Shiller on housing: Using the D word

[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.

[4plexowner]

Now I’m really confused, bsharma – in your first post the Fed and govt is going to save the world with inflation but in your second post we are all going to suffer a reduced lifestyle because of inflation

could it be that Keynesian economics is a load of crap so you have to keep changing your answer?

to think that anyone can direct where printing press money gets spent is ludicrous – and to talk about good inflation and bad inflation truly shows the inanity of the Keynesian philosophy

here are two simple realities for you:

THERE IS NO SUCH THING AS A FREE LUNCH

A NATION CAN NOT PRINT ITS WAY TO ECONOMIC HEALTH AND PROSPERITY

[4plexowner]

Now I’m really confused, bsharma – in your first post the Fed and govt is going to save the world with inflation but in your second post we are all going to suffer a reduced lifestyle because of inflation

could it be that Keynesian economics is a load of crap so you have to keep changing your answer?

to think that anyone can direct where printing press money gets spent is ludicrous – and to talk about good inflation and bad inflation truly shows the inanity of the Keynesian philosophy

here are two simple realities for you:

THERE IS NO SUCH THING AS A FREE LUNCH

A NATION CAN NOT PRINT ITS WAY TO ECONOMIC HEALTH AND PROSPERITY

[4plexowner]

Now I’m really confused, bsharma – in your first post the Fed and govt is going to save the world with inflation but in your second post we are all going to suffer a reduced lifestyle because of inflation

could it be that Keynesian economics is a load of crap so you have to keep changing your answer?

to think that anyone can direct where printing press money gets spent is ludicrous – and to talk about good inflation and bad inflation truly shows the inanity of the Keynesian philosophy

here are two simple realities for you:

THERE IS NO SUCH THING AS A FREE LUNCH

A NATION CAN NOT PRINT ITS WAY TO ECONOMIC HEALTH AND PROSPERITY

[4plexowner]

Now I’m really confused, bsharma – in your first post the Fed and govt is going to save the world with inflation but in your second post we are all going to suffer a reduced lifestyle because of inflation

could it be that Keynesian economics is a load of crap so you have to keep changing your answer?

to think that anyone can direct where printing press money gets spent is ludicrous – and to talk about good inflation and bad inflation truly shows the inanity of the Keynesian philosophy

here are two simple realities for you:

THERE IS NO SUCH THING AS A FREE LUNCH

A NATION CAN NOT PRINT ITS WAY TO ECONOMIC HEALTH AND PROSPERITY

[4plexowner]

Now I’m really confused, bsharma – in your first post the Fed and govt is going to save the world with inflation but in your second post we are all going to suffer a reduced lifestyle because of inflation

could it be that Keynesian economics is a load of crap so you have to keep changing your answer?

to think that anyone can direct where printing press money gets spent is ludicrous – and to talk about good inflation and bad inflation truly shows the inanity of the Keynesian philosophy

here are two simple realities for you:

THERE IS NO SUCH THING AS A FREE LUNCH

A NATION CAN NOT PRINT ITS WAY TO ECONOMIC HEALTH AND PROSPERITY

[bsrsharma]

4Plex: I see no confusion. Fed & Govt are going to save US (mainly) and Global economic system (secondarily) with inflation. It is also true, a majority of us, particularly Americans will become poorer.

There is no contradiction; we will have to amputate legs to save life. To prevent 1930s style depression, we have to accept 1970s style inflation. I am sure everybody will agree we would rather have a replay of painful 1970s than even more painful 1930s.

[bsrsharma]

4Plex: I see no confusion. Fed & Govt are going to save US (mainly) and Global economic system (secondarily) with inflation. It is also true, a majority of us, particularly Americans will become poorer.

There is no contradiction; we will have to amputate legs to save life. To prevent 1930s style depression, we have to accept 1970s style inflation. I am sure everybody will agree we would rather have a replay of painful 1970s than even more painful 1930s.

[bsrsharma]

4Plex: I see no confusion. Fed & Govt are going to save US (mainly) and Global economic system (secondarily) with inflation. It is also true, a majority of us, particularly Americans will become poorer.

There is no contradiction; we will have to amputate legs to save life. To prevent 1930s style depression, we have to accept 1970s style inflation. I am sure everybody will agree we would rather have a replay of painful 1970s than even more painful 1930s.

