This real estate bubble won't pop

Look at all the discretionary spending out there that can still be sucked into rent though: restaurants, clothing, movies, all food other than rice and beans, etc.

Yes of course it's easy to call this hyperbolic, worst case scenario fear mongering, but then look at a long term chart for Canadian housing prices, and also the political response to it: essentially nothing, other than a bit of standard political rhetoric during the last election, which will be ignored just as Trudeau's electoral reform promises were ignored, and no one will get too excited because everyone seems to have subconsciously accepted that politics is essentially pure theatre - about the only thing most people seem to care much about now is not electing Nazis.

It's easy (and fun!) for people to dismiss this blogger's concerns, but I think his numbers are fairly workable, and he's not even taking into account the possibility that rent starts to suck in the entire economy. Of course, this is "impossible"...except, maybe it actually isn't.

As for myself, I think the situation is even worse than he says. His proposed solution seems to be various political policy reforms, which is the proper traditional approach. But my intuition tells me that this cannot work, even though my logical mind disagrees. I have this feeling that there are various sorts of emergent phenomena now in play, forces that we cannot detect, and maybe couldn't even understand if we could detect them. And you know what they say about things that can't be detected: they do not exist, as logic and critical thinking (the new and improved versions) tell us, of course.

For starters, I don't think a party could even get elected on a platform of reform. And even if they did, I don't think they would be able to reform anything. I think we have lost control not only of the (financial, political, etc) system, but also of our minds. It seems like we are all riding along on this massive, complex machine, that nobody designed, nobody knows how to operate, and maybe most importantly: no one seems to realize that they do not know how to operate it, or even that we are riding on it in the first place.

So far, printing money whenever we get ourselves into a pinch has always saved our asses, but at some point I think we're going to try this option and it won't work, and that is when the chickens will come home to roost, the sins of the fathers will be visited upon the sons, etc etc etc.

Obviously, this is wild, illogical speculation, and parts of it are "surely" wrong. But that doesn't mean it is incorrect in the aggregate. Complex systems are complex, emergence is a genuine phenomenon, things have been getting weirder and weirder for quite some time now, and the mood of the public in general and toward each other is "not great". I think we have all the makings needed for a debacle of historic proportions, including the necessary mindset.

This author needs relax and take a breath. Even if he’s right that financialization is displacing some would-be homeowners, he’s ignoring all the second order effects and reactions that would counteract this trend long before we reached a state where there are 99% renters. The middle class having an acceptable quality of life is the only thing keeping society stable, and the masses would be guillotining the plutocrats long before we reach that point. If people seem politically disengaged today it’s because by-and-large Americans are doing alright, something I think would absolutely change if you had middle class working adults losing their homes due to property taxes growing much faster than incomes.

He cites growing property tax bills as the reason even current homeowners are not safe from this trend. If this really became a problem, you would just see an acceleration in Prop 13 style laws protecting incumbent homeowners. But also, many cities recalculate the tax rate each year based on their budget needs. If home prices all doubled in a short period of time, I’d expect the effective tax rate to fall since the city’s revenue needs grow at a slower pace.

Leftists like the author seem to start from the premise that somebody making money is always a bad thing and build their entire housing ideology around that belief. Profit motive is a great thing if it incentivizes the creation of needed housing. Profit motive is great when it motivates landlords to buy and fix run-down properties, raising the overall quality of housing in that community. Building and maintaining housing stock is work that entails risk and that deserves compensation. Without these financial incentives, the whole system breaks down. For a glimpse at the alternative, just look at what happened with housing in the Soviet Union: huge blocks of dingy 300-500 sq ft units with nicer units reserved only for the beneficiaries of political corruption, a system of housing I doubt any of us here would wish to adopt ourselves. But, hey, at least no greedy landlords got paid.

One may want a high interest rate while you hold the property but you want low/declining interest rate as you approach sale

Given he has

> If you’d like to win a book and $100 in free cryptocurrency, head over to jaredabrock.substack.com

plastered right at the top, I would say, yes, he has heard of Bitcoin.

Well my specific belief is that housing won’t keep up with inflation rather than fall significantly in absolute terms. Not sure how I short that belief.