve could simply put his wife Patty to work as a teller at the local bank and increase household income by say 60 or 70% (There’s some chicken and egg scenario going on with that one). Kids today can’t pull off the same inflation-defeating trick.
Incomes weren’t even close to keeping up with inflation in the 70’s. Try persistent double digit inflation on for size.
Yes, but and that’s why single income homes became double income in the 70’s and early 80’s. You can’t pull that trick off today, which is why the persistence of high prices from the seventies probably won’t get replicated today. People’s only option today is to stop spending once all the money and credit cards run dry.
Same with my parents. Bought 1st house in 66 for 14K and sold in 78 for 45. A tripling of the price and this is in a small town (35K population at that time), not NY or LA.
Of course this was also peak boomers buying their 1st homes time too so a lot of that price appreciation is going to be because of that in addition to inflation.
The house went up about 8% in value from 1969 to 1978. I think Professor Shiller that historically homes appreciate about 4% annually.
If it is now $500,000 then it went up 5.5% annually from 1969 to 2024.
That $500,000 home must be in a lucrative location like Boston suburbs near a lot of middle class and white collar job centers.
But we are not “facing 1970’s inflation” if going by the federal government’s reporting of inflation such as PCE and CPI. PCE is averaging less than 3% since October 2023.
1970s experienced +6% inflation, but maybe that’s because the accounting for inflation was different back then.
That’s a high value for a house that old.
I just checked it on Zillow, and now it is supposedly over $600k: 6959 Waterman, University City, MO, 63130
It is in a nice neighborhood of middle-class homes built mostly in the 1920’s.
Beautiful house, it is quite large. And likely a desirable address in a town noted for its architecture. So the price makes sense.
I track a lot of cities along the South and the gulf. Draw a line from Bakersfield,CA to Charleston and pretty much every region below that I keep track of using my own (unscientific, but reliable) methods. There is NO WAY prices are still going up. They’ve been going down for months, and in many places, May/June 2022 was the peak-peak. Unless the appreciation is so massive in the NE that it offsets the entire South and then some, but I doubt that. There are regions of California that are surprisingly stubborn, that much is true.
Do you do seasonal adjustments like Case-Shiller?
Why, does my wallet seasonally adjust? I just want to know if we’re trending down or up. I guess I do adjust for seasonality in my head. For example, despite what the C/S chart would have us believe, I know that many, many places did NOT overthrow their 2022 peaks during the 2023 seasonal peak, nor the 2024 seasonal peak (which hardly registered as a peak in many of the places I track). That’s the key piece of data I care about, because that tells me that a downtrend started 2 years ago in many places. I think the median is being HEAVILY distorted by the mix-shift higher-priced properties being sold.
The housing crash was back in 2022. Prices up almost everywhere since then. Not enough supply for sale.
I like these visual maps which were just updated on 7/24:
https://sparkrental.com/hottest-real-estate-markets/
The 3rd map down shows YoY increases. TX and the Gulf Coast show weak price recovery from the crash, but everywhere else is going gangbusters.
You know that housing crashes don’t come and go with full employment staying at full employment and the inverted yield curve never uninverting right? If anything, 2022 was the mic-check before the performance. There is plenty of supply out there, and lots of pent up sellers. It’s a myth that there aren’t enough hoes in America. There are just wild covid distortions (primarily interest rates, but also moratoria, workouts of all types) that are still keeping homes off the market artificially.
yeah, Panama City Beach 3 bedroom with garage townhomes seem to be priced about $280,000 whereas their peak price in early 2022 was around $330,000 and they were selling for $235,000 in March 2020 and $190,000 in 2017
they rented for $1500 per month in 2016 now are listed around $2050 , so rent has gone up about 4% a year since 2016
yeah examine Panama City Beach and townhomes prices as well as townhome rent
3 bedroom with garage townhome within 2 miles of beach are renting for around $2000 and same price as they were in 2022, and they were renting for $1500 back in 2016. Utilities are monthly about $125 for electric, $50 internet, and $50 water/sewer.
average starting wage for fast food now is $15 an hour with at least 30 hours a week work , so 3 workers could share a 3 bedroom townhome
I am seeing where wages and income are catching up more to housing costs (i.e., townhome rent) for working class n Panama City Beach
WOW… did you stir them up.
Why are prices going up Mish? If everything is so bad, as you repeatedly say, how is it that people are affording more expensive homes?
they either overleverage themselves by taking on more debt, or they are higher earners and can wangle the Mortgage holder into beleiving the credit history/income they have “created”. no w2 needed for millionaires etc..
Because landlords can pay more for the property and then rent it for a profit. Many are paying cash.
