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Life is not hard for the rentiers extracting labour for your right to exist in said apartment. Where is all your labour going? Food? No. Transport? No. Energy?

Life is not hard for the rentiers extracting labour for your right to exist in said apartment. Where is all your labour going? Food? No. Transport? No. Energy? No. Rent? Bingo. Why is this happening? Because we came off the gold standard and there is no limit to the expansion of fiat money, therefore it expands via mortgage lending to mop up all productivity gains. Get the women out to work! Land prices up. Efficiency gains? Land prices up. We bid for land. The more we have available after basic living costs the more we can pass over to the rentiers. We need land value tax to suppress rentier activity.

nsxwolf 10y ago
A lot of us landlords barely cover the mortgage with how much we can charge in rent. We don't simply get to increase prices and expect tenants to keep paying.
- branchless 10y ago
  But at the end of it you get a free house for hardly any labour. Yes you have to do a bit now and again but it's hardly a full time job that your tenants have to do to cover your mortgage. I never understand why you guys are doing it if you don't gain. You are doing it because it is easy money, an easy way to extract labour. What are you expecting anyway in terms of an ongoing income stream from this endeavor? It's very low skill, to borrow you need a pulse and a job. To administer you need basic numeracy. Hardly any labour required, certainly not skilled. Sounds like minimum wage for the basic admin required, so what, a few hours a month? The only "value" here is the ability to borrow to exert monopoly control over other wage earners in order to force them to give you a portion of their labour. That is the main ingredient in the majority of cases. Yes we need a rental sector but as I said it's low skill and the rewards should reflect this instead of dividing society into have and have-nots.
  - Hondor 10y ago
    The rewards roughly do reflect this. Ordinary investing isn't clearly better or worse than investing in property. The problem is that ordinary investing requires many years of self discipline while paying a mortgage has the bank holding a stick over you to keep you from wasting your income on lattes and holidays.
    - branchless 10y ago
      "investing"? What are people who take an existing home to restrict supply, then rent it back out, "investing" in? Extorting more like. Disipline paying they mortgage! Is that a skill now, taking $1500 from a worker, trousering $300 then handing the rest to a bank. You are the debt collectors for the banks. Distributed extortion. No skill there yet the rewards for parasites are huge.
ThrustVectoring 10y ago
Gold standard has nothing to do with it. What money is, at a fundamental level, is a promise you can later redeem for real goods and services. Why there's so much mortgage and student loan debt follows directly from the demographic changes - the retiring generation needs promises to provide real goods and services (both directly through saving, and indirectly through pensions and the like), so capital markets seek out the best opportunities to extract these promises and provide them.
- branchless 10y ago
  No, banks are creating credit. https://bankunderground.co.uk/2015/06/30/banks-are-not-intermediaries-of-loanable-funds-and-why-this-matters/ https://bankunderground.co.uk/2015/06/30/banks-are-not-inter... By creating credit faster than the underlying wealth creation of an economy banks are appropriating real goods and services and the wealth generation later (or rather now as they lent for decades like this) and they walk off with the goods whilst we all drown in asset inflation. I would agree that demographics played a big part. Boomers borrowed heavily as though the demogrpahic inversion were not a problem, and banks played along. Now we have the money supply collapse as we have more olds than young, meaning a collapse in credit supply which is a problem as the model requires that principal + interest is paid back which cannot happen unless more debit is issued into the face of loan expiry which destroys the credit but still requires the interest be paid from some other debt source. Why else do we need constant QE and ZIRP? To encourage more borrowing to try and maintain the rate of credit creation to keep the money supply up as boomers pay down at their end of life. What a nuts system and also a terrible one as all productivity gains are soaked up by adaptable pricing on land to capture all gains. excited for my HN "you're submitting too fast" soon when anything about banks or rentiers is mentioned!
  - ThrustVectoring 10y ago
    Credit is money - there's literally no distinction between the two. Precious metal currencies are only money because it takes way less systemic trust to believe that the bearer of precious metal coins can get things for them later. Gold-backed paper currencies are an interesting intermediate, basically adding trust that you can exchange them for the actual metal at banks.
photogrammetry 10y ago
You know, you could actually study why the gold standard is a terrible idea, rather than just fantasizing about it. The financial trickery you're talking about is caused by deregulation and would happen on the gold standard just as often, but with probably far more disastrous consequences.
- branchless 10y ago
  I don't like the gold standard, I agree there. I do however think it provided some break on the unfettered issuance of fiat credit. In any case it seems you agree that unfettered credit issuance is a huge problem, and perhaps the root cause of the upward pressure on asset prices that inevitably moves in step with productivity gains / more work?
deleted 10y ago
[deleted]

nsxwolf 10y ago

A lot of us landlords barely cover the mortgage with how much we can charge in rent. We don't simply get to increase prices and expect tenants to keep paying.

