All Forum Posts by: J. Mitchell Bernier

Quote from @J. Mitchell Bernier:

@James Hamling

I agree that there will be a push for "affordability measures" by our govt. Whether it be in longer term mortgages or more voucher programs. 

However; you said that "It's a basic 101 principle of economics that for ever $1.00 of increased cost of goods (ie wages) the cost of product must increase $1.07. Thanks to various factors like taxation etc., but this is and has been an established fact for pretty much forever. So, trying to "level" things with increases is, very literally, a never ending increase, and unattainable. In crease begets increase." and that doesn't show in the data.

Below is a chart from the Atlanta Fed showing wage increases and the CPI for each year from 1998 till now. Sometimes that happens but sometimes it doesn't, look at 2012-2020 and 1998-2007. So raising wages faster than the inflation rate will not cause a tailspin. 

Whether we like it or not, we need a "culling of the herd" a "scheduled burn"  of the economy including housing, that can was kicked down the road for far too long and now we have to pay the piper. 

 That data source is not going to work. 

In the Obama era, they changed the the formula for how things get calculated. Not the only administration where such changes were implemented, this was just the most controversial changes to it and where it really went off the rails and became junk data. 

It's a simple fact the disparity gap is at epic levels, and it has grown at such for some time. Go look up un-cooked numbers from independent data sources. Especially those who take into account "shadow inflation". Which is a factor where, let's say a bag of chips cost $1.00 for 10oz of chips. And then that bag is changed to be 7.5oz, at $1.00 per bag. The price per bag has remained the same but it's not the same, it has incurred a 25% inflation via the reduction in packaging. 

Your saying a "burn" of the economy and housing pricing that was "kicked down the road for far too long", what are you referencing, the last 10 years, 50 years, or 125 years? Because fact is housing has a rather steady appreciation over decades of your choice. Are you saying housing should be at 1974 levels? What decade was there supposed to be a deflation? What makes you an authority on what housing "should" be priced at? 

A house costs 1 of 2 things. Either what the inputs to create that housing are, or what a person is willing to sell it for. That's it. There is no other dictate of what a home should cost, unless we are going full communist. 

On raising wages, your completely missing what I was putting down. If you pay a worker $1.oo more to make a burger, that burger will NOT sell for $1.00 more. It will sell for $1.07 more. Now translate that across all the everything's in life. So as wages go up, cost of items disproportionately go up in relation, thus making a person poorer, just at biggers numbers. 

Your chart, conveniently left out other pertinent years I see. How about pulling up not wage growth, but actual wages vs cost of living, let's look at those 2 simple ones in relationship. And not to mention, your data is flawed, it's got about half of living expenses removed, so if a person doesn't eat, yeah there a-ok. 

 We are at such a massive net shortage of skilled workers that we need to intake in the millions of skilled workers just to get to stability of current pricing. Are you aware that more then 30% of the skilled work-force is now working BEYOND standard retirement age for such work? This is why the impact is being felt in the historical norm industries post-trades or things such as trade instructors, or compliance positions. 

Also, it is called SKILLED trades for a reason, it takes a number of YEARS for a person to come up to proficiency. This gap can not be infilled in 1yr, even if sheer volume of bodies is thrown at it there is then the years of training to bring them up to full utilization. It is coined "the lost decade" in reference to this, as in 10 years of lost recruitment and training. We are talking millions of persons short. It can get infilled, but not quickly. 

As for adjusted price inflation vs wage incline, are you kidding me?! So you expect that in housing prices and completely ignore it's not present ANYWHERE, in any industry?! Let me make this simple; NOT-GONNA-HAPPEN. It's called the disparity gap. 

Yes, oil and lumber prices have come down.... from their highs. Guess what it is today, MORE then pre-covid. 

Look, your whole premise is to argue prices are somehow going to magically come back to what they were a few years ago. Please, tell me when that ever happened. EVER. HVAC supply prices are still continuing up, concrete is now in shortage and guess what those prices are doing. Gypsum is still well higher then 3 yrs ago and guess what, it's NOT ever going to be that price again EVER!

Look, everyone, please just spend 30 seconds and look up inflation. Everything WILL-COST-MORE, that's inflation, that's what it does. So arguing there is inflation, and that prices will come down, is nutz, it's just disconnected lunacy. 

