Bitcoin comes for housing crisis

The housing price-shop is something else. Chip Case, a Wellesley professor, started the things in the 1980s because he saw Massachusetts’ housing prices zoom like never before. In 1980, Massachusetts put a permanent hard ceiling on local property taxes. He said they could increase by 2.5 % per year. Inflation in 1980 was 14 %. Hard luck, local government, you lose. The money was poured into real estate like never before. Hmmmmm. Taxes at a low level are monitoring the asset.

The complete index-shiller returning to 1890-no 1980, 1890-reports a story. Home prices were generally flat, in fact a little reduced (check the modernization of this index on page 23 here), for three -quarters of the century until the late 1960s. Then, housing prices rose by more than 50 % in the 1970s. All this is in real terms, adapted to inflation. In the 1980s they sank, recovered a little in the 1990s, and then fueled as never before in the new millennium.

Wait, housing prices generally measured for seventy -five years from 1890 to 1965? You read it correctly. For most of American history, such as our best elements, the trend for housing prices was down. These things about housing prices are exclusively a story basically in 1970 to date.

To paraphrase the famous X flow, what happened to the devil in 1971? Then we got out of the gold standard. Here is the origin of the housing crisis.

The transition from gold caused a massive coins disorder and caused interest in coins. This new state of things has failed and disappeared, generally waxed, for fifty a few years now. Any asset or useful product limited to supply from geology-las (the base of housing), gold, oil, you call it-has attractive hedge hedging features in a non-gold standard environment. These compensation features were not obvious, not about the late 1960s, when it became clear that the Master Masters were going to make the Kaputt gold standard. Low price casing for age before, Big Time Housing Bubbles afterwards.

But you say, there are dirt shops (hi, Detroit, Toledo, that housing prices were probably immersed in the last 1980s and early 1990s, and there was a housing bust after 2008 for the sake of Pete. Well, there is a great deal of hair removal. A fakey monetary system – money – makes people reluctantly relax for things, especially housing, who would prefer to provide a mediocre part of their resources.

The difficulty today is that the Portfolio of Economic/Assets of the Normal Face has an oversized share of the housing (or fails because it is too expensive) because the premium continues to be linked to the compensation of the Fiat Monetary System. Who is talking to go back to gold today? Nobody? Then refer to the housing explosion.

Let’s be up and talking about solutions. Here comes one, a truck. Bitcoin, as we discuss in our new book Free Money: Bitcoin and American Monetary DeliveryIt is a barbaric yawp, Whitman’s constant phrase, by the American people or the global electorate to use a term Jude Wanniski, saying if you are not going to return to classic money, we will force you. And me, it works. Look at the price and capitalization of the market.

It is strange, it is not based on anything, because one would keep these things – we’re talking about … Fiat money, right! That’s why there’s bitcoin. As Bretton Woods Research recently put it on a report About how “bitcoin marks a market uprising”: “its rise is not about fundamental elements or even monetary architecture. Bitcoin is for a wide rejection of what the Fiat system has become.”

Here is the future of housing prices. As Bitcoin either forces the world back to classic money or approaching the classic money themselves, sending Fiat to historical ash, the demand for compensation against the entire monetary system will be reduced. Housing is one of the first examples of these fence. The living rooms will come back to regular pricing, the housing will fall as a share of portfolios, everyone will be comfortable as an error in an excellent place and we will be away for better uses of time and energy and resources.

We will leave for another day the non -suspension epic of hangers in the housing explosion, collectors and beneficiaries of real estate taxes. A observation is in order at this point. This is that where housing has done bad even in this expected offset offsetting environment, ownership taxes were ridiculous. In other words, you can’t really find an exception anywhere. Where housing is allowed to operate as a compensation against the monetary system, it certainly has.

We have to take lessons since the ERA residence after 1971 has been mitigated. We have to see in the 1980s more than 2008. In the 1980s, it seemed like we had the opportunity to return to the golden model. The tax grades had been a long time and the world of real investment was so high, the value of the businesses reached up, and the gold sank with vertical and remained low. People are distributed by housing to enter the fantastic moments. We had returned to gold then, which would be a piece of cake, the old trend of 1890-1965 would have been reassessed for the entire duration. Missed the opportunity.