Are The Fed And Biden’s Vax Policies Creating A New Mortgage Tilt Effect? (Inflation-induced Unaffordability Problem)

Sharing is Caring!

by confoundedinterest17

The Federal Reserve is helping to create inflation, particularly since their unorthodox surge in money supply around the Covid outbreak in early 2020. Home prices as of the latest Case-Shiller report are rising at nearly 20% year-over-year.

To add to the problem of The Fed’s overzealous money printing we have The Biden Administration (and puppy-torturer/killer Anthony Fauci) issuing Covid vaccine edicts that are wreaking havoc in labor markets further clogging the economic pipelines.

Between The Fed ZIRP policies and Biden/Fauci’s vax mandates, we are starting to see the rise (again) of the infamous MORTGAGE TILT EFFECT!

See also  Rising inflation, booming economy and no sign of rate hikes. Someone is lying...

The Tilt Effect comes about as expected inflation gets priced into mortgage rates, the mortgage payment rises as the mortgage rate rises (of course), but the higher mortgage payment occurs with EXPECTED inflation in the future.

But not quite yet. Despite CPI inflation growing at 5.4% YoY, Freddie Mac’s 30-year mortgage survey rate is only 3.01% … for now.

As inflation continues to rise (thanks to ongoing Fed ZIRP policies and governments mandating Covid vaccine in order to keep your job, we should eventually see mortgage rates rise … leading to a return of THE TILT EFFECT. Which in turns make housing even MORE unaffordable.

See also  Biden Debuts New Strategy to Avoid Taking Questions from Reporters

We have tried numerous mortgage contracts in the past (mostly to offset Carter-era inflation) such as the PLAM (price-level adjusted mortgage) and the GPM (graduated payment mortgage). Now we have the PLUM (price level unadjusted mortgage) which is subject to the TILT EFFECT.

 

 

657 views

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.