| >Inflation has been been normal Inflation's been normal? Maybe we don't share the same reality. Let's continue with the USA, which previous commenters have be referencing. The median price of a US home has gone up 45% [1] since 2008 when The Fed started "printing money hand over fist". Did the quality of all homes suddenly go up by 45% in lockstep? I would doubt that. It could be that all people started to be more productive simultaneously, and despite an aversion to paying a premium on housing, the price increase is merely a symptom of a supply-restricted market -- and yet Median incomes (household, individual) only increased (26%[2],28%[3]). The US is experiencing at least 13% and practically 45% asset-price inflation over the period you referenced. I would hardly say that's "normal". It's the sign of a dying currency -- one that cannot maintain its long term purchasing power. [4] >Classical economics no longer correctly models reality. Economics is not physics -- it's an intangible process of action, human action. One cannot make an economic model of the utility I get from the sloth of laying in a field on a warm day, even if it means I'll be less robust against a winter storm. "Ce qu'on voit et ce qu'on ne voit pas" and TNSTAAFL still hold despite what the central planners decree. [1] https://dqydj.com/historical-home-prices/
[2] https://dqydj.com/household-income-by-year/
[3] https://dqydj.com/individual-income-by-year/ [4] Living in a home is a consumptive act: Using land, material, past labor for one's enjoyment. It is not "investing". One may try to reduce the costs of that consumption by buying the house etc. |
Actually, inflation has been very low.
> The median price of a US home has gone up 45%
The median sale price of existing homes has gone up 45%. Without knowing the profile of homes sold, it's hard to say what it means. It could just be that turnover has accelerated at the higher end of the market, or slowed at the lower end, or both (which would be consistent with basically everything I've seen about the real estate market since 2008, both in terms of direct reports and indirect influences—better lending terms but stricter qualifications to get a loan at all, for instance.)
> The US is experiencing at least 13% and practically 45% asset-price inflation over the period you referenced.
Asset-price inflation isn’t what the unqualified term inflation refers to, and aside for the fact that money supply can drive both, is otherwise driven by different forces to general inflation (both in terms of distributional and behavioral drivers.)
> I would hardly say that's "normal".
Why not? Certainly the home price measure you've chosen went up a lot less in the 12 years from the trough in 2008 that you measured from than it did in the 12 years leading up to the peak just before the downturn. Even ignoring the question of whether it's a relevant measure, by what standard is it unusually high?