6 ms·

>The FED ruined young peoples ability to afford a home. House prices have certainly risen substantially in the last few years [1]. But if the FED is to blame,

>The FED ruined young peoples ability to afford a home. House prices have certainly risen substantially in the last few years [1]. But if the FED is to blame, why has the same thing happened in the UK [2], Germany [3] and Australia [4] ? [1] https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/QUSR628BIS [2] https://fred.stlouisfed.org/series/QGBN628BIS https://fred.stlouisfed.org/series/QGBN628BIS [3] https://fred.stlouisfed.org/series/QDER628BIS https://fred.stlouisfed.org/series/QDER628BIS [4] https://fred.stlouisfed.org/series/QAUR628BIS https://fred.stlouisfed.org/series/QAUR628BIS

lordnacho 5y ago
Because interest rates went down in those countries as well? We're only just coming off the lowest rates ever in the UK. The Euro hasn't existed for long but record lows there too. Oz as well.
- arcticbull 5y ago
  Why hasn't the same thing happened in Japan, which has tripled its money supply since 1990? House prices (and the price of everything else) has remained dead-ass flat. The difference is the have federal zoning rules that allow the supply of houses to meet the demand of houses.
  - adam_arthur 5y ago
    Japan has a declining population. Residential real estate inevitably declines with this demographic trajectory. More housing units per person. Also Japan did not have a lot of nimby mentality blocking new housing, to my knowledge Lower rates offsets the price reduction to a certain extent.
    - CountSessine 5y ago
      Japan has a declining population. Residential real estate inevitably declines with this demographic trajectory. The Kansai region has an increasing population and real estate prices are still in decline or stable. Also Japan did not have a lot of nimby mentality blocking new housing, to my knowledge Yes, they did - prior to 2001 when the national government took zoning authority away from municipalities.
      - adam_arthur 5y ago
        FRED shows housing prices in aggregate rising in Japan https://fred.stlouisfed.org/series/QJPN628BIS https://fred.stlouisfed.org/series/QJPN628BIS If a growing region is declining, I would expect building to be outpacing growth, or a cultural trend away from wanting to own (reduction in demand for purchasing despite growing population)
        arcticbull 5y ago
        All that would mean is its a market where supply >= demand. The weights on the scale aren't as relevant, IMO.
  - rcpt 5y ago
    Japan price to income ratio is bad but that speaks more to horrifically low wages. They've also been more aggressive about taxing real estate investment (they leaned their lesson in the 80s) and their zoning laws aren't captured by local busybodies.
- padobson 5y ago
  It's also worth mentioning that every developed nation has a heavy interest in the value of the dollar, because of trade with the US, petrodollars, etc.
deleted 5y ago
[deleted]
azth 5y ago
The reason is simple: the corrupt nature of the global financial system today, which is based on strictly immoral and parasitic practices such as money lending with interest, money printing, gambling (e.g put and call options), selling debt for debt, shorting (selling what you don't own), etc. It's one big casino folks, and it is rigged to benefit the select few at the top.
01100011 5y ago
The USD is the world's reserve currency and loose monetary policy since 2008 is likely spilling over into economies across the globe. If you can get an artificially low rate loan in USD you can convert it to your local currency. It doesn't matter so much what your central bank does.
- ChrisLomont 5y ago
  Conflating reserve currency with loan backings is like mixing Thursday with vaseline - it makes no sense. For example, UK has at most $87B of foreign currency reserves, a fraction of which is USD. [1] UK has 9.2T in privately owned homes [2]. So reserve currency can back at best a tiny, likely sub percent, of all home loan amounts. And, this is the kicker, the UK does not hold reserve currency to loan to anyone. It's an assert they hold at the national level. So cost increases there (and other countries listed above) are not the result of US being a reserve currency. Don't make up wild claims. [1] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1052151/Statistical_Release_UK_official_holdings_of_international_-_January_2022.pdf https://assets.publishing.service.gov.uk/government/uploads/... [2] https://www.mansionglobal.com/articles/u-k-home-values-have-jumped-20-to-a-total-of-9-2-trillion-since-2016-01634238094 https://www.mansionglobal.com/articles/u-k-home-values-have-...
  - 01100011 5y ago
    Do lower cost loans in USD allow investors and speculators to make investments in markets outside the US? Does artificially created demand in the US allow more consumption of commodities which inflates the price of home building in other countries? Do artificially inflated US asset prices produce a wealth effect in other countries if people in those countries hold those assets? I'm not sure what UK reserve holdings have to do with my comment but I don't know, I'm just some guy on the internet.
    - ChrisLomont 5y ago
      >I'm not sure what UK reserve holdings have to do Your first comment started with "The USD is the world's reserve currency". Do you know what reserve currency means?

