via @OccupyWisdom
THREAD
SEEMS LIKE THE #HOUSINGBUBBLE HIT A NERVE.
FOR THOSE THAT LACK A HISTORICAL PERSPECTIVE (@MonetaryWonk especially)
1/ CASE SHILLER 1890-2018
1890 = 100
As you can clearly see, after the end of Bretton Woods, bubbles in housing became common. Yes, we’re in one today. pic.twitter.com/fmsdET1dgz
— OW (@OccupyWisdom) August 20, 2018
2/ CASE SHILLER INDEX IN #GOLD
In terms of gold, housing is actually not highly priced. As you can see, when converted to gold, housing prices are much more stable.
Gold = sound money = stable prices pic.twitter.com/c3s9L3FaB9
— OW (@OccupyWisdom) August 20, 2018
3/ HOUSING VS #INCOME
Regardless of nominal values, for housing not to be in a bubble, it has to be affordable, otherwise the air comes out – 6x income to 11x income is not sustainable and will collapse again. pic.twitter.com/Iu2PNrfJKj
— OW (@OccupyWisdom) August 20, 2018
4/ HOUSING VS #INTERESTRATES
Falling interest rates for 38 years. Can’t fall anymore. Large deformities appear when you mess with the cost of capital.
Cheap money = high demand = less supply = bubble
Expensive money = low demand = more supply = fair value pic.twitter.com/UeaBSyx9s2
— OW (@OccupyWisdom) August 20, 2018
PEOPLE ARE CONFUSED
THE #HOUSINGBUBBLE IS OBVIOUS
Q1 1974 – 6 x income
Q4 2018 – 11 x income
WHY ARE YOU CONFUSED??? pic.twitter.com/nZpXxmhW8v
— OW (@OccupyWisdom) August 20, 2018
HOW CAN YOU IDENTITY A #HOUSINGBUBBLE ?
2000 – 5.26 x income
2018 – 10.23 x income pic.twitter.com/jMwfucLeO0
— OW (@OccupyWisdom) August 19, 2018
Bubble forever?
Brokers are betting on the Fed stopping its timid balance sheet reduction at $3.8 trillion and a flatter yield curve. pic.twitter.com/OEDPqJOvkB
— Daniel Lacalle (@dlacalle_IA) August 20, 2018