The biggest problem I see with inflation used in alot of posts is the index to monitary inflation. What needs to be used, but is a lot harder to measure and work with is WAGE inflation. That was the whole problem of Stagflation, inflation was eating up any real gains in peoples ability to buy. If inflation is going up by 5% in 2008 (just a # I made up), but wages go up only 3%, people are falling behind. To suppose that they can then buy more house because inflation is up 5% is just wrong. With $100 oil, and food going up like mad, inflation hurts.
What I really like about this site and rich’s insights is that it relates real estate to wages and the overall economy in a way that I cant do. If the average person isnt getting ahead, then real estate as a whole isnt going to keep going up for long. I may be wrong, but I dont think real people are getting ahead right now. Sure the people in the 200000+ are good, they are always good, but service jobs just dont pay as well.