So, to some, the properties are “worth it” and generating a profit for the buyer? Seems like capitalism.
It’s profitable for the “rentier” segment.
This is definitely not the reason.
In many places renting is cheaper than a mortgage at 7%. It’s why so many are renting.
The landlords that are making money are ones who bought years ago at much cheaper prices and 2-3% interest rates. It’s incredibly hard now to buy a home in the current market and rent it and have the cash flow make sense (for example if you have 800K cash and are considering buying a home to rent, you know you can get 5% in TBills or 40K cash risk free. If you buy the house you need to make >40K in rent which is 3,333 a month, just to match the TBill money and you still to charge more than that to cover insurance/taxes/repairs so you’d need to get at least 4-5K a month to make it a better investment and how many places can charge that kind of rent).
You forgot to add the cost/stress of dealing with renters as a landlord……..”priceless!” Been there done that, Never again. The other costs you didn’t mention (in most areas) is that the current seller of ‘said’ property has been there for a long time. If I cash him out, the property taxes get reassessed at the current value. A property I’m currently looking at for $625K the current owner is paying $3500/yr in taxes. They’ve been there around 30 years. If I were to buy and claim a homestead exemption (if i were to live in the property) the taxes at the new assessed value would be around $8400/yr. If I didn’t claim the homestead exemption and were buying this as a second/third, etc…. home the property taxes would be around $14,000 yr.
I live in an upscale suburb of Orlando. Homes in my neighborhood that used to be snatched up in a week or two at a premium to the asking price, are now now being reduced after sitting on the market for a couple of months. I think what used to be the FOMO (Fear of Missing Out) for buyers on escalating real-estate prices is now reverting to FOMO for sellers….Fear of Missing Out to get out before prices start to fall. I think the real-estate market has topped out and is now just beginning to start a slow decline.
With the elevated prices of homes along with increases in mortgage interest rates, taxes, and homeowner’s insurance, many people can no longer afford the down payments with all of the ensuing costs of owning a home.
This morning I just talked to a retired guy that plans on moving with his wife from Orlando to Clearwater to be closer to his son and grandchildren. He was consulting a local realtor in the Clearwater area. The realtor is advising to rent for a year before actively pursuing a home purchase. The market is slowing down (at least in Florida).
It’s an illusion created by lack of sales.
If a single home sells in a market for 1 million dollars then the average (and median) sales price is 1 million dollars. Doesn’t matter than there might have been 100 other homes for sale at that price and no one was buying because they could not afford it. Nor does it matter that a year ago 50 homes sold for an average of 900K. What happens is you get a year over year price increase of 100K (900->1 million).
Prices are rising because fewer and fewer homes are being sold. What is being sold is the expensive stuff (first time buyers are priced out entirely) that is basically just someone selling (trading really) one over priced home for another over priced home.
sacrificing everything else? no vacations, multiple jobs, etc.. their health, their family.
also owning is cheaper then renting in the long. but it’s hurting the economy for sure.
Because the investors are paying the higher prices.
MIsh rarely discusses the true CAUSE of inflation. He spends most of his time digging through economic indicators.
The true cause of booms, busts, inflation and deflation is the debt-based money system. Private banks create all dollars. Banks create new digital dollars when they lend. When the loan principal is repaid, this money is “extinguished”, which means it ceases to exist. The entire money supply is created this way. Banks do not need prior reserves or deposits before creating new digital money to lend. (proofs at bankLIES.org)
Because interest is always due on all the bank-created loan principal, and because the loan principal vanishes from existence as it is repaid, there is never enough money in circulation to pay off all of the debt. For example, there is over $93 trillion in total American debt, vs a money supply of under $21 trillion. If every person, business and government tried repaying their debts at once, they would be short $72 trillion! In other words, this parasitic debt-based money system is intentionally designed to keep all of us trapped in debt from cradle to grave.
Inflation seems to have 3 causes that may or may not happen simultaneously:
1) Large increase in money supply.
2) Abundant cheap & easy credit (credit equals new money creation)
3) Snowballing interest payments being built into all prices and passed on to buyers.
At this time, #3 seems to be the most likely cause of rising prices. Why? Because according to the St Louis Fed “FRED” website, money supply level is mostly flat at under $21 trillion while home and food prices continue to go up, up, up. This proves that the inflation/money supply link is not always causal.
Blame the FHFA conforming loan limit for this insanity. 88% of all securitized mortgages are ‘agency backed’, and the GSEs that are the “agencies” only work with conforming loans. 88% is an effective monopoly in price setting. Lower the FHFA conforming loan limit, and housing “magically” becomes affordable.
