400 000 Dollars (USD) and Dr Housing Bubble
400 000 dollars (U.S. funds). That was the average price increase in commercial home real estate somewhere (Pasadena) in California from 2000 to 2007. California, the land of make-believe… and where the Governator was just a few years ago yelling “Don’t Be Economic Girly-Men!!” but is now presiding over a dysfunctional electoral system, consecutive multi-billion budget shortfalls, and a treasury which has to resort to I.O.U.s from time to time. Dr. Housing Bubble? He (it), was a blog that I started reading well over two (or even three) years ago, I guess. It quickly became my regular reading, especially a year or so ago.
At any rate, it offers a very interesting perspective on the housing market in the middle of la la land, which means: the heart of the housing-bubble/mortgage-fraud system that began to overtake the U.S. and the rest of the world’s investors as well.
Anyway… the thing that struck me when I first saw this headline, is that somehow that number (400,000) seemed to really sum up the recent past for me. It seems like a dream, these last ten years have seen the explosion of the spectacular and the bizarre, wonderous heights and utter hopelessness. All summed up by the explosion in real asset prices and the greed, opportunity, and expectations that moved along with it. This illusion is roughly measured (as if any measure can estimate this) by the figure of $400,000 USD.
$400,000… in U.S. dollars… the world’s reserve, and declining, currency. But it does not matter since most currencies/debt are intertwined these days. In the span of seven crazy years, the cost of a house went up 400,000. That is the abstract measure of ‘the market’ or the collective mind or whatever. And while prices have fallen in the U.S. and elesewhere (and even other ‘safe’ countries like Canada are looking like they are not immune), there is still a lot of that increase which lingers, especially since prices for many goods and services have also increased. So, 400,000… that is a big number when talking about a price increase.
Most economists and politicians talk as if inflation might be something to worry about in the future. But I think it is already here.