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by shkkmo
2816 days ago
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> And if we're speaking about monetary inflation,well, where did all the money come from in the first place to make housing so expensive? Yes I know, when one house sells in a neighborhood or city everything is revalued, but when you've been at it for 10++ years and have had significant turnover of the entire inventory, this excuse begins to run thin after a while. If GDP growth is more or less flat, and there isn't negative growth in other areas like consumer spending, where is all the money coming from to execute the transactions? I've struggled with a similar question. Where does the money come from? The US GDP has increased ~500x (unadjusted for inflation) in the last 100 years, this means each dollar has to be transacted 500x more frequently on average than it did 100 years ago (assuming a fixed supply). How does this work? |
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I don't completely understand it either though, say you cut one blade of my grass and I pay you $20, then I cut one blade of your grass and you pay me $20, rinse repeat and you get massive GDP, but no increase in wealth. Now do something similar with housing, except this time print a whole bunch of money and pour it all into housing (including construction), and compare that to a country that instead invests into education and building manufacturing plants - who is going to be wealthier?
I think this is all far more complicated than governments let on, or maybe they actually don't even understand it all, from what I can tell a large number of economists don't, so perhaps it's no surprise we're in the situations we are.