Is that ‘wolf guy’ censoring comments here? My comment vanished.
I’m still waiting for the ‘millions of vacant shadow inventory’ houses to hit the market that wolf keeps talking about.
The actual shadow inventory is in Commercial Real estate, lots of empty buildings propped up by banks unwilling/unable to take a write down/off.
Many of those houses should be condemned because of their condition and because where they are located will not be replaced.
They were talking about ‘shadow inventory’ back in 2010. Yet home prices have mooned since then, there are too many people, everyone is rich, massive inflation, no building of SFHs. Prices are only going to go up.
What’s crazy isn’t so much that that house prices keep going up, it’s that they’re going up in spite of massive increases in housing inventory in certain regions.
demand is coming from people selling in the higher priced markets and buying in the lower, while global money still purchases our real estate for reasons other than if there is immediate value, its a currency hedge
But it is nuts………….Factor in housing off the market because people AirBNB it, and now many people in any village USA wants to rent their house out to illegals because the federal and state governments are paying them top $just like they do these hotel owners.
I have read 20% of the hotel rooms in NYC are for the illegals. if they admit that amount its probably higher
a lot of residential real estate is owned by investors including Black Rock, I get 12 phone calls a day wanting to buy my house, and at least 3 to 4 letters a week.
This isn’t some guy who wants to live in my neighborhood, its companies and corporations trying to vacuum up property.
ps. i don’t answer the phone anymore..
You’re being contacted by agents who want to list your house for sale.
no they want to buy my house as is,where is. They are not agents, they are principals, Black Rock owns the house across the street. Corporations must love this neighborhood. A lot of the buy your house now for cash fellows are acting as agent for the corporations and transfer the property to Black Rock et.al. with 60 days.
The letters have include check fascimiles, offers to buy my house and lease it back to me, buy outright etc.
Not one has been from an agent or real estate agency. I haven’t had a letter from an agent for at least 3 years probably longer.
You must have filled out one of those “what’s my house worth” scam ads. They’re just searching for the scammers holy grail, someone with assets who is mentally incompetent but hasn’t had a conservator appointed yet.
No I was an IT administrator for much of my life, I was on computers before they were even networked, let alone on the internet. Surely you don’t think my real name is Guacamole?
I use a VPN, burner email addresses and many more techniques. I don’t fill out any online forms, that aren’t from my saint like government.
I don’t care what my house is worth, until I get rid ot it. I can check the tax valuation of any house in my county on the Tax Commissioner sites. I can see who owns the property and who pays the taxes. Its easy to see who the owner is, where they live, if they are a corporation, a bank, etc.
I don’t need to “find out what your home is worth, now!!!”
I don’t click on clickbait, I block most of it…
Note to first time buyers and incipient investors: Buy minimum-size developed land with zoning for mobile home at uttermost suburban fringe. Avoid rent by parking a camper and living there until you can afford a mobile home. Bring in mobile home. Rent it out. Repeat.
Buy the cheapest house in the best neighborhood, has always been rule #1.
“Economists consider homes a capital expense, not a consumer expense. On that basis homes are not in the CPI. It’s a serious ongoing mistake.”
I would say that homes are a capital investment ( the purchase price) as their value can grow or diminish over time with a number of variables but they are a consumer expense in terms of maintenance, upkeep and the expense of utilities. Is this not the correct way to assess their cost/value?
it has nothing to do with the “correct” way to evaluate reality, its about manipulating the model by segmenting the data.
Yeah, only 18% of PCE is for housing costs (i.e., rent), whereas it is around 33% for CPI. I am not impressed how CPI accounts for housing costs as “owner equivalent rent”.
But at least PCE and CPI somewhat gauge the direction of inflation as PCE is showing inflation is at a much lower rate of 2.5% now, compared to around 7% back in 2022.
We learned nothing from the last bubble and the government continued to encourage over-investment in housing by Fannie, Freddie, and the Fed pumping money into the industry. Instead of allowing the last bubble to deflate, they added more air.
On the contrary, we’ve had too little investment in housing. The only way to durably and reliably fix the housing affordability crisis is to increase the supply of housing.
I think you mean increase the number of buyers…. it does no good to build more homes that are unaffordable, or are purchased by holding companies using rental income to pay dividends.
The free market matches buyers, sellers and builders perfectly, at the “right” levels. The problem is the government has beat the heck out of the free market so much that it barely resembles one anymore.
if you’ve paid any attention since 2007, it should be apparent there is no “free market”. Tax payers bailing out banks is not a free market. Free market is a slogan to drag you and I around by our federal reserve nose rings, and plop the plebs into the mud, while our master feast on the finest and their waiter delivers the bill to us.
