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It's actually the opposite that will need to be dealt with. How much of the recent stock market gains are due to a hidden inflation thanks to the trillions of
by sigmaprimus 6y ago
It's actually the opposite that will need to be dealt with.
How much of the recent stock market gains are due to a hidden inflation thanks to the trillions of dollars being borrowed (or printed) by all the governments around the world?
Get ready for 2 dollar eggs and 20 dollar loaves of bread!
- csomar 6y agoIt’s possible it doesn’t result in inflation if the general public doesn’t benefit from the stock market appreciation. Worse, it might make them poorer if they buy the top. But it probably means hot markets like nyc, sf, la will remain very expensive.
- danieltillett 6y agoI am most sure if NYC and SF are too hot at the moment. It really is hard to say what will happen as the banking system is so different today than in the past. I do think we will see continued leaking of all the new money that is being printed out into hard assets, but beyond that I have no idea.
- eldavido 6y agoShow me another place with 100,000 100k+ jobs. There aren't many markets like this in the US and they're all expensive. NYC, Northern Virginia/DC. Overheated, maybe, but not by much.
- jrott 6y agoYup and clustering effects are still real. Eventually we'll come out of the pandemic and companies will want to be near there biggest customers.
- lumost 6y agoTo the GP's comment, this could be an artifact of a slow-leak inflation. If inflation leaks in some markets faster than others you would see those markets increase in cost and income faster than the average. Boston area condo prices rose 32% from April 2019 to April 2020, at best income increases are keeping pace.
- almost_usual 6y ago> But it probably means hot markets like nyc, sf, la will remain very expensive. All of those cities are seeing price declines. SF will probably bottom out in 6-8 months. Depending on how long these fires burn prices could go down quite a bit.
- api 6y ago... and the $3m starter home?
- greesil 6y agoThat doesn't seem to be what happens when the interest rate for full employment is below zero. I do think it has some other effects, like hedgefunds can easily leverage themselves to buy up assets that normal people want, like houses.
- nitrogen 6y agoSpeaking of houses, I've heard from some local agents that the housing market in my part of Utah is currently dominated by cash offers. They didn't say where the cash was coming from.
- paulryanrogers 6y agoAround my area of the Midwest the cash offers are from investors. Guess the only alternative to equities is real estate.
- Scoundreller 6y ago"Cash" might mean someone with several properties with Equity Lines of Credit on them that they can draw on immediately. E.g. own 5 properties, each 50% mortgage, 50% equity, and 30% of equity immediately available keeping max LTV under 80%. They could immediately buy 1.5 equivalent properties and work out the financing later. They might even get better financing terms because they negotiate without the pressure of "I need you to give me a mortgage, otherwise I can't buy this hot property". If you received two identical offers, 1 contingent on financing, the other cash, you'd take the cash offer.
- rblatz 6y agoWe just put in a cash offer on a house, but we fully intend to put a mortgage the property. But we didn’t make the bid contingent on financing going through. We can cover the cost in cash if we have to, but we would rather not.
- TuringNYC 6y agoCash can also mean that you are selling a home and purchasing a new one with the equity proceeds of the first home (possibly + new savings).