money value between 2002 and 2008

[bob007]

good point

i do not have data on rents for the particular area

[Anonymous]

This also has to take into account whether you trust the government’s CPI as a valid measure of purchasing power. You might find using data from http://www.shadowstats.com/ to be a bit more interesting. Of course, that also means that in nominal terms, housing will fall less. In real terms though, the fall would be the same.

[Anonymous]

This also has to take into account whether you trust the government’s CPI as a valid measure of purchasing power. You might find using data from http://www.shadowstats.com/ to be a bit more interesting. Of course, that also means that in nominal terms, housing will fall less. In real terms though, the fall would be the same.

[Anonymous]

This also has to take into account whether you trust the government’s CPI as a valid measure of purchasing power. You might find using data from http://www.shadowstats.com/ to be a bit more interesting. Of course, that also means that in nominal terms, housing will fall less. In real terms though, the fall would be the same.

[Anonymous]

This also has to take into account whether you trust the government’s CPI as a valid measure of purchasing power. You might find using data from http://www.shadowstats.com/ to be a bit more interesting. Of course, that also means that in nominal terms, housing will fall less. In real terms though, the fall would be the same.

[Anonymous]

This also has to take into account whether you trust the government’s CPI as a valid measure of purchasing power. You might find using data from http://www.shadowstats.com/ to be a bit more interesting. Of course, that also means that in nominal terms, housing will fall less. In real terms though, the fall would be the same.

[kev374]

Your assumption is flawed because home prices don’t track core or headline inflation but rather income inflation and incomes have declined 4% in the last 5 years, probably a big part due to Global Wage arbitrage. Headline inflation actually depresses home prices.

This makes sense, for instance say inflation is at 15% a year but your income is increasing at 2% a year. Now the price of goods is skyrocketing..groceries, oil, transporation, insurance etc. In this scenario your net affordability each year for housing is decreasing because more of your budget is being eaten up by the rising costs of goods and services.

So you can’t calculate prices of homes based on inflation. It’s income growth that is KEY. In the 90s income growth would have been approximately equal to inflation or slightly more but in the last 5-7 yrs income growth has lagged inflation. The difference has been picked up by credit spending but that is no more so we’re in for some interesting times ahead.

To give you an example, in my line of work, which is IT consulting, they are paying the same hourly rates they were paying in 2000. In some cases rates have gone down due to the huge influx of cheap H1B labor and especially L1 labor which bypasses the caps and are paid peanuts.

[kev374]

Your assumption is flawed because home prices don’t track core or headline inflation but rather income inflation and incomes have declined 4% in the last 5 years, probably a big part due to Global Wage arbitrage. Headline inflation actually depresses home prices.

This makes sense, for instance say inflation is at 15% a year but your income is increasing at 2% a year. Now the price of goods is skyrocketing..groceries, oil, transporation, insurance etc. In this scenario your net affordability each year for housing is decreasing because more of your budget is being eaten up by the rising costs of goods and services.

So you can’t calculate prices of homes based on inflation. It’s income growth that is KEY. In the 90s income growth would have been approximately equal to inflation or slightly more but in the last 5-7 yrs income growth has lagged inflation. The difference has been picked up by credit spending but that is no more so we’re in for some interesting times ahead.

To give you an example, in my line of work, which is IT consulting, they are paying the same hourly rates they were paying in 2000. In some cases rates have gone down due to the huge influx of cheap H1B labor and especially L1 labor which bypasses the caps and are paid peanuts.

[kev374]

Your assumption is flawed because home prices don’t track core or headline inflation but rather income inflation and incomes have declined 4% in the last 5 years, probably a big part due to Global Wage arbitrage. Headline inflation actually depresses home prices.

This makes sense, for instance say inflation is at 15% a year but your income is increasing at 2% a year. Now the price of goods is skyrocketing..groceries, oil, transporation, insurance etc. In this scenario your net affordability each year for housing is decreasing because more of your budget is being eaten up by the rising costs of goods and services.

So you can’t calculate prices of homes based on inflation. It’s income growth that is KEY. In the 90s income growth would have been approximately equal to inflation or slightly more but in the last 5-7 yrs income growth has lagged inflation. The difference has been picked up by credit spending but that is no more so we’re in for some interesting times ahead.

To give you an example, in my line of work, which is IT consulting, they are paying the same hourly rates they were paying in 2000. In some cases rates have gone down due to the huge influx of cheap H1B labor and especially L1 labor which bypasses the caps and are paid peanuts.

