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In much the same way, Walmart/Tesco/etc reduce the food supply. How can a poor person possibly get enough to eat when they must compete with the near infinite s
by yummyfajitas 10y ago
In much the same way, Walmart/Tesco/etc reduce the food supply. How can a poor person possibly get enough to eat when they must compete with the near infinite spending power of Walmart? There must be mass starvation!
Similarly, if you own real estate and rent it out you aren't reducing the housing supply.
Your hypothetical weathly person might choose to buy 67,000 flats and gain monopoly power over their rents.
You don't get monopoly power over rents by buying 67,000 flats (out of a millions).
- pjmorris 10y agoPeople usually don't take out loans to buy groceries. The money/credit supply matters when buying houses. Note, too, that I'm arguing that the price is affected, not the supply. As the GP points out, those who can pay cash for a house are at significant advantage to those who must borrow. As I repeat, houses can be bought as investments as well as 'consumables'. Maybe buying 67,000 houses isn't enough to monopolize the market, but I'll argue that the 1.7T the Fed has injected in to the housing market over the last decade through its purchases of mortgage-backed-securities [1] has had an effect on house prices similar to the 'wealth-owner' the GP describes. On a smaller scale, are you willing to argue that property values in Palo Alto aren't affected by purchases like Mark Zuckerberg's? [2] [1] https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1 https://www.federalreserve.gov/releases/h41/current/h41.htm#... [3] http://money.cnn.com/2016/05/25/technology/mark-zuckerberg-palo-alto-house/ http://money.cnn.com/2016/05/25/technology/mark-zuckerberg-p...
- deleted 10y ago[deleted]