branchless 10y ago
But at the end of it you get a free house for hardly any labour. Yes you have to do a bit now and again but it's hardly a full time job that your tenants have to do to cover your mortgage. I never understand why you guys are doing it if you don't gain. You are doing it because it is easy money, an easy way to extract labour. What are you expecting anyway in terms of an ongoing income stream from this endeavor? It's very low skill, to borrow you need a pulse and a job. To administer you need basic numeracy. Hardly any labour required, certainly not skilled. Sounds like minimum wage for the basic admin required, so what, a few hours a month? The only "value" here is the ability to borrow to exert monopoly control over other wage earners in order to force them to give you a portion of their labour. That is the main ingredient in the majority of cases. Yes we need a rental sector but as I said it's low skill and the rewards should reflect this instead of dividing society into have and have-nots.
- Hondor 10y ago
  The rewards roughly do reflect this. Ordinary investing isn't clearly better or worse than investing in property. The problem is that ordinary investing requires many years of self discipline while paying a mortgage has the bank holding a stick over you to keep you from wasting your income on lattes and holidays.
  - branchless 10y ago
    "investing"? What are people who take an existing home to restrict supply, then rent it back out, "investing" in? Extorting more like. Disipline paying they mortgage! Is that a skill now, taking $1500 from a worker, trousering $300 then handing the rest to a bank. You are the debt collectors for the banks. Distributed extortion. No skill there yet the rewards for parasites are huge.

ThrustVectoring 10y ago

Gold standard has nothing to do with it. What money is, at a fundamental level, is a promise you can later redeem for real goods and services. Why there's so much mortgage and student loan debt follows directly from the demographic changes - the retiring generation needs promises to provide real goods and services (both directly through saving, and indirectly through pensions and the like), so capital markets seek out the best opportunities to extract these promises and provide them.

branchless 10y ago
No, banks are creating credit. https://bankunderground.co.uk/2015/06/30/banks-are-not-intermediaries-of-loanable-funds-and-why-this-matters/ https://bankunderground.co.uk/2015/06/30/banks-are-not-inter... By creating credit faster than the underlying wealth creation of an economy banks are appropriating real goods and services and the wealth generation later (or rather now as they lent for decades like this) and they walk off with the goods whilst we all drown in asset inflation. I would agree that demographics played a big part. Boomers borrowed heavily as though the demogrpahic inversion were not a problem, and banks played along. Now we have the money supply collapse as we have more olds than young, meaning a collapse in credit supply which is a problem as the model requires that principal + interest is paid back which cannot happen unless more debit is issued into the face of loan expiry which destroys the credit but still requires the interest be paid from some other debt source. Why else do we need constant QE and ZIRP? To encourage more borrowing to try and maintain the rate of credit creation to keep the money supply up as boomers pay down at their end of life. What a nuts system and also a terrible one as all productivity gains are soaked up by adaptable pricing on land to capture all gains. excited for my HN "you're submitting too fast" soon when anything about banks or rentiers is mentioned!
- ThrustVectoring 10y ago
  Credit is money - there's literally no distinction between the two. Precious metal currencies are only money because it takes way less systemic trust to believe that the bearer of precious metal coins can get things for them later. Gold-backed paper currencies are an interesting intermediate, basically adding trust that you can exchange them for the actual metal at banks.

photogrammetry 10y ago

You know, you could actually study why the gold standard is a terrible idea, rather than just fantasizing about it. The financial trickery you're talking about is caused by deregulation and would happen on the gold standard just as often, but with probably far more disastrous consequences.

branchless 10y ago
I don't like the gold standard, I agree there. I do however think it provided some break on the unfettered issuance of fiat credit. In any case it seems you agree that unfettered credit issuance is a huge problem, and perhaps the root cause of the upward pressure on asset prices that inevitably moves in step with productivity gains / more work?

deleted 10y ago

[deleted]