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66 sats \ 1 reply \ @krispy_donkey 7h \ parent \ on: Are real estate prices getting insane, basically everywhere? econ
Definitely seems to be the case in NZ, and I am not sure about the US and can imagine it very much depends on the specific local market, however as a whole in Australia we are off the races, again, at least for the next few months.
I have a conspiracy theory that after the US Govt bailed out the banks in the GFC, the resultant increase to the US money supply meant other country’s currencies were suddenly very competitive with the dollar, possibly explaining the exchange rates at the time. This would’ve been painful for American importers, I can only imagine how expensive NZ lamb must have gotten for instance. Anyway at this point the US would have asked their closest allies and trading partners if they could also kindly send expand their money supplies too, in order to get exchange rates back to their historical norms. For allies such as NZ and Australia, the only feasible way of doing this was to lend, lend, lend, in doing so creating money/debt and increasing their total money supplies.
I may be completely wrong but comparing the USD/AUD chart with the mean Australian house price between 2010-2020 is interesting.
Yes NZ and other tributaries to the US military and monetary hegemony definitely follow the lead of the Fed.
It began really pumping early 2000s with Bush2s war on Iraq and massive loosening of housing lending discipline- pumping the middle classes wealth perception.
It has gone right back to 1990 since interest rates declined globally from 20%+ until Covid when they reached zero or even below zero.
The constant easing of monetary discipline combined with cheaper and cheaper mortgage finance inflated house prices- but from here on the price of fiat debt cannot go much lower and incomes are constrained- the rentseeking fiat debt slavery bankers/military industrial combine its extracting maximum tribute but the whole shebang is unravelling.
Thats my hapennyworth view on it.
You can only financialise, rentseek and debt farm up to a point and then it stops.
We are at that point or close to it.
We need to actually return at some point to producing things that other people want/need to buy to earn an honest crust- but the west has mostly forgotten that and needs a wake up call.
NZ grass fed lamb beef and dairy are the best value BTW- not that I'm biased ;)
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