3 ms·

Your other points I can't comment on, but the deflation argument is absolute bunk in terms of small, non-durable goods (groceries, electronics, etc), but when i

Your other points I can't comment on, but the deflation argument is absolute bunk in terms of small, non-durable goods (groceries, electronics, etc), but when it comes to houses and other big purchases (cars, etc.), it absolutely will affect purchasing. You can already see evidence of this now. Houses are at the lowest point in prices that they have been in decades, but people still aren't buying, and they won't until there's some indication that they won't ever be this cheap.

cturner 15y ago
There's lots of factors why people might not be buying houses that have nothing to do with inflation: (1) it's not rational to buy a house when your abillity to meet payments looks undercertain; (2) it's harder to get loans; (3) there's been lots of media about people getting burnt; (4) we've exited the house-buying-mania bubble; (5) related t ofirst point butdifferent, you have much better labour flexibility by renting which is important in hard times. You can already see evidence of this now. Houses are at the lowest point in prices that they have been in decades, but people still aren't buying, and they won't until there's some indication that they won't ever be this cheap. "been in decades" - this would be true of Buffalo and Detroit, but certainly not of San francisco, New York, London, Perth, Sydney, Toronto, Calgary or other places I have an idea about. I think first world property prices are still ridiculous. It's madness to push people to leverage up in order to get into property just so they can store value. I'm not a hedge fund. I don't want to be compelled to behave like one to look after my savings. Now that the music has stopped, people are wising up that housing is not even reliable as a store of value irrespective of their sacrifices.

3 ms·

Your other points I can't comment on, but the deflation argument is absolute bunk in terms of small, non-durable goods (groceries, electronics, etc), but when i

by dclowd9901 15y ago

cturner 15y ago
There's lots of factors why people might not be buying houses that have nothing to do with inflation: (1) it's not rational to buy a house when your abillity to meet payments looks undercertain; (2) it's harder to get loans; (3) there's been lots of media about people getting burnt; (4) we've exited the house-buying-mania bubble; (5) related t ofirst point butdifferent, you have much better labour flexibility by renting which is important in hard times. You can already see evidence of this now. Houses are at the lowest point in prices that they have been in decades, but people still aren't buying, and they won't until there's some indication that they won't ever be this cheap. "been in decades" - this would be true of Buffalo and Detroit, but certainly not of San francisco, New York, London, Perth, Sydney, Toronto, Calgary or other places I have an idea about. I think first world property prices are still ridiculous. It's madness to push people to leverage up in order to get into property just so they can store value. I'm not a hedge fund. I don't want to be compelled to behave like one to look after my savings. Now that the music has stopped, people are wising up that housing is not even reliable as a store of value irrespective of their sacrifices.