4 ms·
Stop printing money.
by grabarz 8y ago
Stop printing money.
- posix_compliant 8y agoCould you elaborate?
- ShabbosGoy 8y agoIt’s not really a solution so much as it is a bandaid. Sure, you could raise interest rates and nominal house prices will go down. But it doesn’t solve the problem of limited housing supply in places like the Bay Area.
- jMyles 8y agoIt's not a terribly elaborate solution, just a simple and good one: let's have the federal reserve stop promoting monetary policy that encourages reckless spending, easy money, expensive houses, and tons of plastic shit. Some people present it as a solution to all the world's ills, which it is far from. But it's a good foundation for many solutions for many ills.
- ShabbosGoy 8y agoIt still won’t matter in real terms. Real housing prices will still continue to rise, until the fundamental housing shortage is solved in places like the Bay Area.
- pjmorris 8y agoNot GP, and this comment is copied from earlier in my history, but... One example: the US central bank's (Fed) Quantitative Easing (QE). In my view, QE's inflation happened before QE started. A significant purpose of QE was to prop up the loans made before the financial crisis. The inflation happened with the creation of trillions of dollars of securitized sub-prime housing loans. Rather than allowing those loans to default, the Fed is acting as a buyer of last resort through QE MBS purchases [0]. Without the Fed, much less money would be available for housing loans, and their prices would return to historical ratios to income [1, 2]. [0] https://fred.stlouisfed.org/series/MBST https://fred.stlouisfed.org/series/MBST [1] https://archive.nytimes.com/www.nytimes.com/imagepages/2006/.. https://archive.nytimes.com/www.nytimes.com/imagepages/2006/.... [2] Blue line in http://www.econ.yale.edu/~shiller/data/Fig3-1.xls http://www.econ.yale.edu/~shiller/data/Fig3-1.xls