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I wonder what the US going into a deflationary spiral would mean for real estate like rental houses? When economists say deflationary spiral do they mean prices
by stx 6y ago
I wonder what the US going into a deflationary spiral would mean for real estate like rental houses? When economists say deflationary spiral do they mean prices of assets (like houses) would fall?
- mindslight 6y agoWhen economic priests invoke the deflationary spiral, they mean some ambiguous boogeyman that you're supposed to be scared of so they can keep printing money and handing it to the politically connected, as they're doing here. Deflation is the natural state of things, as we are continually figuring out how to be more efficient. We've had extreme deflation in the technology industry going on several decades, and the results have been fantastic. It is only a bad thing for the slavedrivers that want to keep everyone working full time doing fake jobs.
- toomuchtodo 6y agoUnderrated comment. Need a tech accelerator that is the inverse of the Fed, optimizing for minimum employment instead of maximum employment (one of the Fed's two mandates).
- mindslight 6y agoEvery accelerator, VC firm, corporation, division, manager, line worker, and homemaker is already optimizing for minimum employment. Human ingenuity at work - seeing patterns for where improvements can be made to ultimately achieve more. Even a guy laying on a couch watching football is trying to figure out how he can get another beer without having to get up. Then the Federal Reserve comes along, declares all of our progress problematic, and manipulates the currency we transact in to make our progress invisible to each other.
- three_seagrass 6y agoIgnoring the appeal to nature, the tech industry has been extremely volatile for several decades. We're in the middle of a dot-com bust equivalent for the entire economy, because of natural forces, and it's not beneficial.
- mindslight 6y agoThe volatility is due to that cheap financial sector money, making nonsensical bets until the music stops. Big picture, we were definitely due to a correction. VCs were paying to litter the landscape with electric scooters, hoping to create some kind of recurring income stream from people renting inexpensive consumer goods. Slowing down is never beneficial to the individuals getting laid off, which is why these destructive policies enjoy broad support. If 90% of the work is required, and everybody is still expected to work the same full time, then 10% of people are left without chairs. Focusing on the first condition is the path to make-work. Focusing on the second condition is what we need to do instead.
- three_seagrass 6y agoThis is bordering on a no-true scotsman. See, the true tech industry doesn't have problems, that whole dot-com bust was because of the financial industry. Nevermind that the two are intertwined and that claiming one is provincial alone is misleading.
- mindslight 6y agoIt's a valid distinction. The decades-long many orders-orders-of-magnitude drop in the price of computing hasn't been responsible for investment money periodically drying up, but it has put a 90's era supercomputer into everyone's pocket.
- daed 6y agoTheoretically, since "housing" is part of CPI prices could fall. But, real estate is difficult to predict: - low interest rates boost home prices, as lower monthly payments increase "how much" house a buyer can afford - as the post states, the Fed's actions are increasing income inequality. If rich people are getting richer, and they don't want to put their money in treasuries because the yield is zero, that money has to go somewhere. So stocks, bonds, real estate. So that may increase demand for real estate among the wealthy. But, nobody knows.