[bsrsharma]

4Plex: I see no confusion. Fed & Govt are going to save US (mainly) and Global economic system (secondarily) with inflation. It is also true, a majority of us, particularly Americans will become poorer.

There is no contradiction; we will have to amputate legs to save life. To prevent 1930s style depression, we have to accept 1970s style inflation. I am sure everybody will agree we would rather have a replay of painful 1970s than even more painful 1930s.

[bsrsharma]

4Plex: I see no confusion. Fed & Govt are going to save US (mainly) and Global economic system (secondarily) with inflation. It is also true, a majority of us, particularly Americans will become poorer.

There is no contradiction; we will have to amputate legs to save life. To prevent 1930s style depression, we have to accept 1970s style inflation. I am sure everybody will agree we would rather have a replay of painful 1970s than even more painful 1930s.

[sdrealtor]

Enough with the 50% drop callers. Look at esmith’s January HPI which anecdotally makes sense with what I see along the coast regarding values.

His graph shows prices are about 70 to 80% above pre-bubble pricing in most parts of the county. A drop of 50% would put prices well below pre-bubble prices on a nominal basis. Factor in wage increases (which JWM and ex-SD do so often) of easily 20 to 30% in the nicer areas among professionals and a 25% decline from here looks like alot to expect.

Throw in lower interest rates and affordability is only about 30% above the pre-bubble prices adjusted for interest rates. Factor in the rise in wages and we are already pretty close. Sorry folks but I just dont see much more than 20% downside from here.

Sure you may get more than that in Da’ Hood but do you really want to live in Da’ Hood?

If you really want a nice home, get your ass off the computer, work harder, start a business and make more money. Dont expect life to hand it to you on a silver platter.

[sdrealtor]

Enough with the 50% drop callers. Look at esmith’s January HPI which anecdotally makes sense with what I see along the coast regarding values.

His graph shows prices are about 70 to 80% above pre-bubble pricing in most parts of the county. A drop of 50% would put prices well below pre-bubble prices on a nominal basis. Factor in wage increases (which JWM and ex-SD do so often) of easily 20 to 30% in the nicer areas among professionals and a 25% decline from here looks like alot to expect.

Throw in lower interest rates and affordability is only about 30% above the pre-bubble prices adjusted for interest rates. Factor in the rise in wages and we are already pretty close. Sorry folks but I just dont see much more than 20% downside from here.

Sure you may get more than that in Da’ Hood but do you really want to live in Da’ Hood?

If you really want a nice home, get your ass off the computer, work harder, start a business and make more money. Dont expect life to hand it to you on a silver platter.

[sdrealtor]

Enough with the 50% drop callers. Look at esmith’s January HPI which anecdotally makes sense with what I see along the coast regarding values.

His graph shows prices are about 70 to 80% above pre-bubble pricing in most parts of the county. A drop of 50% would put prices well below pre-bubble prices on a nominal basis. Factor in wage increases (which JWM and ex-SD do so often) of easily 20 to 30% in the nicer areas among professionals and a 25% decline from here looks like alot to expect.

Throw in lower interest rates and affordability is only about 30% above the pre-bubble prices adjusted for interest rates. Factor in the rise in wages and we are already pretty close. Sorry folks but I just dont see much more than 20% downside from here.

Sure you may get more than that in Da’ Hood but do you really want to live in Da’ Hood?

If you really want a nice home, get your ass off the computer, work harder, start a business and make more money. Dont expect life to hand it to you on a silver platter.

[sdrealtor]

Enough with the 50% drop callers. Look at esmith’s January HPI which anecdotally makes sense with what I see along the coast regarding values.

His graph shows prices are about 70 to 80% above pre-bubble pricing in most parts of the county. A drop of 50% would put prices well below pre-bubble prices on a nominal basis. Factor in wage increases (which JWM and ex-SD do so often) of easily 20 to 30% in the nicer areas among professionals and a 25% decline from here looks like alot to expect.

Throw in lower interest rates and affordability is only about 30% above the pre-bubble prices adjusted for interest rates. Factor in the rise in wages and we are already pretty close. Sorry folks but I just dont see much more than 20% downside from here.

Sure you may get more than that in Da’ Hood but do you really want to live in Da’ Hood?

If you really want a nice home, get your ass off the computer, work harder, start a business and make more money. Dont expect life to hand it to you on a silver platter.

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