I’ve observed a lot of apartments and townhomes constructed in Panama City Beach over last 5 years. Rent prices now seem same as they were in 2022.
3 bedroom with garage townhome on east side of Panama City Beach rents for around $2050, which was same in 2022. They now sell for around $270,000.
It rented for $1500 back in 2016, when same townhome sold for $188,000.
Panama city is in the Hurricane Zone, their is a limit to how many people want to see the ocean so badly, that they will pay with their lives and property for the priviledge. Hence your market of individual buyers is limited not only by $$$$, but also by I.Q..
The US, has a lot of land, and not so many people. If manufacturing hadn’t been offshored, the population would not all be bottlenecked on the coasts, rather the interior and the once great cities, would still exist as viable settlements rather than ghettos and empty buildings. Detroit for instance, Gary,Indiana, Youngstown,Oh, Rochester,NY and a thousand more towns and cities.
There was some drop in housing prices (about 25% in 2012 from peak set in 2006 for national median price).
Seemed like you could get a fairly good deal back in 2012 for housing.
Housing units completed needs to be around 2,000,000 ; its at 1,700,000 now.
How many units are vacation rentals (AirBnB, VRBO, Vacasa, etc) or 2nd or 3rd homes for wealthy people ?
https://fred.stlouisfed.org/series/COMPUTSA
Compare that to the past say 40 years ago, was it as common as far as vacation rentals instead of people just staying in motels and hotels ?
Prices have not changed. The dollars are worth less.
VALUES have not changed. FIFY.
Price is what you pay (in dollars, that are worth less).
Value is what you get (which generally doesn’t change).
Hedonics … Everything has more value …
Your salary should be worth less also so that doesn’t explain the price of housing unless your salary has risen to compensate for inflation.
What a disgrace
Interest is the price of credit. The price of money is the reciprocal of the price level. They have different monetary transmission channels. If you want to drop asset prices you drain reserves. Then you simultaneously lower policy rates. This stimulates R-gDp relative to N-gDp.
The commercial banks create new money (in the form of demand deposits) when making loans to, or buying securities from the non-bank public; whereas lending by financial intermediaries simply activates existing money.
Interest is the price to “join the game” its also the collar they drag you around by.
Fed says 0.25% cut this September, until it reaches 3.25% end of 2026.
They printed trillions, inflation is inevitable.
Here comes the easy money train for 1 more ride, that will buy a few more years. Expect home prices to continue to rise in the short to mid term.
I’ve never seen a doom and gloom prediction come true. That being said, how will America find its way out of the enormous debt racked up by the end of this decade? There always seems to be some way to squeak by. Will they find another one? Will investors demand higher rates later this decade?
QE happened twice and zero inflation. The money supply does not drive inflation. What causes inflation? The best guess I’ve come across is the price of oil.
May not have driven the conventional measures of inflation but it sure fueled asset price inflation as most of the QE ended up in the hands of the already wealthy
QE inflated the prices of the things that the people receiving the QE like to buy.
The current inflation is driven more by deficit spending and stimulus going into the hands of people who buy actual stuff from actual people, rather than Wall Street tokens.
The current inflation is mostly in services (labor costs). The reason for that is the initial inflation (goods) caused so many goods to be out of reach for people that they demanded higher wages to afford the same things they could afford before QE.
It’s a game of whac-a-mole. Inflated goods caused inflated wages to buy the goods which then caused inflated services which is going to cause more inflated goods because the wages to make the newly made goods makes them more expensive which will then put more pressure on wages and on it goes. It’s a wage-price spiral. Volcker finally killed it in the early 80s with price controls combined with VERY high interest rates.
Labor costs also rose b/c of massive demand for workers, both in government and to rebalance economy after the shutdowns, and to make the goods and provide the services all being demanded … but the demand and the inflation came about because people were handed tons of fiat-created money they’d never earned.
Maybe you are confusing Volcker with Nixon? Nixon had two episodes of price controls. Volcker had no authority to instigate price controls.
It caused housing price inflation and shit ton of other things conveniently not measured by the politburo. It also geatly increased wealth disparity . On the way to the fourth turning and civil war because of our corrupt crony capitalist political system.
remove “civil” and you are mostly right. There will be war, but not civil, at least not in the USA..The propaganda pitting citizens against each other is not meant to foment civil war, but rather to divide the lower classes against each other, rather than unite against their masters. its a rather old political ploy, amplified by instant communication and the internets and mass media. You’re soaking in it right now….
Oil is certainly part of the inflation story since it is fundamental to our economic growth and standard of living. However, oil is still incredibly cheap. A $75 barrel of oil is equivalent to 2000 to 15000 hours of human labor, depending on the type of labor. At the minimum, that would be 0.5 cents per hour. At the max, 3.75 cents per hour. Cheap.
