Anyway I think You also have to throw in the Gov’s (local and Fed) interest in paying (or monetizing) it’s debt into the equation.
You got CalPers already behind and getting further while demanding Pay me first and expect 7% or better returns from it’s investments. FED not doing much better job.
think there will be keen interest in getting wage inflation higher somehow(My two cents).
This should be interesting.
I don’t see how you can get too much higher mortgage rates without wage inflation and keep the all the balls in the air.[/quote]
The government could certainly monetize it’s debt but that just means purchasing power gets destroyed. It’s certainly possible for congress to print up money and give it to everybody in the untied states and get Weimer hyper inflation. Of course does a retiree really care that he’s getting his $70K per year government pension if gas costs $20/gallon and a minimum wage worker makes more than him. Maybe that’s easier in a legal sense but it doesn’t change the fact that you just screwed the pension holder. Honestly what’s the difference between telling him you going to get 20% less money or we’re going to reduce your purchasing power by 20%. The result is the same in that he’s getting less goods and services.
I suppose that scenario is better for those that made bets on house prices and other asset prices going up but the years of labor it takes to buy the house will likely go down.