3 ms·

Eventually an exponential-style tax would be too prohibitive for them to buy the nth house and they'd have to tap out, no? Can't pass off those costs forever, e

Eventually an exponential-style tax would be too prohibitive for them to buy the nth house and they'd have to tap out, no? Can't pass off those costs forever, eventually it's too much for even the most well-off renter.

mistermann 5y ago
Look at all the discretionary spending out there that can still be sucked into rent though: restaurants, clothing, movies, all food other than rice and beans, etc. Yes of course it's easy to call this hyperbolic, worst case scenario fear mongering, but then look at a long term chart for Canadian housing prices, and also the political response to it: essentially nothing, other than a bit of standard political rhetoric during the last election, which will be ignored just as Trudeau's electoral reform promises were ignored, and no one will get too excited because everyone seems to have subconsciously accepted that politics is essentially pure theatre - about the only thing most people seem to care much about now is not electing Nazis. It's easy (and fun!) for people to dismiss this blogger's concerns, but I think his numbers are fairly workable, and he's not even taking into account the possibility that rent starts to suck in the entire economy. Of course, this is "impossible"...except, maybe it actually isn't. As for myself, I think the situation is even worse than he says. His proposed solution seems to be various political policy reforms, which is the proper traditional approach. But my intuition tells me that this cannot work, even though my logical mind disagrees. I have this feeling that there are various sorts of emergent phenomena now in play, forces that we cannot detect, and maybe couldn't even understand if we could detect them. And you know what they say about things that can't be detected: they do not exist, as logic and critical thinking (the new and improved versions) tell us, of course. For starters, I don't think a party could even get elected on a platform of reform. And even if they did, I don't think they would be able to reform anything. I think we have lost control not only of the (financial, political, etc) system, but also of our minds. It seems like we are all riding along on this massive, complex machine, that nobody designed, nobody knows how to operate, and maybe most importantly: no one seems to realize that they do not know how to operate it, or even that we are riding on it in the first place. So far, printing money whenever we get ourselves into a pinch has always saved our asses, but at some point I think we're going to try this option and it won't work, and that is when the chickens will come home to roost, the sins of the fathers will be visited upon the sons, etc etc etc. Obviously, this is wild, illogical speculation, and parts of it are "surely" wrong. But that doesn't mean it is incorrect in the aggregate. Complex systems are complex, emergence is a genuine phenomenon, things have been getting weirder and weirder for quite some time now, and the mood of the public in general and toward each other is "not great". I think we have all the makings needed for a debacle of historic proportions, including the necessary mindset.
- m_ke 5y ago
  One of my favorite charts is the percentage of gdp by sector in the US. It tells the whole story: https://lh3.googleusercontent.com/proxy/IbcnWz6KrHkAYuJLpPzuwjxF_Sz8zAjhRplXl4P4PLVI1AVhD35a5HmRdWzZijDCQ6bPbTQHOfNgOnNpy3GzRVWUsDQAd2N5qer9J-_IMVOABkTkMudWCC4SdaIa5-SzGWb-QsTKgsAKhBnWQkOlJg https://lh3.googleusercontent.com/proxy/IbcnWz6KrHkAYuJLpPzu... https://cms.zerohedge.com/s3/files/inline-images/fire_economy.png?itok=Rx25qNCu https://cms.zerohedge.com/s3/files/inline-images/fire_econom...
- MrMetlHed 5y ago
  I think (fear) you may be right about a lot of this. My worry is that if enough houses get bought up by large corporations there won't be the political will to let them fail or impose restrictions on them. The time to act seems to be now, and lord knows we don't do much of anything until the crisis point has already passed.

mistermann 5y ago

Look at all the discretionary spending out there that can still be sucked into rent though: restaurants, clothing, movies, all food other than rice and beans, etc. Yes of course it's easy to call this hyperbolic, worst case scenario fear mongering, but then look at a long term chart for Canadian housing prices, and also the political response to it: essentially nothing, other than a bit of standard political rhetoric during the last election, which will be ignored just as Trudeau's electoral reform promises were ignored, and no one will get too excited because everyone seems to have subconsciously accepted that politics is essentially pure theatre - about the only thing most people seem to care much about now is not electing Nazis. It's easy (and fun!) for people to dismiss this blogger's concerns, but I think his numbers are fairly workable, and he's not even taking into account the possibility that rent starts to suck in the entire economy. Of course, this is "impossible"...except, maybe it actually isn't. As for myself, I think the situation is even worse than he says. His proposed solution seems to be various political policy reforms, which is the proper traditional approach. But my intuition tells me that this cannot work, even though my logical mind disagrees. I have this feeling that there are various sorts of emergent phenomena now in play, forces that we cannot detect, and maybe couldn't even understand if we could detect them. And you know what they say about things that can't be detected: they do not exist, as logic and critical thinking (the new and improved versions) tell us, of course. For starters, I don't think a party could even get elected on a platform of reform. And even if they did, I don't think they would be able to reform anything. I think we have lost control not only of the (financial, political, etc) system, but also of our minds. It seems like we are all riding along on this massive, complex machine, that nobody designed, nobody knows how to operate, and maybe most importantly: no one seems to realize that they do not know how to operate it, or even that we are riding on it in the first place. So far, printing money whenever we get ourselves into a pinch has always saved our asses, but at some point I think we're going to try this option and it won't work, and that is when the chickens will come home to roost, the sins of the fathers will be visited upon the sons, etc etc etc. Obviously, this is wild, illogical speculation, and parts of it are "surely" wrong. But that doesn't mean it is incorrect in the aggregate. Complex systems are complex, emergence is a genuine phenomenon, things have been getting weirder and weirder for quite some time now, and the mood of the public in general and toward each other is "not great". I think we have all the makings needed for a debacle of historic proportions, including the necessary mindset.

m_ke 5y ago
One of my favorite charts is the percentage of gdp by sector in the US. It tells the whole story: https://lh3.googleusercontent.com/proxy/IbcnWz6KrHkAYuJLpPzuwjxF_Sz8zAjhRplXl4P4PLVI1AVhD35a5HmRdWzZijDCQ6bPbTQHOfNgOnNpy3GzRVWUsDQAd2N5qer9J-_IMVOABkTkMudWCC4SdaIa5-SzGWb-QsTKgsAKhBnWQkOlJg https://lh3.googleusercontent.com/proxy/IbcnWz6KrHkAYuJLpPzu... https://cms.zerohedge.com/s3/files/inline-images/fire_economy.png?itok=Rx25qNCu https://cms.zerohedge.com/s3/files/inline-images/fire_econom...
MrMetlHed 5y ago
I think (fear) you may be right about a lot of this. My worry is that if enough houses get bought up by large corporations there won't be the political will to let them fail or impose restrictions on them. The time to act seems to be now, and lord knows we don't do much of anything until the crisis point has already passed.