RE: Baby BOOMERS..!! Is the World on the Verge of Global HYPERINFLATION..??
What we are witnessing and has worsened since the mid 1980's is the detach from wages to house prices and house prices to daily essentials. Since 2008 house prices have soared purely based on debt availability but wages have not kept pace, nor has the cost of basic essentials. If you look at the cost of the pure labour content to build a house compared to the cost of the house when built you will see the problem. There are huge distortions across the whole market and these have been exaggerated by the use use of Derivatives. Take Silver alone over the last 100 years. On average the average house price could be bought for 500 ounces of silver and in the early 1900's a daily wage was 1 ounce of silver. Extract this to todays silver price of $17oz that would leave an average house $8,500 and a daily wage of $17..!! There lies the problem. Thanks for the comment. Stephen
Yes this is true. People truly misunderstand how the housing market is overpriced due to cheap debt.
I need to buy a house soon and I am worried, but then not having the asset of a house is also a great risk in this money tray system.
You are right. House prices are way over-valued purely because of cheap credit. Could you imagine if interest rates were 7, 8, 9 % +++..!! As a rule of thumb a first time buyer should be looking at buying a house at approx x3 salary. That is $50k salary, house price $150k. Anymore and the odds are against you. Thanks for the comment. Stephen