Why the government took home prices out of its main inflation index

Post by bombcar » Fri, May 27, 2022, 4:04 PM UTC

hattmall wrote: post #74

mschuster91 wrote: post #35

Earlier quoted context omitted.

> home prices have been absolutely bonkers, with two massive bubbles (we are in one right now) Isn't the definition of a bubble that it has the capability to pop and then eventually pops? At least for urban housing, I see no way of that even being remotely possible, neither for the US nor here in Europe. Rural areas simply are too far left behind to support decent human life - no high speed Internet, no public transp…

Is this actually happening in Europe? The US is the exact opposite. It's rather trivial to improve rural areas and housing costs are outpacing urban areas at least in percentage increases. Most rural areas still have access to all the basics that urban areas provide and are only a couple hours drive from major urban centers. There's no public transport but no one cares about that in the US. Even in the largest cities…

Post by throw0101a » Fri, May 27, 2022, 4:08 PM UTC

acd wrote: post #41

I still argue for that central banks got inflation wrong. Central banks set inflation target to to percent to try and control wage inflation. But wage inflation are globalized. So I argue that central banks tried to control local wage increase on a globalized market which is impossible. Central banks cannot control price increases on global market. Also central banks did not take into account increased housing prices…

Post by nradov » Fri, May 27, 2022, 4:10 PM UTC

onlyrealcuzzo wrote: post #54

nradov wrote: post #28

Earlier quoted context omitted.

The CPI includes rent (and owner's imputed rent). No one needs to purchase real estate. That's an investment, not a living expense. Millions of people have started families in rented homes.

You don't need to purchase a home - but historically - if you did - you've been much better off financially. It's the same as saying you don't NEED to go to college. No, you don't. You don't need much of anything... But if you did go to college - whether through correlation or causation - statistically you are much better off. So if college and housing get out of reach for most people - then maybe they will be worse…

Post by vkou » Fri, May 27, 2022, 4:11 PM UTC

ClumsyPilot wrote: post #65

ta988 wrote: post #52

Earlier quoted context omitted.

To which you add, people that buy houses want to be able to sell making a large benefit. So you profit from using it (by living in it or renting it) and sell it for more than you did put into it...

Do they plan to live in a tent after they 'used' the house and sold it? Because if they plan to buy a new house to replace the one they sold, they haven't made any money. And if they want to upgrade, they lost money and the price difference will have increased. The only case where you benefit from rising hoise prices is if all of your income comes from owning property, rather than working a job - i.e. you are a major…

Post by ghaff » Fri, May 27, 2022, 4:12 PM UTC

bombcar wrote: post #182

tjr225 wrote: post #108

Earlier quoted context omitted.

Could you? I have been remote for about 4 years and I have difficulty doing my job if my internet goes out for even an hour during my working time. I also have issues doing my job if I can’t stream audio/video due to speed issues- and this happens even with a hardwired connection on occasion.

Starling reliability is usually the "it goes down for a few minutes" type of failures, vs the "it's down for the day" you get (more rarely) with wired. I'm semi-rural and I still get 2-4 times a year where my cable drops out, which I suspect is due to moisture in the lines as it seems to usually happen during spring thaws. They're bringing in fiber at some point soon.