Posted On: Friday - May 21st 2021 9:47AM MST
In Topics:   Global Financial Stupidity  Preppers and Prepping  Economics  Inflation
(This image may not be the best, as it suggests people bailing out. It's all I got right now.)
I wasn't sure for a while it was just our local area or State that was experiencing rising housing and land prices all over. I met a real estate agent while traveling and she informed me that people were making offers above and beyond asking prices on exurban houses along with undeveloped land.
From reading a bit, I see that it's more widespread. There is the huge inflation that we have seen in building materials, whether temporary due to supply shortages* or a permanent increase. That would encourage people to buy existing houses, of course, and bring their values up some. This Fortune magazine article attributes the reason for inflation of suburban and rural property to the Kung Fu PanicFest's causing permanent changes to work habits. That people will work from home more, and they want more space, is the gist of it, though they speculate on other reasons.
We at Peak Stupidity can speculate too. As related to the PanicFest, along with last years BLM/antifa mayhem, many of are realizing something the preppers could have told us long ago. The first then they will tell you is that cities are not the places to be when the SHTF - Shit Hits The Fan. (If you're gonna be any kind of prepper, you start off learning the terminology, and SHTF is number 1.) The ctrl-left in the blue States, or really, blue areas more than States, of the country are doing this bugging out, as I've seen in my area. Yes, they are the cause of the problems back in their old country, but that doesn't stop them from getting the hell out.
Secondly, this PanicFest has been just another excuse, and a BIG ONE, for the US Feral Gov't to create trillions of more US dollars in a short time. You just can't keep doing stuff like that and expect the buck to buy the same stuff it did last year. Oh, the BLS can get creative with their baskets of goods**, and come up with those 1-2% APR numbers, though they had to admit to an April 4.2% yoy CPI rise, as per Ron Paul's Big Government and Big Inflation. (Just double it, and you'll get closer to the truth.)
As much as most American wouldn't know the Federal Reserve from the Federalist Papers, people's general observations and instincts often help them do the right thing. "Shit's going up. That's all." That's the answer from about anyone I ask the question "hey, why is it higher now?" to, whether the insurance agent***, a guy at the hardware store, the waiter, and then the tax assessor. OK, the latter has an easy answer too: Real Estate is going up, duh.
So, everything is going up, causing everything else to go up. That's the story that they are sticking to. It's the same as the wage/price spiral business they'd tell you in the late 1970s, except wages are at a lower relative level and not rising as much. This whole inflation thing is 1970s redux. I know people like the retro stuff, like POS blenders that look like the old well-built Osterizers or retro Camaros, Mustangs and Chargers, but inflation too? Really?
Housing and land are real. The US dollar is a piece of green paper**** or bits on a computer somewhere. Even people who don't read Peak Stupidity, Zerohedge, or Ron Paul columns can still wise up.
PS: We have discussed Housing Bubble 2.0 on the West Coast especially on this site (see here, here, here, and here.) Was that all garbage, seeing as no bust is forthcoming? I don't know. It's hard to separate inflation from real increase in value.
* It's not like we are running out of forest in this country. It might be more about whose money is more worth taking for the lumber (aka, China's).
** We've got lots of discussion of hedonics, substitution, and other fun stuff in posts with the Inflation topic key.
*** Regarding my house insurance, at least he did have a good answer: Replacement cost is going up due to the big rise in building materials.
**** I did get 2 Sacajawea coins out of a vending machine recently, though.