5 ms·

Well, yes, if you accept some official-inflation-is-fake conspiracy theory as a premise you can reach many interesting conclusions.

ClumsyPilot 6y ago
Its not fit for purpose, just like the fact that we celebrate increasing GDP while life expectancy has been stagnant or declining
frongpik 6y ago
It's not conspiracy, but an observation that hamburgers, cars, houses and yachts inflate at different rates. The gov inflation concerns hamburgers, but someone's making 200k really needs housing and that inflates much faster.
- TheTrotters 6y ago
  1. Rents are included in the CPI. 2. This confuses relative price changes with inflation.
  - dominotw 6y ago
    > 1. Rents are included in the CPI. Rents have remained low in my city but housing prices( which GP is talking about) have gone up over 30% last 2 years. Its pretty easy to find a rental but almost impossible to buy a house here.
- medvezhenok 6y ago
  Here is housing: https://fred.stlouisfed.org/series/CPIHOSNS https://fred.stlouisfed.org/series/CPIHOSNS House prices are simply bonds tied to rent value and interest rate and affected by certain demographic trends. The all-told carrying costs of a mortgage right now are actually lower than they were 30 years ago, considering inflation (the principal might be higher and you don't get the tailwind of dropping rates to rebalance and whatnot, but it doesn't change the fact that houses are technically more affordable, not less). Edit: Here's a graph of housing prices when adjusted for inflation & mortgage rates: https://realestatedecoded.com/the-shocking-truth-about-house-prices-since-1990/ https://realestatedecoded.com/the-shocking-truth-about-house... (although the down-payment is more unaffordable, yes, but you can generally buy things with as low as 3.5% down)
  - dominotw 6y ago
    > but you can generally buy things with as low as 3.5% down no way. It is so competitive here that buyers are inundated with all cash offers.
    - medvezhenok 6y ago
      https://accept.inc/ https://accept.inc/ converts your mortgage approval into an all-cash offer. (Edit: looks like that's only for Colorado) The craziness going on right now is due to several factors: (1) all time low supply due to pandemic restrictions/fears; (2) Work from home transforming housing values (single family homes a lot more appealing if you only work from the office occasionally); (3) Millennials aging into the housing market and boomers holding on to their properties (see 1) - also a lot of stock is now owned by investment companies / pension funds past 2008; (4) Housing is the safest way to take a leveraged short on the US dollar (which a lot of people fearing inflation want to do); (5) Capital flight from other countries like China (though that was more of a factor pre-pandemic) - real-estate is the only industry where anti money laundering provisions are severely watered down / non-existent.
      - dominotw 6y ago
        uh ok. I guess i'll be renting forever :D. But hey govt says inflation is low, so all good.

ClumsyPilot 6y ago

Its not fit for purpose, just like the fact that we celebrate increasing GDP while life expectancy has been stagnant or declining

frongpik 6y ago

It's not conspiracy, but an observation that hamburgers, cars, houses and yachts inflate at different rates. The gov inflation concerns hamburgers, but someone's making 200k really needs housing and that inflates much faster.

TheTrotters 6y ago
1. Rents are included in the CPI. 2. This confuses relative price changes with inflation.
- dominotw 6y ago
  > 1. Rents are included in the CPI. Rents have remained low in my city but housing prices( which GP is talking about) have gone up over 30% last 2 years. Its pretty easy to find a rental but almost impossible to buy a house here.
medvezhenok 6y ago
Here is housing: https://fred.stlouisfed.org/series/CPIHOSNS https://fred.stlouisfed.org/series/CPIHOSNS House prices are simply bonds tied to rent value and interest rate and affected by certain demographic trends. The all-told carrying costs of a mortgage right now are actually lower than they were 30 years ago, considering inflation (the principal might be higher and you don't get the tailwind of dropping rates to rebalance and whatnot, but it doesn't change the fact that houses are technically more affordable, not less). Edit: Here's a graph of housing prices when adjusted for inflation & mortgage rates: https://realestatedecoded.com/the-shocking-truth-about-house-prices-since-1990/ https://realestatedecoded.com/the-shocking-truth-about-house... (although the down-payment is more unaffordable, yes, but you can generally buy things with as low as 3.5% down)
- dominotw 6y ago
  > but you can generally buy things with as low as 3.5% down no way. It is so competitive here that buyers are inundated with all cash offers.
  - medvezhenok 6y ago
    https://accept.inc/ https://accept.inc/ converts your mortgage approval into an all-cash offer. (Edit: looks like that's only for Colorado) The craziness going on right now is due to several factors: (1) all time low supply due to pandemic restrictions/fears; (2) Work from home transforming housing values (single family homes a lot more appealing if you only work from the office occasionally); (3) Millennials aging into the housing market and boomers holding on to their properties (see 1) - also a lot of stock is now owned by investment companies / pension funds past 2008; (4) Housing is the safest way to take a leveraged short on the US dollar (which a lot of people fearing inflation want to do); (5) Capital flight from other countries like China (though that was more of a factor pre-pandemic) - real-estate is the only industry where anti money laundering provisions are severely watered down / non-existent.
    - dominotw 6y ago
      uh ok. I guess i'll be renting forever :D. But hey govt says inflation is low, so all good.