[kev374]

Your assumption is flawed because home prices don’t track core or headline inflation but rather income inflation and incomes have declined 4% in the last 5 years, probably a big part due to Global Wage arbitrage. Headline inflation actually depresses home prices.

This makes sense, for instance say inflation is at 15% a year but your income is increasing at 2% a year. Now the price of goods is skyrocketing..groceries, oil, transporation, insurance etc. In this scenario your net affordability each year for housing is decreasing because more of your budget is being eaten up by the rising costs of goods and services.

So you can’t calculate prices of homes based on inflation. It’s income growth that is KEY. In the 90s income growth would have been approximately equal to inflation or slightly more but in the last 5-7 yrs income growth has lagged inflation. The difference has been picked up by credit spending but that is no more so we’re in for some interesting times ahead.

To give you an example, in my line of work, which is IT consulting, they are paying the same hourly rates they were paying in 2000. In some cases rates have gone down due to the huge influx of cheap H1B labor and especially L1 labor which bypasses the caps and are paid peanuts.

[kev374]

Your assumption is flawed because home prices don’t track core or headline inflation but rather income inflation and incomes have declined 4% in the last 5 years, probably a big part due to Global Wage arbitrage. Headline inflation actually depresses home prices.

This makes sense, for instance say inflation is at 15% a year but your income is increasing at 2% a year. Now the price of goods is skyrocketing..groceries, oil, transporation, insurance etc. In this scenario your net affordability each year for housing is decreasing because more of your budget is being eaten up by the rising costs of goods and services.

So you can’t calculate prices of homes based on inflation. It’s income growth that is KEY. In the 90s income growth would have been approximately equal to inflation or slightly more but in the last 5-7 yrs income growth has lagged inflation. The difference has been picked up by credit spending but that is no more so we’re in for some interesting times ahead.

To give you an example, in my line of work, which is IT consulting, they are paying the same hourly rates they were paying in 2000. In some cases rates have gone down due to the huge influx of cheap H1B labor and especially L1 labor which bypasses the caps and are paid peanuts.

[DWCAP]

Ok, so I have a question. I thought I would try to understand this change in the way we calculate headline inflation. I understand that it was changed in the 90’s and has consistantly reported a lower level of inflation than the older model did. My question is why. Not conspiricy theory or “cause the gov is trying to inflate its way outa the debt”. They had to have better, more financially sound reasons than that, or no one would still be buying securities. So my question is what are these reasons for change? Is this a better gage of real inflation, more timely, less prone to wide swings…….? I understand core inflation, I understand wage inflation. I dont need definitions or anything like that. I took Econ 101. What I am wondering is more of the WHY.

[DWCAP]

Ok, so I have a question. I thought I would try to understand this change in the way we calculate headline inflation. I understand that it was changed in the 90’s and has consistantly reported a lower level of inflation than the older model did. My question is why. Not conspiricy theory or “cause the gov is trying to inflate its way outa the debt”. They had to have better, more financially sound reasons than that, or no one would still be buying securities. So my question is what are these reasons for change? Is this a better gage of real inflation, more timely, less prone to wide swings…….? I understand core inflation, I understand wage inflation. I dont need definitions or anything like that. I took Econ 101. What I am wondering is more of the WHY.

[DWCAP]

Ok, so I have a question. I thought I would try to understand this change in the way we calculate headline inflation. I understand that it was changed in the 90’s and has consistantly reported a lower level of inflation than the older model did. My question is why. Not conspiricy theory or “cause the gov is trying to inflate its way outa the debt”. They had to have better, more financially sound reasons than that, or no one would still be buying securities. So my question is what are these reasons for change? Is this a better gage of real inflation, more timely, less prone to wide swings…….? I understand core inflation, I understand wage inflation. I dont need definitions or anything like that. I took Econ 101. What I am wondering is more of the WHY.

[DWCAP]

Ok, so I have a question. I thought I would try to understand this change in the way we calculate headline inflation. I understand that it was changed in the 90’s and has consistantly reported a lower level of inflation than the older model did. My question is why. Not conspiricy theory or “cause the gov is trying to inflate its way outa the debt”. They had to have better, more financially sound reasons than that, or no one would still be buying securities. So my question is what are these reasons for change? Is this a better gage of real inflation, more timely, less prone to wide swings…….? I understand core inflation, I understand wage inflation. I dont need definitions or anything like that. I took Econ 101. What I am wondering is more of the WHY.

[Author]

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