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"The rising price of housing does not go into the inflation index".
-Gerald Celente, Founder; Trends Journal.
Am I watching the wrong financial channels?.
If so, I do appreciate the better education.
As they shouldnt ...the value is not consumed in that point in time ..
As consumed the best way to account for them is have the owners rent them themselves at the going rate ...
The CPI is only a price change index of consumed goods and services at that moment through out the 1500 mini Economies ..it is not reflective of anyone’s personal cost of living .
It is only a price change index on goods and services
To a lesser extent - another inflation case study I remember studying in school was Britain in the 1970s. And America too. I remember quite well the blame being put on "easy money" policies of central banks. Ironically the Fed itself says that was the reason.
Yet today we have "easy money" times trillions and the inflation just isn't there. The rise in prices where it's happening has to do with covid screwing everything up.
The Fed did QE in the 60's. You can see that CPI went from under 2 percent to just under 6 percent by 1970. That was when they stopped. Like Trump, Nixon put pressure on Burns to drop interest rates to avoid a recession before the election.
It's much easier to falsify economic data and spin the news today with the computers with the use of intervention analysis, seasonal adjustments, in-house surveys, and multiple inflation indexes. Inflation and deflation are long-run phenomena. All these special tricks to manipulate the indices aren't needed with the appropriate explanation for the variations from the 'norm'. They would adjust by learning to read the information on an annual basis to determine trends.
Covid had been circulating in Europe before it reached Lombardy, Italy which has popular skiing resorts.
It still doesn't rule out China as the origin and doesn't rule out the possibility that SARS evolved over 20 years. Viruses never really completely disappear (see Polio).
Basically CPI does not account for "new" rent and doesn't even try to factor the housing market which they view as an investment market. In other words, there's an inequity in the way the calculation works that is technically true, but for someone on the market trying to secure housing, the calculation does not reflect their reality at all.
As Mathjak has said,things like rent control in large markets like NYC distort the calculation. They also survey a lot metros where rents are less, especially for long term renters. But if that renter leaves, the unit will then convert to market price which might be 200% more than the controlled rent was. The calculation is not picking that up.
As an example, because I've owned my house for a while AND refinanced, my housing is cost is down. But were I to sell or rent the house, the new owners or renters would pay about double what I pay monthly.
Last edited by redguard57; 04-21-2021 at 02:49 PM..
Basically CPI does not account for "new" rent and doesn't even try to factor the housing market which they view as an investment market. In other words, there's an inequity in the way the calculation works that is technically true, but for someone on the market trying to secure housing, the calculation does not reflect their reality at all.
As Mathjak has said,things like rent control in large markets like NYC distort the calculation. They also survey a lot metros where rents are less, especially for long term renters. But if that renter leaves, the unit will then convert to market price which might be 200% more than the controlled rent was. The calculation is not picking that up.
As an example, because I've owned my house for a while AND refinanced, my housing is cost is down. But were I to sell or rent the house, the new owners or renters would pay about double what I pay monthly.
No rent stabilized apartments here in nyc convert to market price when a tenant leaves ...they are allowed up to a capped amount on a vacancy depending how long the prior tenant was there and where the rent is ....the max is 19% ...
But it all depends where markets are .
My wife has lived where we are for 40 years ..we are stabilized but pretty much at market ..so any big increases would put the apartments over market and hard to rent
No rent stabilized apartments here in nyc convert to market price when a tenant leaves ...they are allowed up to a capped amount on a vacancy depending how long the prior tenant was there and where the rent is ....the max is 19% ...
But it all depends where markets are .
My wife has lived where we are for 40 years ..we are stabilized but pretty much at market ..so any big increases would put the apartments over market and hard to rent
I see. I'm always confused how rent control works.
I see. I'm always confused how rent control works.
Rent control and rent stabilization are as different as can be ...we hardly have ant rent controlled apartments left ..about 1% of rentals are still rent controlled...overs 60% are rent stabilized.
Rent controlled apartments apply to people who are in them continuously since 1971 ...
When they or those living with them die or leave the apartment becomes rent stabilized.
Rent controlled apartments are the apartments your hear about with crazy low rents ...stabilized apartments may range from well below market but no where near rent controlled to 4-6k a month for an apartment.
There are no income or asset restrictions on rent stabilized...most New Yorkers who live in buildings over 5 family are stabilized
"The rising price of housing does not go into the inflation index".
-Gerald Celente, Founder; Trends Journal.
Am I watching the wrong financial channels?.
If so, I do appreciate the better education.
Yes. Assuming he was talking about the US, if that dude wrote those words in declarative fashion he does not know what he's talking about. FWIIW a number of countries do not account for homeownership costs at all within their versions of CPI.
It's called OER...Owner's Equivalent Rent of Primary Residence. What would the place rent for currently. The US, Germany, Japan, Denmark, The Netherlands, Switzerland and some others use OER to account for homeownership (imputed rents) within CPI.
OER isn't perfect but it works well enough over time.
Basically CPI does not account for "new" rent and doesn't even try to factor the housing market which they view as an investment market. In other words, there's an inequity in the way the calculation works that is technically true, but for someone on the market trying to secure housing, the calculation does not reflect their reality at all.
As Mathjak has said,things like rent control in large markets like NYC distort the calculation. They also survey a lot metros where rents are less, especially for long term renters. But if that renter leaves, the unit will then convert to market price which might be 200% more than the controlled rent was. The calculation is not picking that up.
As an example, because I've owned my house for a while AND refinanced, my housing is cost is down. But were I to sell or rent the house, the new owners or renters would pay about double what I pay monthly.
Delete that. Your thesis is wrong.
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