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Well, the problem is...they have no wealth. They may have low paying jobs or even two jobs. Or a reasonable job yet high debts or living expenses. Barely gettin

by fleddr 5y ago

Well, the problem is...they have no wealth. They may have low paying jobs or even two jobs. Or a reasonable job yet high debts or living expenses. Barely getting by, with no prospect of ever building up more meaningful wealth. It's super cool that their 5K turns into 6K in 10 years time, but that doesn't do anything. You might as well turn it into 100K. Or lose it all. Fuck it. I don't think you understand the dire situation of younger generations. In my country, the AVERAGE home costs 485K USD. The median salary is 36K. Young people have salaries lower than that. This allows for a mortgage of 166K. So unless you're born rich, you won't ever get a house. Perhaps they can rent then, and meanwhile save up? No. Private rent eats up so much of their salary that there's no room to save. Which would be pointless anyway as real estate appreciates faster. They can't move out, they can't start a family. These people have a life to live. My dad was 19 when he had a rental house, married, two kids, and 50% of disposable income on a job requiring no education. Now people are 35 and still don't have the basics in place. Hence, crypto. Which is not just a bet. It's an expression of full distrust against the supposed "sane" traditional system. Why not focus on the real issues? Because they are unsolvable. Wages cannot rise significantly as nations compete in global capitalism. Real estate won't become much cheaper. Jobs security will not increase and student debt is unlikely to be forgiven. If a young person working full time cannot afford a roof over their head or start a family, is in perpetual debt, and has zero job security, perhaps some start to wonder what the point of it all is.

qeternity 5y ago
> It's super cool that their 5K turns into 6K in 10 years time Ok, I get it. You’ve not actually looked at what other investments are like. 20% return over 10 years? The S&P 500 is on track to do that this year, after one of the biggest rallies in history last year. $5k invested just before the covid collapse would still be worth far more than $6k, and that’s 18 months through a global pandemic. That said, your answered your own issue: homes are unaffordable. I’m with you on that: we turned housing into retirement plans for boomers. And now we don’t know what to do about it. There’s an old adage in commodities trading: the best cure for high prices is high prices. The meaning behind this is that when prices are too high and people can’t or won’t buy, then prices can only go down. Over the next few decades, young people will either earn substantially more, or housing will become substantially cheaper. You can’t sell anyone a home for $485k if they can only get a $166k mortgage. So these things will converge.
- fleddr 5y ago
  As much as I enjoy pissing on boomers, older home owners did nothing for their houses to appreciate. It's just something that happens due to monetary policy, low interest rates, local scarcity of supply and a growing population. A lesser known reason is that since the 2008 crisis, hardly any new homes got built. Whilst the underlying demand was still in place, and growing. "You can’t sell anyone a home for $485k if they can only get a $166k mortgage" You only need enough buyers that can afford a 485K mortgage to meet supply. So when supply is very low (which in my country is very much true), if only 25% of the potential buyers can afford that mortgage it's still enough to buy the supply. Which they do, and they even overbid still. So this can keep going for a long while. Not even a crash solves it. Our 2008 crash dropped prices by 20% only. Which is now the gain in a single year. So that leaves the only other option you mention: wages.
  - qeternity 5y ago
    > As much as I enjoy pissing on boomers, older home owners did nothing for their houses to appreciate. It's just something that happens due to monetary policy, low interest rates, local scarcity of supply and a growing population. All the things you mention, boomers did that. Monetary policy was drafted by boomers, for boomers, to protect and enrich boomers (low interest rates being one outcome). We printed trillions last year to protect boomers at the expense of young people. Scarcity is a function of zoning laws, again drafted by boomers to protect the value of their nest egg. It’s 100% their fault.
    - imtringued 5y ago
      >enrich boomers (low interest rates being one outcome) Why does it matter if you pay $1000 per month on interest or $1000 per month on the principal? The monthly payment is the same. The only difference is that the bank takes less of your money.
  - loeg 5y ago
    Boomers absolutely constrained supply to raise prices.
imtringued 5y ago
>Wages cannot rise significantly as nations compete in global capitalism. They can. If every country did balanced trade then there wouldn't be anything wrong with global trade. You'd get the benefits without any of the downsides. It's when countries export more than they intend to import that things are getting worse. Of course, balanced trade wouldn't allow the existence of global reserve currencies. The USD would have to give up a meaningless benefit.

by fleddr 5y ago

qeternity 5y ago

> It's super cool that their 5K turns into 6K in 10 years time Ok, I get it. You’ve not actually looked at what other investments are like. 20% return over 10 years? The S&P 500 is on track to do that this year, after one of the biggest rallies in history last year. $5k invested just before the covid collapse would still be worth far more than $6k, and that’s 18 months through a global pandemic. That said, your answered your own issue: homes are unaffordable. I’m with you on that: we turned housing into retirement plans for boomers. And now we don’t know what to do about it. There’s an old adage in commodities trading: the best cure for high prices is high prices. The meaning behind this is that when prices are too high and people can’t or won’t buy, then prices can only go down. Over the next few decades, young people will either earn substantially more, or housing will become substantially cheaper. You can’t sell anyone a home for $485k if they can only get a $166k mortgage. So these things will converge.

fleddr 5y ago
As much as I enjoy pissing on boomers, older home owners did nothing for their houses to appreciate. It's just something that happens due to monetary policy, low interest rates, local scarcity of supply and a growing population. A lesser known reason is that since the 2008 crisis, hardly any new homes got built. Whilst the underlying demand was still in place, and growing. "You can’t sell anyone a home for $485k if they can only get a $166k mortgage" You only need enough buyers that can afford a 485K mortgage to meet supply. So when supply is very low (which in my country is very much true), if only 25% of the potential buyers can afford that mortgage it's still enough to buy the supply. Which they do, and they even overbid still. So this can keep going for a long while. Not even a crash solves it. Our 2008 crash dropped prices by 20% only. Which is now the gain in a single year. So that leaves the only other option you mention: wages.
- qeternity 5y ago
  > As much as I enjoy pissing on boomers, older home owners did nothing for their houses to appreciate. It's just something that happens due to monetary policy, low interest rates, local scarcity of supply and a growing population. All the things you mention, boomers did that. Monetary policy was drafted by boomers, for boomers, to protect and enrich boomers (low interest rates being one outcome). We printed trillions last year to protect boomers at the expense of young people. Scarcity is a function of zoning laws, again drafted by boomers to protect the value of their nest egg. It’s 100% their fault.
  - imtringued 5y ago
    >enrich boomers (low interest rates being one outcome) Why does it matter if you pay $1000 per month on interest or $1000 per month on the principal? The monthly payment is the same. The only difference is that the bank takes less of your money.
- loeg 5y ago
  Boomers absolutely constrained supply to raise prices.

imtringued 5y ago

>Wages cannot rise significantly as nations compete in global capitalism. They can. If every country did balanced trade then there wouldn't be anything wrong with global trade. You'd get the benefits without any of the downsides. It's when countries export more than they intend to import that things are getting worse. Of course, balanced trade wouldn't allow the existence of global reserve currencies. The USD would have to give up a meaningless benefit.