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lmao at just thinking you can hand out a bunch of money to artificially drive housing prices up
housing prices were already artificially driven up-which is why they crashed
you cant hold up a market with bull**** forever
He said, you can't hold a market up with bull fertalizer forever and I agree with him completely. How ever you can hold the market up with higher wages. It is called inflation.
Quote:
Originally Posted by Mircea
and the other half goes way, way, way over his head.
The question arises do you get this simple fact. When assets and wages go up together you have inflation when assets go up alone you have an asset bubble. There are two ways to correct a bubble. Let the asset prices fall or raise the wages to support that asset values. Inflation or deflation. Take your pick. With real estate inflation is far faster than deflation. Just take a look at Japan, they have been in their popping real estate bubble for 21 years and counting.
You're talking to a nematode. Half of what you say goes over his head and the other half goes way, way, way over his head.
Give it up already.
"Although this was a real estate valuation seminar, the premise was consistent throughout: A dearth of available financing through a weak banking system coming off of a real asset and credit bubble burst spells big trouble. The "big trouble" is much worse than many make it out to be. You see, the one thing that nearly all banks lend against is real estate, and the less banks lend against said real estate, the less said real estate is worth. A vicious, self-reinforcing circle of real asset price correction in an attempt to reach equilibrium." from here
That is what we are up against. A 1930's stile depression. We wont have a world war three to pull us out of it. We don't have a Mr Glass or a Mr Steagall as well. Calling me names wont make me go away. It also wont make the underlying problems go away as well.
Houses were monetized so as long as the prices of them are falling we have deflation. With the rampant printing of money were are also seeing the stuff we need to survive going up. That is inflation. Add them together and you have stagflation. The worst of both inflation and deflation.
Inflation to stabilize the falling price of house can be fast. Deflating the prices of house takes a long time. So my conclustion is that the corce of least harm is fast inflation to stabilize housing then small positive inflation after that.
Houses were monetized so as long as the prices of them are falling we have deflation. With the rampant printing of money were are also seeing the stuff we need to survive going up. That is inflation. Add them together and you have stagflation. The worst of both inflation and deflation.
Inflation to stabilize the falling price of house can be fast. Deflating the prices of house takes a long time. So my conclustion is that the corce of least harm is fast inflation to stabilize housing then small positive inflation after that.
How do higher house prices bring about full employment?
How do higher house prices bring about full employment?
Higher house prices and the promise of higher prices still will get banks loaning again. This will get money moving in the consumer economy. This will bring on full employment. This reflects the economy being 70% based on consume spending. Higher home prices lead to more equity being spent this tends to pump up the consumer economy.
Long term we need to regrow our manufacturing base. And we need balanced trade. A higher or more correctly a high savings rate will help with this a lot.
Higher house prices and the promise of higher prices still will get banks loaning again. This will get money moving in the consumer economy. This will bring on full employment. This reflects the economy being 70% based on consume spending. Higher home prices lead to more equity being spent this tends to pump up the consumer economy.
Long term we need to regrow our manufacturing base. And we need balanced trade. A higher or more correctly a high savings rate will help with this a lot.
How do you account for inflationary expectations? If you hand everyone a check, prices will rise. Housing portfolios won't have any greater real value. Are you counting on money illusion to boost real spending?
How do you account for inflationary expectations? If you hand everyone a check, prices will rise. Housing portfolios won't have any greater real value. Are you counting on money illusion to boost real spending?
You are incorrect. Housing portfolios will have a greater real value. With 1 in 9 houses vacant across the country if you reduce the vacancy rate you increase the value of the houses. Handing everyone a check will tend to do this. With 1 in 4 workers or would be workers out of work getting full employment will make houses more valuable. With a 4X on minimum wage you have wages leading prices in inflation. With handing everyone a check you get the expectation of economic activity now.
The ratio of median household income to median house price needs to be adjusted. (In the last bubble it reached 4.5:1 sustainable is less than 3:1) With deflation you have dropping wages as well as falling prices it takes a long time to reach equilibrium. With inflation you have higher wages and the expectation of higher prices and so it takes far less time to reach equilibrium. The lines on the graph cross each other rather than run parallel over time.
We have stagflation it will still take a long time to bottom out. With true inflation it will bottom out much faster.
We need the P/E ratio of stocks to spend some time trading in the 10:1 range they are currently trading in the 20:1 rang. A 200% inflation in GDP would adjust this to where it needs to be without the price of stocks falling. The fed is pushing as hard as they can on stock prices to keep the baby boomers happy. Baby boomers vote.
If you keep the top the same and inflate the bottom by 400% you should get an across the board 200% inflation in GDP.
The boost in real spending will come by putting the out of work back to work.
Agreed, spelling is definitly my ackilies heel and has caused me to be repremanded several times by the spelling police here on CD.
I wish I had the time to re read what I write.
I HATE the spelling police, do they get paid? Also what do they do? Take each posters comments and run them through spell check? When i first started posting on CD the spelling police where attacking me like no
other
The second reason it would do the exact opposite of its intent is the government. Whenever the government gets involved in anything for whatever reason, the reverse happens.
I laughed so hard when i was reading this
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