Sticker shock

[Doc G]

The value of the dollar has tanked due to excessive printing of money, so while real estate values have gone up so has the prices of everything else.

Right. In personal economics we tend to think of a dollar as a "fixed" unit, and goods/services/assets as rising or falling in value relative to that unit.

But that's backwards. Real estate, metal, timber, tractors, computers, etc. have an intrinsic value -- these things aren't suddenly worth 50% more this year than they were last year. Since the Feral Gubbmint won't defend the exchange rate of assets for dollars (by flooding the economy with "free" dollars) it is that dollars are simply worth less this year. Much less.

 

[PuffyC]

No need to panic if you have patience. This is all an artificial, self-inflicted inflationary bubble that the entire world is working to fix, and they will.

We paid people to stay home, sometimes paying them more than they were getting at their job. That surplus of time and money spiked demand for goods and services but that demand isn't sustainable and in some areas we're already seeing it. The labor shortage today is just people resisting the need to go back to working for their money after having months and months off but that will pass.

We killed supply by locking down. Fortunately we now see that locking down was a huge mistake so we won't be doing it again. It's not even on the table.

Remember when you couldn't get lumber and even if you could find it the prices were sky high? They're down almost 70% in 6 months. From tractors to chips to everything in between, the same will happen but it'll be the end of 2022 before that happens.

 

[lman]

Prices won't come down to what they were in good old 2020 because wages have gone up and I don't believe wages will go back down. They can't get the toothpaste back in the tube. They're not going to go out and find the money that they distributed. They still want to put more money in distribution that will drive the value of the dollar even lower.