Thursday, March 26, 2015

There is No Inflation If You Live in a Tent: U.S. Home Prices Are Surging 13 Times Faster Than Wages

From Bloomberg:
For most people, buying a home is no cheap venture. That's especially the case when the growth in U.S. home prices is beating wage increases 13 to 1.
Wages climbed by 1.3 percent from the second quarter of 2012 to the second quarter of 2014, compared to a 17 percent increase in home prices around that time, according to a new report from RealtyTrac. The real-estate data provider used the Labor Department's weekly earnings data to measure wage growth, while home prices were derived from sales-deed data in December 2014 and compared to December 2012 on the hypothesis that a change in average wages would take at least six months to affect home prices.
Using localized earnings data, RealtyTrac also found that 76 percent of housing markets posted increases in home prices that exceeded the wage growth there during that time frame, led by the regions of Merced, California; Memphis, Tennessee; Santa Cruz, California; and Augusta, Georgia. Others include the Detroit, Houston and Miami regions. 

And here is what is going on with rents:



  1. Paul Volker: “Gold Was The Enemy”

    JBGJ attended a meeting in NY last night at which Paul Volcker spoke. The fervor with which Volcker repeatedly asserted that gold was ‘the enemy’ during his term as Federal Reserve Chairman was striking. – John Brimelow, “JB’s Gold Jottings”

    That meeting referenced was last night, March 25, 2015. Over the years Paul Volker has made it no secret that the Federal Reserve has assumed a policy in which it seeks to control the price of gold. From his memoirs, excerpted by “The Nikkei Weekly” in reference to the dollar revaluation of the dollar by the U.S. Treasury on February 12, 1973 (Volker was the Treasury’s undersecretary for international monetary affairs at the time) November 2004:

    That day the United States announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake. - source link

    Gold is the mortal of fiat currency and therefore is the mortal enemy of modern Central Bankers. Fiat currency is the mechanism by which those who are in control of the system suck wealth away from everyone else.