Sunday, June 15, 2014

"We're Seeing a Surprising Amount of Inflation,"

Accelerating price inflation is coming, brace yourself.

Via the Houston Chronicle:
Houston-based Hines has projects going globally, including a tower in its hometown and one in China. The company has 34 other buildings under construction or in the planning stages.

"We have more development underway than I've seen in my career," vice chairman and chief investment officer Hastings "Hasty" Johnson said Friday during a keynote address to a group of real-estate journalists gathered in Houston this week.

At the same time, Johnson told the National Association of Real Estate Editors, building and labor costs are rising by 3 to 6 per- cent annually.

"We're seeing a surprising amount of inflation," Johnson said.

In the multifamily sector, he said, costs are going up even faster, from 6 to 12 percent.


  1. Looks like “Hasty” Johnson might be a little hasty with all the projects going on. When the artificial boom turns South, those projects in retrospect....might look a little “hasty”.

  2. Havenstein and the Fed

    The British Embassy in Berlin had its own approach, saying that the number of marks per pound, equal to 1 in 1913, became in 1923 equal to the number of yards to the Sun. Dr Hjalmar Schacht, who succeeded Havenstein as Reichsbank president in 1923, said the price of one egg that year would have bought 500 billion eggs in 1913.

    Dr Frank Graham (1930) reported that nominal mortgages were one-sixth of Germany's wealth in 1913; they were less than one US cent in 1923, meaning that one US cent in 1923 was more than enough to pay off all 1913 nominal mortgages.

    Countless sad stories abounded. A man went to the bakery with a wheelbarrow full of marks; he went inside the bakery to check how far the price of bread increased; a thief dumped the piles of money on the ground and stole the wheelbarrow. A teacher saved for 30 years; his savings could not buy a tramway ticket; he committed suicide. Municipal workers cleaned streets littered with tons of dumped marks; people burned marks in their fireplaces; teachers and workers were paid twice a day; shops remained closed or they closed as quickly as they opened. All financial calculations, accounting, and contracts became impossible.

    Millions of Germans suffered food shortage and starvation; middle class people had their savings wiped out and became beggars on the streets; many people committed suicide.

    Nevertheless, a class of profiteers were strong supporters of inflation; these were businessmen, speculators, and borrowers. They enjoyed abundant free wealth and indulged in the most sumptuous consumption and accumulation of jewelry. Academics were strong supporters of the hyperinflation as an easy way to prosperity and full-employment. Practically, borrowers inherited free wealth such as houses, farms, buildings and machinery.

    Havenstein was described as the mad banker whose only object was to swamp Germany with banknotes. The Weimar Republic showed that a corrupt government, supported by academics and profiteers of inflation, would never stop the hyperinflation. In the event, hyperinflation ended on its own; the mark died exactly like a patient who loses a battle with cancer. No farmer and no shop would accept marks anymore.