lordnacho 5y ago

Because interest rates went down in those countries as well? We're only just coming off the lowest rates ever in the UK. The Euro hasn't existed for long but record lows there too. Oz as well.

arcticbull 5y ago
Why hasn't the same thing happened in Japan, which has tripled its money supply since 1990? House prices (and the price of everything else) has remained dead-ass flat. The difference is the have federal zoning rules that allow the supply of houses to meet the demand of houses.
- adam_arthur 5y ago
  Japan has a declining population. Residential real estate inevitably declines with this demographic trajectory. More housing units per person. Also Japan did not have a lot of nimby mentality blocking new housing, to my knowledge Lower rates offsets the price reduction to a certain extent.
  - CountSessine 5y ago
    Japan has a declining population. Residential real estate inevitably declines with this demographic trajectory. The Kansai region has an increasing population and real estate prices are still in decline or stable. Also Japan did not have a lot of nimby mentality blocking new housing, to my knowledge Yes, they did - prior to 2001 when the national government took zoning authority away from municipalities.
    - adam_arthur 5y ago
      FRED shows housing prices in aggregate rising in Japan https://fred.stlouisfed.org/series/QJPN628BIS https://fred.stlouisfed.org/series/QJPN628BIS If a growing region is declining, I would expect building to be outpacing growth, or a cultural trend away from wanting to own (reduction in demand for purchasing despite growing population)
      - arcticbull 5y ago
        All that would mean is its a market where supply >= demand. The weights on the scale aren't as relevant, IMO.
- rcpt 5y ago
  Japan price to income ratio is bad but that speaks more to horrifically low wages. They've also been more aggressive about taxing real estate investment (they leaned their lesson in the 80s) and their zoning laws aren't captured by local busybodies.
padobson 5y ago
It's also worth mentioning that every developed nation has a heavy interest in the value of the dollar, because of trade with the US, petrodollars, etc.

deleted 5y ago

[deleted]

azth 5y ago

The reason is simple: the corrupt nature of the global financial system today, which is based on strictly immoral and parasitic practices such as money lending with interest, money printing, gambling (e.g put and call options), selling debt for debt, shorting (selling what you don't own), etc. It's one big casino folks, and it is rigged to benefit the select few at the top.

01100011 5y ago

The USD is the world's reserve currency and loose monetary policy since 2008 is likely spilling over into economies across the globe. If you can get an artificially low rate loan in USD you can convert it to your local currency. It doesn't matter so much what your central bank does.

ChrisLomont 5y ago
Conflating reserve currency with loan backings is like mixing Thursday with vaseline - it makes no sense. For example, UK has at most $87B of foreign currency reserves, a fraction of which is USD. [1] UK has 9.2T in privately owned homes [2]. So reserve currency can back at best a tiny, likely sub percent, of all home loan amounts. And, this is the kicker, the UK does not hold reserve currency to loan to anyone. It's an assert they hold at the national level. So cost increases there (and other countries listed above) are not the result of US being a reserve currency. Don't make up wild claims. [1] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1052151/Statistical_Release_UK_official_holdings_of_international_-_January_2022.pdf https://assets.publishing.service.gov.uk/government/uploads/... [2] https://www.mansionglobal.com/articles/u-k-home-values-have-jumped-20-to-a-total-of-9-2-trillion-since-2016-01634238094 https://www.mansionglobal.com/articles/u-k-home-values-have-...
- 01100011 5y ago
  Do lower cost loans in USD allow investors and speculators to make investments in markets outside the US? Does artificially created demand in the US allow more consumption of commodities which inflates the price of home building in other countries? Do artificially inflated US asset prices produce a wealth effect in other countries if people in those countries hold those assets? I'm not sure what UK reserve holdings have to do with my comment but I don't know, I'm just some guy on the internet.
  - ChrisLomont 5y ago
    >I'm not sure what UK reserve holdings have to do Your first comment started with "The USD is the world's reserve currency". Do you know what reserve currency means?