Shiller on housing: Using the D word

[patientrenter]

BuyerWill is exactly correct. There is no reason for a collapse in home prices to create any net increase in homelessness. If all home prices dropped by 90% tomorrow, there would be exactly the same number of houses as there are today. All that would happen is that people would pay different amounts to live in them, and maybe some people would buy more houses (investors), and others would rent more (residents-to-be without downpayments).

Patient renter in OC

[JWM in SD]

JWM in SD

“The most rational solution to our national problem now is a dose of robust and sustained inflation so that our debts, public and private, become lower in real value. This will also make our products and factors of production internationally competitive. Just ask yourself – how many of you will buy a Honda or Toyota when it costs $50K, $100K …. How many will buy a BMW or MB when it costs 100K, 200K ….”

This is so f**king stupid it is beyond on belief. How many times do I have to explain this people? Inflation is increase in money supply not prices. In order for it to make a difference, it must make its way into your wages or it will not help sustain inflated asset prices. that is why every credit bubble in history ends up in deflation because the debt grows beyond the ability to be serviced.

Get your head out of your ass Bsharma…the Fed and the Govt can’t save your SD house anymore. Deflation psychology has set in.

[JWM in SD]

JWM in SD

“The most rational solution to our national problem now is a dose of robust and sustained inflation so that our debts, public and private, become lower in real value. This will also make our products and factors of production internationally competitive. Just ask yourself – how many of you will buy a Honda or Toyota when it costs $50K, $100K …. How many will buy a BMW or MB when it costs 100K, 200K ….”

This is so f**king stupid it is beyond on belief. How many times do I have to explain this people? Inflation is increase in money supply not prices. In order for it to make a difference, it must make its way into your wages or it will not help sustain inflated asset prices. that is why every credit bubble in history ends up in deflation because the debt grows beyond the ability to be serviced.

Get your head out of your ass Bsharma…the Fed and the Govt can’t save your SD house anymore. Deflation psychology has set in.

[JWM in SD]

JWM in SD

“The most rational solution to our national problem now is a dose of robust and sustained inflation so that our debts, public and private, become lower in real value. This will also make our products and factors of production internationally competitive. Just ask yourself – how many of you will buy a Honda or Toyota when it costs $50K, $100K …. How many will buy a BMW or MB when it costs 100K, 200K ….”

This is so f**king stupid it is beyond on belief. How many times do I have to explain this people? Inflation is increase in money supply not prices. In order for it to make a difference, it must make its way into your wages or it will not help sustain inflated asset prices. that is why every credit bubble in history ends up in deflation because the debt grows beyond the ability to be serviced.

Get your head out of your ass Bsharma…the Fed and the Govt can’t save your SD house anymore. Deflation psychology has set in.

[JWM in SD]

JWM in SD

“The most rational solution to our national problem now is a dose of robust and sustained inflation so that our debts, public and private, become lower in real value. This will also make our products and factors of production internationally competitive. Just ask yourself – how many of you will buy a Honda or Toyota when it costs $50K, $100K …. How many will buy a BMW or MB when it costs 100K, 200K ….”

This is so f**king stupid it is beyond on belief. How many times do I have to explain this people? Inflation is increase in money supply not prices. In order for it to make a difference, it must make its way into your wages or it will not help sustain inflated asset prices. that is why every credit bubble in history ends up in deflation because the debt grows beyond the ability to be serviced.

Get your head out of your ass Bsharma…the Fed and the Govt can’t save your SD house anymore. Deflation psychology has set in.

[JWM in SD]

JWM in SD

“The most rational solution to our national problem now is a dose of robust and sustained inflation so that our debts, public and private, become lower in real value. This will also make our products and factors of production internationally competitive. Just ask yourself – how many of you will buy a Honda or Toyota when it costs $50K, $100K …. How many will buy a BMW or MB when it costs 100K, 200K ….”

This is so f**king stupid it is beyond on belief. How many times do I have to explain this people? Inflation is increase in money supply not prices. In order for it to make a difference, it must make its way into your wages or it will not help sustain inflated asset prices. that is why every credit bubble in history ends up in deflation because the debt grows beyond the ability to be serviced.

Get your head out of your ass Bsharma…the Fed and the Govt can’t save your SD house anymore. Deflation psychology has set in.

[4plexowner]

bsharma – I’ll agree with you that the powers that be are attempting to implement the hyper-inflation that you appear to be hoping for

if they succeed, bread will be about $12 to $15 per loaf and a gallon of milk will probably run about the same

these prices will clearly be unacceptable so the government will have to subsidize food costs for a large percentage of the population

these new food subsidy programs will require money so the govt will have to run the printing presses even faster thereby creating more inflation

this new inflation causes the real price of bread and milk to rise to $20 per loaf and gallon

it is still unacceptable for poor people to starve in the streets so the govt increases the size of the food subsidy programs

the expansion of the food subsidy program costs money so the govt runs the printing presses even faster which causes more inflation which causes the cost of bread and milk to go up which causes …..

~

it is intuitively obvious to the most casual observer that Keynesian economics is logically flawed – it is fortunate for the powers that be that most Americans choose not to use the grey matter inside their skulls

[4plexowner]

bsharma – I’ll agree with you that the powers that be are attempting to implement the hyper-inflation that you appear to be hoping for

if they succeed, bread will be about $12 to $15 per loaf and a gallon of milk will probably run about the same

these prices will clearly be unacceptable so the government will have to subsidize food costs for a large percentage of the population

these new food subsidy programs will require money so the govt will have to run the printing presses even faster thereby creating more inflation

this new inflation causes the real price of bread and milk to rise to $20 per loaf and gallon

it is still unacceptable for poor people to starve in the streets so the govt increases the size of the food subsidy programs

the expansion of the food subsidy program costs money so the govt runs the printing presses even faster which causes more inflation which causes the cost of bread and milk to go up which causes …..

