Follow-up to my previous comment: it may seem hard to believe to some, but there was a time in the recent past (late nineties) when oil, gold or the euro went down abruptly against the dollar. When measured by these yardsticks, prices of everything from toasters to tomatoes rocketed upwards. I didn’t hear anybody complaining that jeans prices tripled when measured in oil, and were therefore too expensive. Did you?
And another thing: there is current inflation, and a lot of it, outside the US. That is because many people worldwide used to keep their savings in dollars. They are the ones “being robbed”. But they can’t really blame the Fed: there is no mandate for the Fed to keep inflation low in Brazil or Kazahstan. Individuals and central banks outside the US keeping their savings in dollars did so at their own risk. They may think “fool me once, shame on you, fool me twice, shame on me”, and move away from the dollar, and that would hurt us. Fair enough. But, again, the bond market would go haywire if this happens. Interest rates would go up. That’s not good for housing prices, nominal or otherwise.
