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The empirical evidence supports that view - once you drop below the aggregate [0] Housing increases in price because the market doesn't produce enough housing

The empirical evidence supports that view - once you drop below the aggregate [0] Housing increases in price because the market doesn't produce enough housing to go around. During the pandemic we saw the price of Used cars start to rise and behave like housing normally does. Did we call that 'inflation', or did we say 'we need to produce more cars'. That housing increases in price is the sign of an oligopoly, not inflation. Smash the oligopoly, distribute the work around the country and build sufficient houses so that houses depreciate in value and that will fix that particular problem. As it does with cars. [0] https://economicsfromthetopdown.com/2021/11/24/the-truth-about-inflation/ https://economicsfromthetopdown.com/2021/11/24/the-truth-abo...

VirusNewbie 5y ago
Housing increases in price because the market doesn't produce enough housing to go around. Are you claiming that housing supply shrinking during the exact time of M2 expansion is the main reason that housing appreciation skyrocketed compared to other previous years? Even if you make that claim, what's your (separate) theory with equities? As for your link, I read it, it's propaganda and not actual substance. There's no mention of how CPI is calculated with consumer substitution of mind to smooth out increased variance, on top of that this guy completely ignores weighting. No one gives a shit if suddenly tissues and tic tacs are 1/100th of their previous price when rent doubles along with health insurance.
- neilwilson 5y ago
  It's precisely the same 'theory' with equities. The price goes up because there is an inadequate supply of equities - hardly surprising given all the buy backs and lack of new issues. Supply and demand used to be the basis of economics. If prices go up for a thing, that encourages more of the thing to be made. So we fix it by making more stuff. That's what the market clearly wants - more houses and more investment opportunities. The trouble with monetarists who quote 'M' series as thought they were handed down from Mt Sinai is that they are obsessed with looking at the cow from the smelly end. It all becomes clear when you look at it from the smiley end.
  - VirusNewbie 5y ago
    The number of shares has nothing to do with supply. Making “more shares” doesn’t increase supply. What happened with equities is that the dollar became worth less because their are more of them. This is true for everything else except for some physical commodities it is further exacerbated by some physical shortages (you aren’t wrong about a housing shortage but that doesn’t affect the second derivative here).

VirusNewbie 5y ago

Housing increases in price because the market doesn't produce enough housing to go around. Are you claiming that housing supply shrinking during the exact time of M2 expansion is the main reason that housing appreciation skyrocketed compared to other previous years? Even if you make that claim, what's your (separate) theory with equities? As for your link, I read it, it's propaganda and not actual substance. There's no mention of how CPI is calculated with consumer substitution of mind to smooth out increased variance, on top of that this guy completely ignores weighting. No one gives a shit if suddenly tissues and tic tacs are 1/100th of their previous price when rent doubles along with health insurance.

neilwilson 5y ago
It's precisely the same 'theory' with equities. The price goes up because there is an inadequate supply of equities - hardly surprising given all the buy backs and lack of new issues. Supply and demand used to be the basis of economics. If prices go up for a thing, that encourages more of the thing to be made. So we fix it by making more stuff. That's what the market clearly wants - more houses and more investment opportunities. The trouble with monetarists who quote 'M' series as thought they were handed down from Mt Sinai is that they are obsessed with looking at the cow from the smelly end. It all becomes clear when you look at it from the smiley end.
- VirusNewbie 5y ago
  The number of shares has nothing to do with supply. Making “more shares” doesn’t increase supply. What happened with equities is that the dollar became worth less because their are more of them. This is true for everything else except for some physical commodities it is further exacerbated by some physical shortages (you aren’t wrong about a housing shortage but that doesn’t affect the second derivative here).