Natgas is 1/6 the price. So 0.1 cent to 0.6 cents per hour of labor equivalent.
It’s the primary reason we have such a high standard of living compared to a hundred years ago.
Alan Blinder claims almost all inflation is related to oil prices.
He was blind, and now is Blinder?
Everyone is entitled to their opinion. And as I said, oil prices have some impact on inflation, but they are certainly not the biggest factor. Here are a few things to consider:
In June 2008 oil peaked at a nominal price of $126.33 (inflation-adjusted price of $177.26) The inflation rate in 2008 was 3.84%.
Oil prices fell 92% to the ridiculously low COVID-induced glut price of $11.18 in April 2020 (inflation-adjusted $13.39). They even went negative for a couple of days. The inflation rate was 1.8% in 2020. So a 92% price reduction only brought inflation down by 2%.
Oil averaged $95 in 2022 (inflation adjusted $87). The inflation rate in 2022 was 6.5%. So oil was just half of the 2008 price.
Today oil is $75. Which is 58% less than in 2008. And the inflation rate is 3%.
The average inflation-adjusted price for crude oil since 1946 is $54.90, which is still about one-third of the 2008 price.
The average inflation-adjusted price since 1980 is higher at $67.74
The average inflation-adjusted price since 2000 is even higher at $76.30.
A human being has infinitely more capability than a barrel of oil. I don’t think you can even remotely compare them. No amount of oil can or ever will teach a class, drive a truck, build a house, cook food, care for a person.
we don’t have slaves anymore because we have oil to do the work. US Navy Admiral Zumwalt said something to the effect,each barrel of oil is the equivalent of 50 slaves, in a speech he gave on resource allocation in the 1950’s
bottomline is Supply vs Demand
Supply dropped across the board as less people went to work and stayed at home
Supply dropped in goods and services not heavily effected by oil prices
Demand did not decrease for essentials like food, healthcare, etc
Hence prices went up since supply decreased relative to demand
I agree if oil prices go up then the costs such as transportation costs for groceries to the supermarkets get passed to the consumer
Hopefully there is more efficiencies in the logistics and transportation industry to compensate for this
the classic definition of inflation is too many people, chasing too few resources. You have to balance that equation to lower inflation.
The entire “science” of politics is a system to allocate resources equitably among all classes, you can see how politics and economics are 2 sides of the same coin, split to acheive the magician’s dream of a 2 headed coin to placate and distract the mob, while their assistants pick the pockets of the dazzled crowd.
Not sure where you live but for sure you are under a rock or multiples rocks. Look at companies balance sheets. They are f you and the rest in the name of inflation.
I guess you weren’t around when Ross Perot ran for President or you would have seen a “doom and gloom” prediction come true…
Giant sucking sound
The “giant sucking sound” was a phrase used by United States presidential candidate Ross Perot, to describe what he believed would be the negative effects of the North American Free Trade Agreement, which he opposed. Wikipedia
Bubblicious.
Can the Democrats keep the recession out of the media narrative until November?
It doesn’t matter. The msm can no longer gaslight Americans. We don’t need the msm to tell us we’re in a recession. Your pocketbook tells you we’re in a recession.
They already have.
There are people who have little if anything in the stock market yet use that as an economic indicator, which is a fallacy. .
it was only a fallacy when Main Street and Wall Street weren’t connected. Now that Wall Street owns Main Street, the stock market is a barometer of the future of all of us.
The empty malls and hollowing out of industries by corporate takeovers and buyouts, has tied all our fortunes to the apron strings of the mad chefs..
How long can you keep all the positive hard economic data out of your recession narrative?
When the US was a manufacturing economy, there was only ONE American economy. Now that everything has been financialized and so many people make their living off of credit and debt, there are two completely separate economies. It’s easy for anyone to paint any economic picture they want buy choosing to focus on one economy or the other.
Sounds like a Casino Economy.
If it crashes, people will benefit of learning how to live in a self reliant or homesteading style economy.
We try to be as much self reliant as possible such as fix our own cars, air conditioner, etc.
Less people available to work in service industries like car repair and HVAC repair, which drives up the cost for these services.
I just hope the air gets let out slowly and people adjust without having to suffer any major economic shock.
Amen…
Home prices merely keep pace with the misreported hyper inflation. Sellers know exactly what it costs to replace their homes.
Over time yes, housing tracks the real inflation rate (not the BS rate reported). But that’s only AFTER you draw a line that splits the difference between the peaks and troughs. We’re in a VERY clear peak.