The only way your getting prices back down to yester-year is called deflation. Guess what the Fed says on deflation; that it's the only thing worse then inflation. Notice the Fed say "correction" and not deflation, not crash, not collapse, "correction" and getting inflation reigned in. Notice they say ACCEPTABLE level of inflation. ACCEPTABLE, as-in there happy with inflation, it's great, just at lower levels then this. 

Maybe the Fed needs to come out with statements in Crayola or a sing-along version to help make things understood to all, IDK, but they are NOT gunning for deflation, just stabilized inflation. Lower levels of inflation. Not 20% fall back in anything. 

AND on oil, let's see how oil price works out when were not pumping from strategic reserves, the prices reflect the artificial lowering, FYI. 

You go tell me how many electricians, carpenters, masons etc. are happy to sign on to "easily" take 20% less, let me know how well that works out for ya. 

 This is a great example here of a pre-determined conclusion and just, sticking to it, no matter the data, just keep sticking to it over n over...... 

Look, I did say "and the resulting inflation from such...." because reality is it's not gonna be tax payers paying for Student Loan forgiveness, it's not, because that would require a balanced fed. budget which we are just a few trillion away from. So it's going to be added inflation, more $$$$ "shazamed" into existence. Again. 

Your argument, Lol, you point out I said " many accounts will now be at $0" and go on to say 8 million accounts will be brought to $0. As to argue it's "only" 8 million? Last i checked, 8 million firmly qualifies as "a lot".  Or 17% of all Student Loans, which again, I'd call that a lot, wouldn't you?

I am not arguing pro-S.L. forgiveness, not arguing pro or con really. Your argument was Student Loan forgiveness was some data-point proof of trouble in housing price, I simply point out that one item, it actually does the opposite. 

In the grand scheme of things, Student Loan forgiveness seems to me as the best, smartest entitlement program in contrast with all the others. It's at least rewarding those who have at some level at least attempted to do something, right? I mean, vs another handout for, IDK, free cell phones, or how about free internet for all, it's the smartest dumb thing done. 

If this whole thing get's you all ruffled you should go on and actually read through the annual budget at things like how much $ is being spent to study the migration patterns of Canadian Geese, lol. And yeah, wish that was a joke, it's not. And there is a mountain of similar moronic spending. 

As for wages, what the heck are you talking about? Where do you invent this nonsense that wages have been DROPPING since covid?! That's just patently NOT TRUE. Most the nation, MOST industries, MOST employers have been struggling to hire people including pressing $/bribes up and up and up.    maybe in whatever Inuit village of the arctic where your at, but for majority of populated North America it's a totally different story. 

Your wage statement is an oxymoron, feel free to make that the word of the day, OXYMORON. A good example: "....since inflation is raging, wages are lower......", Oxymoron. 

 Think about this Carlos. 

They say raising rates, tanking the overall economy will "fix" supply issues. That makes 0 sense, because there saying they need to slow the economy, and supply issues. Doesn't supply issues slow the economy?????? You can't buy, what you can't buy, right. 

It's an oxymoron what Fed is saying on that line. If such a supply issue where people can't buy things, how is there over-heated action from too much commerce (ie buying). Lol, it makes 0 sense, it cancels itself. 

It simply highlights the fact they don't know what's going on or what to do and simply following the playbook vs creating a play. 

Free market solves supply chain issues, it does, if left alone. When an item is in demand and supply is constrained, others emerge to fulfill that gap, yes? They know this, they did it with fuel! When prices went nuts, they released from strategic reserve, so why are they not doing similar on all else? Get the SBA the ability to empower more startups in that sector, and like magic, more supply comes into existence. 

And the Fed did say this week a problem is people have too much liquidity, THAT I believe is the real focus. 

This is just the next chapter in the war on the middle class. The surf class/ poverty class is in large part unaffected, there existence is subsidized right, none of the 87k auditors is looking at them, no. 

You can't issue trillions into existence without inflation, it's so basic, but they said no it won't do any, then oh it's "transient" lol, apparently just passing through, now a crisis. Once enough people are smashed down, watch, they will offer the cure, and it will be via loans of some kind, i guarantee it. 40/50yr mortgage is coming, no doubt.