As we discuss about how housing becomes a luxury in an economy thats diving into luxuries, I keep seeing everyone frame the problem as "renting vs buying". But for me, all I see is luxury rentals and the real comparison should be having your own housing vs living with family like they do in other countries that have great inequality. In practice thats what I see: more people living with parents/in-laws after marriage, living "in the basement" after college, etc. So why are we still comparing rent cost to mortgages, according to the Cantillon effect hasnt that become redundant?

Hi all - a bit off topic and curious on folks experiences out there. I've been thinking about single family home prices where the prices are strong and steadily increasing, mainly coastal cities. I've done a bit of number crunching, but really focused on looking around at the economy around me recently and talking to folks. I saw that some areas have markets that have generally gone from ~$250k in 2010, to ~$450k in 2019 to ~$800k for a typical B-Class single family home. I've had lots of conversations with people in all groups around major metro areas: young and living at home, younger millennial and stuck renting, elder millennial/young Xer home owner, boomers retiring in place et al. and one major takeaway I had was how many home owners are trapped in their homes, like Hotel California (you can check in any time you like, but you can never leave). Lots of these homeowners had steady income and bought these homes sometime between 2005-2019 and "couldn't afford their home now". I think these high price areas have a lot of people with mortgages that are significantly below current 1BDR rents in their area so they cannot leave. So it is not just the interest rate but they might not qualify for more debt if their salaries didn't rise as fast, or if they took on more debt like auto loans, credit card debt, wedding debt, etc. It seems to me the rents rose so fast and so high that it's frozen a whole generation into whatever living situation they had at the time, and I've been noticing the Cantillion observation that people do not work beyond their necessities. So they keep their day job because it pays the bills they have, and those people are getting frozen out, which in turn leads to a crash in sales. If that's the takeaway then do falling rates even matter if the potential sellers have nowhere else to go? Wont the prices be driven by the shrinking supply, and those prices rising raises rent demand, which raises rents? And if the problem is people frozen in their homes with lots of equity and growing 401ks, would mass job losses even bring the prices down or would those people continue to be frozen?

Gold and Silver prices have soared in the last 12 months. The US has huge swaths of land that could potentially be Gold producing. My question is: Does Gold production work like Lumber in that rising prices cause new mills (mines in this case) to open? If so, wouldnt that lead to the US being a Gold Producing nation and adding to its quantity of new money faster than the rest of the Western world as their share of the worlds money quantity (and their production) shrinks? My other question was on the role of stablecoins that are almost entirely in US dollars at the moment. Let's say you run a business in a small country with its own currency like the Venezuelan Bolivar. Presuming you have good internet access, does the existence of stables apply Gresham's law to the local currencies? In my mind I was postulating whether USD stables act as competition for weaker, more volatile currencies (deposited in more corrupt and unstable banking systems) and actually create a lot more USD demand as the number of circulating currencies around the world shrink over the next few decades. I very much see stables as a means to export dollars without having foreign production imported, and that makes for an interesting future.

@Simon Caron - your emphasis on manufacturing coming in and out of the state from Cantillon's Essay has been spot on in my opinion. I think in here there is 1 piece that Cantillon could not have foreseen: robotics in manufacturing. With incentives like 100% depreciation in the first year and other tax credits, I think it's very likely we see more capital and manufacturing come back to the US. But here's the catch: modern factories need almost no human labor at all. So what happens then? The capital owners are the ones who produce. The after effect: as the producers, the capital owners receive all the savings and new money that comes into the state, and the State receives its share through taxation. Who gets cut out of the picture? The average working American trying to earn on labor instead of capital. I think we're staring down the barrel of the State and Capital Owners hoarding the savings. The Capital Owners then redeploy their savings and compound their wealth (and continue to receive the new money) and the State expands its programs with its share of the new money. Before you know it, the middle class is now melted into the lower classes as dependent on government programs (i.e. falling into poverty). Your livestreams have really helped move some gears in my head, so I wanted to give back. I have a couple of more ideas that I will share here as well. Agree? Disagree? What are others thoughts here?

This article from the IMF is pretty interesting how expectations are used by the central bank. I thought this quote was pretty telling. “When examining the effect inflation expectations might have on households’ homeownership decisions, it has been found that people with high-inflation experiences subsequently have higher inflation expectations, and that this increases their preference for buying versus renting a house”