~

it is intuitively obvious to the most casual observer that Keynesian economics is logically flawed – it is fortunate for the powers that be that most Americans choose not to use the grey matter inside their skulls

[4plexowner]

bsharma – I’ll agree with you that the powers that be are attempting to implement the hyper-inflation that you appear to be hoping for

if they succeed, bread will be about $12 to $15 per loaf and a gallon of milk will probably run about the same

these prices will clearly be unacceptable so the government will have to subsidize food costs for a large percentage of the population

these new food subsidy programs will require money so the govt will have to run the printing presses even faster thereby creating more inflation

this new inflation causes the real price of bread and milk to rise to $20 per loaf and gallon

it is still unacceptable for poor people to starve in the streets so the govt increases the size of the food subsidy programs

the expansion of the food subsidy program costs money so the govt runs the printing presses even faster which causes more inflation which causes the cost of bread and milk to go up which causes …..

~

it is intuitively obvious to the most casual observer that Keynesian economics is logically flawed – it is fortunate for the powers that be that most Americans choose not to use the grey matter inside their skulls

[4plexowner]

bsharma – I’ll agree with you that the powers that be are attempting to implement the hyper-inflation that you appear to be hoping for

if they succeed, bread will be about $12 to $15 per loaf and a gallon of milk will probably run about the same

these prices will clearly be unacceptable so the government will have to subsidize food costs for a large percentage of the population

these new food subsidy programs will require money so the govt will have to run the printing presses even faster thereby creating more inflation

this new inflation causes the real price of bread and milk to rise to $20 per loaf and gallon

it is still unacceptable for poor people to starve in the streets so the govt increases the size of the food subsidy programs

the expansion of the food subsidy program costs money so the govt runs the printing presses even faster which causes more inflation which causes the cost of bread and milk to go up which causes …..

~

it is intuitively obvious to the most casual observer that Keynesian economics is logically flawed – it is fortunate for the powers that be that most Americans choose not to use the grey matter inside their skulls

[4plexowner]

bsharma – I’ll agree with you that the powers that be are attempting to implement the hyper-inflation that you appear to be hoping for

if they succeed, bread will be about $12 to $15 per loaf and a gallon of milk will probably run about the same

these prices will clearly be unacceptable so the government will have to subsidize food costs for a large percentage of the population

these new food subsidy programs will require money so the govt will have to run the printing presses even faster thereby creating more inflation

this new inflation causes the real price of bread and milk to rise to $20 per loaf and gallon

it is still unacceptable for poor people to starve in the streets so the govt increases the size of the food subsidy programs

the expansion of the food subsidy program costs money so the govt runs the printing presses even faster which causes more inflation which causes the cost of bread and milk to go up which causes …..

~

it is intuitively obvious to the most casual observer that Keynesian economics is logically flawed – it is fortunate for the powers that be that most Americans choose not to use the grey matter inside their skulls

[bsrsharma]

JWM & 4Plex,

I didn’t mean Weimar Germany style hyperinflation – more like Nixon-Ford-Carter style (1973-1982) that ended in revalueing $ to a new lower value (relative to asset classes). That helped real estate recovery (and because of that, general perception of prosperity) in the 1980s.

Also, all expensive wars are eventually paid by devaluation of currency and increased inflation. Inflation is the natural involuntary universal tax.

We, as a nation, wasted a lot of wealth building unneeded homes (and waging a profitless war). We, as a nation, are going to pay the price with a lower standard of living. That is what inflation does.

Money supply vs. price is technicality. Reality is simpler – we wasted money and have to live poor.

[bsrsharma]

JWM & 4Plex,

I didn’t mean Weimar Germany style hyperinflation – more like Nixon-Ford-Carter style (1973-1982) that ended in revalueing $ to a new lower value (relative to asset classes). That helped real estate recovery (and because of that, general perception of prosperity) in the 1980s.

Also, all expensive wars are eventually paid by devaluation of currency and increased inflation. Inflation is the natural involuntary universal tax.

We, as a nation, wasted a lot of wealth building unneeded homes (and waging a profitless war). We, as a nation, are going to pay the price with a lower standard of living. That is what inflation does.

Money supply vs. price is technicality. Reality is simpler – we wasted money and have to live poor.

[bsrsharma]

JWM & 4Plex,

I didn’t mean Weimar Germany style hyperinflation – more like Nixon-Ford-Carter style (1973-1982) that ended in revalueing $ to a new lower value (relative to asset classes). That helped real estate recovery (and because of that, general perception of prosperity) in the 1980s.

Also, all expensive wars are eventually paid by devaluation of currency and increased inflation. Inflation is the natural involuntary universal tax.

We, as a nation, wasted a lot of wealth building unneeded homes (and waging a profitless war). We, as a nation, are going to pay the price with a lower standard of living. That is what inflation does.

Money supply vs. price is technicality. Reality is simpler – we wasted money and have to live poor.

[bsrsharma]

JWM & 4Plex,

I didn’t mean Weimar Germany style hyperinflation – more like Nixon-Ford-Carter style (1973-1982) that ended in revalueing $ to a new lower value (relative to asset classes). That helped real estate recovery (and because of that, general perception of prosperity) in the 1980s.

Also, all expensive wars are eventually paid by devaluation of currency and increased inflation. Inflation is the natural involuntary universal tax.

We, as a nation, wasted a lot of wealth building unneeded homes (and waging a profitless war). We, as a nation, are going to pay the price with a lower standard of living. That is what inflation does.

Money supply vs. price is technicality. Reality is simpler – we wasted money and have to live poor.

[Author]

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