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3% construction loans would majorly undermine the Fed's effort to fight inflation

by the88doctor 3y ago

soperj 3y ago
How? It's not 3% for everyone, it's 3% for specific projects for low income housing.
- Empact 3y ago
  The boom gets started with an expansion of credit. The fed sets rates low, are you starting to get it? That new money is confused for real loanable funds, but it’s just inflation that’s driving the ones who invest in new projects, like housing construction. The boom plants the seeds for its future destruction. The savings aren’t real, consumption’s up too! And the grasping for resources reveals there’s too few. https://youtu.be/d0nERTFo-Sk?si=mcHcwlGi-TPaf5q- https://youtu.be/d0nERTFo-Sk?si=mcHcwlGi-TPaf5q- The claim being that to back a loan with new “printed” money is necessarily inflationary. Loans backed with saved/invested funds are non-inflationary, because the saver gives up their ability to consume with those funds, in proportion with the consumption the borrower takes on.
RC_ITR 3y ago
Excluding shelter, inflation is already bellow 2%. Not building enough housing is majorly undermining the Fed's effort to fight inflation.
- the88doctor 3y ago
  Not sure what data you're looking at, but that's completely off. Trailing 12 month food inflation is over 4%. Transportation inflation is over 10%. Services excluding energy are up 5.9%.
  - RC_ITR 3y ago
    Sure those are other numbers, but the number I’m looking at is inflation ex-shelter for the most recent month? [0]. To be clear, housing is categorized as a service and transportation inflation is 1.6% [1] Not sure why you think I’m completely off but I would be curious to see links. [0]https://fred.stlouisfed.org/graph/?g=18UVC https://fred.stlouisfed.org/graph/?g=18UVC [1] https://fred.stlouisfed.org/graph/?g=18UVL https://fred.stlouisfed.org/graph/?g=18UVL
phmqk76 3y ago
Nope. It would be a massive pressure-relief valve on inflation, so much of which is in housing expenses, not just post-COVID, but for decades.

3% construction loans would majorly undermine the Fed's effort to fight inflation

soperj 3y ago

How? It's not 3% for everyone, it's 3% for specific projects for low income housing.

Empact 3y ago
The boom gets started with an expansion of credit. The fed sets rates low, are you starting to get it? That new money is confused for real loanable funds, but it’s just inflation that’s driving the ones who invest in new projects, like housing construction. The boom plants the seeds for its future destruction. The savings aren’t real, consumption’s up too! And the grasping for resources reveals there’s too few. https://youtu.be/d0nERTFo-Sk?si=mcHcwlGi-TPaf5q- https://youtu.be/d0nERTFo-Sk?si=mcHcwlGi-TPaf5q- The claim being that to back a loan with new “printed” money is necessarily inflationary. Loans backed with saved/invested funds are non-inflationary, because the saver gives up their ability to consume with those funds, in proportion with the consumption the borrower takes on.

RC_ITR 3y ago

Excluding shelter, inflation is already bellow 2%. Not building enough housing is majorly undermining the Fed's effort to fight inflation.

the88doctor 3y ago
Not sure what data you're looking at, but that's completely off. Trailing 12 month food inflation is over 4%. Transportation inflation is over 10%. Services excluding energy are up 5.9%.
- RC_ITR 3y ago
  Sure those are other numbers, but the number I’m looking at is inflation ex-shelter for the most recent month? [0]. To be clear, housing is categorized as a service and transportation inflation is 1.6% [1] Not sure why you think I’m completely off but I would be curious to see links. [0]https://fred.stlouisfed.org/graph/?g=18UVC https://fred.stlouisfed.org/graph/?g=18UVC [1] https://fred.stlouisfed.org/graph/?g=18UVL https://fred.stlouisfed.org/graph/?g=18UVL

phmqk76 3y ago

Nope. It would be a massive pressure-relief valve on inflation, so much of which is in housing expenses, not just post-COVID, but for decades.