I was reminded of two old Wall Street Journal op-eds that provide a concise collection of elements of the conventional view of 21st century housing markets.
I love that line: "....the presumption...is that the bottom of the market is the normal price." Which implies that unless there's a fire sale then consumers are getting shafted by greedy businesses who are conspiring to keep prices elevated through nefarious means. If this were true then Utopia could be achieved by a deflationary economy where all prices for all goods and services eventually reached zero. Maybe we will achieve that paradise someday, but for now we have to tolerate a nominal monetary system where prices can, and should, fluctuate.
Speaking of prices, PCE continues a downward trajectory. Powell has hinted at future rate hikes but with these trends the Governors should probably do nothing for a few more months. The next few years could resemble the 1990's--which I don't think would be a bad thing for the economy. The worst thing that happened during that decade was the invention of the Internet--curse you Al Gore!
I love that line: "....the presumption...is that the bottom of the market is the normal price." Which implies that unless there's a fire sale then consumers are getting shafted by greedy businesses who are conspiring to keep prices elevated through nefarious means. If this were true then Utopia could be achieved by a deflationary economy where all prices for all goods and services eventually reached zero. Maybe we will achieve that paradise someday, but for now we have to tolerate a nominal monetary system where prices can, and should, fluctuate.
Speaking of prices, PCE continues a downward trajectory. Powell has hinted at future rate hikes but with these trends the Governors should probably do nothing for a few more months. The next few years could resemble the 1990's--which I don't think would be a bad thing for the economy. The worst thing that happened during that decade was the invention of the Internet--curse you Al Gore!