The housing bubble is over!

[Diego Mamani]

one burger contains as much as 3-5c worth of flour (up from 1-2c in 2006!) 5c of cheese, 5c of beef, some lettuce and mustard, etc. The bulk is LABOR.

–You're considering only variable costs, my friend. There are fixed costs too: store's rent (or the opportunity cost if you own), insurance, etc. Anyways, thanks for the entertainment and going into the minutiae of burger selling. I could have said "$300 airfare" or "$0.75 pen", etc.

Average nominal incomes can't go up unless either the money supply goes up (printing) or the rate at which people trade (velocity of money) goes up. Money you're paid with has to come from somewhere. If the amount of money in the economy is constant (…)

–Aha! You assume that the money supply is constant. Now your burger example starts to make more sense. But that's an enormous IF you use. The metaphorical printing presses are working at full steam! Haven't you read the news this week? For instance, see:

http://www.csmonitor.com/2008/0313/p01s06-usec.html

 

[Diego Mamani]

If your income stays the same and there is 50% inflation over the next 3 years do you think that 500k house today is going to be more affordable in 3 yrs? I don’t think so!!!

Kev, I don’t think so either! That’s one big IF you wrote. The point I’m making is precisely that nominal incomes will start going up sooner or later. Our friend bsrsharma appears to be one of the few who got my argument.

[Diego Mamani]

If your income stays the same and there is 50% inflation over the next 3 years do you think that 500k house today is going to be more affordable in 3 yrs? I don’t think so!!!

Kev, I don’t think so either! That’s one big IF you wrote. The point I’m making is precisely that nominal incomes will start going up sooner or later. Our friend bsrsharma appears to be one of the few who got my argument.

[Diego Mamani]

If your income stays the same and there is 50% inflation over the next 3 years do you think that 500k house today is going to be more affordable in 3 yrs? I don’t think so!!!

Kev, I don’t think so either! That’s one big IF you wrote. The point I’m making is precisely that nominal incomes will start going up sooner or later. Our friend bsrsharma appears to be one of the few who got my argument.

[Diego Mamani]

If your income stays the same and there is 50% inflation over the next 3 years do you think that 500k house today is going to be more affordable in 3 yrs? I don’t think so!!!

Kev, I don’t think so either! That’s one big IF you wrote. The point I’m making is precisely that nominal incomes will start going up sooner or later. Our friend bsrsharma appears to be one of the few who got my argument.

[Diego Mamani]

If your income stays the same and there is 50% inflation over the next 3 years do you think that 500k house today is going to be more affordable in 3 yrs? I don’t think so!!!

Kev, I don’t think so either! That’s one big IF you wrote. The point I’m making is precisely that nominal incomes will start going up sooner or later. Our friend bsrsharma appears to be one of the few who got my argument.

[kewp]

I wish I had the reference, but I saw recently that the median income is actually *down* since 2000. And thats the fundamental re: housing prices.

High inflation is ultimately going to make the housing crash worse. People will be so strapped for cash due to high energy and food prices that aren’t going to be able to afford to pay a premium for housing. And believe me, folks will rent long before they go cold and hungry!

High energy costs are also going to make those McMansions out in the IE even less attractive, as the commuting and heating/cooling costs will be significantly more.

[kewp]

I wish I had the reference, but I saw recently that the median income is actually *down* since 2000. And thats the fundamental re: housing prices.

High inflation is ultimately going to make the housing crash worse. People will be so strapped for cash due to high energy and food prices that aren’t going to be able to afford to pay a premium for housing. And believe me, folks will rent long before they go cold and hungry!

High energy costs are also going to make those McMansions out in the IE even less attractive, as the commuting and heating/cooling costs will be significantly more.

[kewp]

I wish I had the reference, but I saw recently that the median income is actually *down* since 2000. And thats the fundamental re: housing prices.

High inflation is ultimately going to make the housing crash worse. People will be so strapped for cash due to high energy and food prices that aren’t going to be able to afford to pay a premium for housing. And believe me, folks will rent long before they go cold and hungry!

High energy costs are also going to make those McMansions out in the IE even less attractive, as the commuting and heating/cooling costs will be significantly more.

[kewp]

I wish I had the reference, but I saw recently that the median income is actually *down* since 2000. And thats the fundamental re: housing prices.

High inflation is ultimately going to make the housing crash worse. People will be so strapped for cash due to high energy and food prices that aren’t going to be able to afford to pay a premium for housing. And believe me, folks will rent long before they go cold and hungry!

High energy costs are also going to make those McMansions out in the IE even less attractive, as the commuting and heating/cooling costs will be significantly more.

[kewp]

I wish I had the reference, but I saw recently that the median income is actually *down* since 2000. And thats the fundamental re: housing prices.

High inflation is ultimately going to make the housing crash worse. People will be so strapped for cash due to high energy and food prices that aren’t going to be able to afford to pay a premium for housing. And believe me, folks will rent long before they go cold and hungry!

High energy costs are also going to make those McMansions out in the IE even less attractive, as the commuting and heating/cooling costs will be significantly more.

[equalizer]

bsrsharma is right when stating "One way the Fed is helping to solve our severe indebtedness is through inflation. By successively shrinking the value of US $, we actually have to pay less in real value to our Creditors, both public and private. Since most of the Debtors are American and Creditors are Foreign, this is politically very attractive. "

That’s what most level-headed economists like peter navarro are saying, even if they disagree with the policy. Peter stated in Feb 2003 that war was going to stimulate the economy and turned bullish on stocks then.

The bears will enjoy his site: http://www.peternavarro.com/dailyblog.html

[equalizer]

bsrsharma is right when stating "One way the Fed is helping to solve our severe indebtedness is through inflation. By successively shrinking the value of US $, we actually have to pay less in real value to our Creditors, both public and private. Since most of the Debtors are American and Creditors are Foreign, this is politically very attractive. "

That’s what most level-headed economists like peter navarro are saying, even if they disagree with the policy. Peter stated in Feb 2003 that war was going to stimulate the economy and turned bullish on stocks then.

The bears will enjoy his site: http://www.peternavarro.com/dailyblog.html

[equalizer]

bsrsharma is right when stating "One way the Fed is helping to solve our severe indebtedness is through inflation. By successively shrinking the value of US $, we actually have to pay less in real value to our Creditors, both public and private. Since most of the Debtors are American and Creditors are Foreign, this is politically very attractive. "

That’s what most level-headed economists like peter navarro are saying, even if they disagree with the policy. Peter stated in Feb 2003 that war was going to stimulate the economy and turned bullish on stocks then.

The bears will enjoy his site: http://www.peternavarro.com/dailyblog.html

[equalizer]

bsrsharma is right when stating "One way the Fed is helping to solve our severe indebtedness is through inflation. By successively shrinking the value of US $, we actually have to pay less in real value to our Creditors, both public and private. Since most of the Debtors are American and Creditors are Foreign, this is politically very attractive. "

That’s what most level-headed economists like peter navarro are saying, even if they disagree with the policy. Peter stated in Feb 2003 that war was going to stimulate the economy and turned bullish on stocks then.

The bears will enjoy his site: http://www.peternavarro.com/dailyblog.html

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