1. moving somewhere super rural
2. selling my business
3. sell my soul to Google or Facebook etc for 5-10 yrs
The situation is dire for me and basically hopeless for everyone else.
Put a huge tax on vacancies and cap the number of residential properties a business is allowed to purchase in a year.
EDIT: Apologies for the confusion everyone. I meant top 1% for my age bracket. Nowhere near rich old folk making 500k
Probably more like top 10% overall, thanks @geebee
While I'm not opposed at all to these policies, they won't do anything to help you. Vacant homes are less than 10% of existing homes, we need far more than that to solve the problem.
The only thing, literally the only thing that will help you, is more homes.
I'm not sure why people are so resistant to this idea. We have been under building for decades in the places where people want to live, the places that are economically productive.
There's a lot of ways to get there, and though changing zoning to allow density and ban sprawl is necessary, it won't solve the problem alone.
We should also do things like slap a huge tax on the value of land to force people to stop hoarding their land, and use that tax money to fund a government builder that will act counter cyclically to current market cycles. The huge business cycle for the building trades means that it's an unstable job and it makes it hard to have a solid workforce. Having more steady building will allow for lifetime careers, for more experience to be gained, and hopefully for productivity increases.
As it is now, there's not even enough productive capacity in places like California to build the amount of housing that's needed. We need to attack the problem from many angles simultaneously.
To be clear, that number of vacant homes isn't even a problem. You need a certain number of vacant homes for liquidity.
There is a lot of marketing that was driven at Americans to think that a detached single family home is the only way to live, and it's going to be hard to undo.
Hadn’t seen anything like in NY or LA, etc.
I agree there are other ways to do it, I double agree it’s going to be hard if not impossible.
Look at how strong NIMBY is in SF with people who consider themselves to be bleeding heart ultra progressives. Everyone clams up when it effects them, but, build somewhere else? “Oh we definitely need to do that!”.
As an Indian. This culture caught on some time here in Bangalore early 2000s. But most people, even those living in large apartments, eventually prefer living in individual detached homes over time. Simple reason: Privacy. There are also a whole lot of other things. Space to dry clothes, walking space. Disturbance from from people staying the floor above. Unhygienic neighbours. etc etc.
The plus point is it comes inside a gated community. It's Brazil like inequality contrast here in Bangalore these days. Rich IT/software MNC working families live behind these bespoke apartment gated communities. Which is often contained within a larger slum.
The detached home/row houses gated communities are fairly expensive and in terms of US dollars are anywhere between $500K to $1 million. Most people buying these are people who won the higher salary software job lottery.
People like me who have always been there in Bangalore stay in the inner parts of the city which are not this cool and jazzy. Most homes are old, crumbling and roads are full of potholes. It's mixed population and the areas aren't all that much gentrified. So not many posh software people like to stay here.
Eventually you just pay extra for living among people of your income class.
I say supposedly, because instead of an upscale living experience, here's what they got:
1. the door to the parking garage is some fancy automated thing with sensors on the headlights. It doesn't work, so they have to keep backing up and re-approaching the door several times before it opens. Other residents have had the same problem.
2. Pets are allowed but are supposed to be leashed. People let their pets run around all the time not on a leash
3. There is a park across the street for people and dogs. People don't pick up their dogs' poop like they're supposed to.
4. People have dogs that bark in the apartment for hours on end. They've left notes on the door (ignored), called management ("We'll take care of it" but they don't), and ended up confronting the person directly. The dog owner acted like she didn't know anything about it.
5. Yesterday my nephew said they arrested a guy who was harassing people at the pool and people sitting on their balconies. He was also threatening the apt staff, so police arrested him.
This apt complex (according to my nephew) has a goal of filling up the building and then selling it, so they have all kinds of rent incentives and allow guarantors for people who don't really have $1900/mo for rent.
Who wants to put up with this kind of shit? This is only a 3-story apt building. I can't even imagine the kinds of problems in a 30-story apt building.
They're moving into a detached single-family house after their first-year lease is up.
This isn't purely marketing. A lot of it is lived experience. Americans are generally just straight up terrible neighbors, and neither building owners nor police care. Many of us have learned that a 40 foot setback works way better than a poorly-sound-insulated 2x4 wall.
Because homeowners want the value of their homes to appreciate.
The end beneficiary in an economy, the place where money stops is a private property owner. Every economic activity no matter what that is, just acts a long chain in which the eventual beneficiary is a property owner.
That's just how it is, there's really nothing that can be done about this.
How does that benefit you?
We are constantly told that we should become as dense Manhattan so we…can become as affordable as Manhattan?
The big cities where people want to live are already dense, they could be denser but the limitations are infrastructure related (transit, road capacity, schools, water, etc…). It might make more sense to expand where people find desirable to live rather than focus how to cram more people into the Bay Area and LA area.
This was originally a solution to help deal with rent-seeking on privatized agricultural land, when some land was more productive than others. The more productive land results in excess, unearned profit for landowners (not the workers). Farmers are very different from farm workers. Farmers have millions in assets, and though they talk big game about being poor, they have immense wealth. They extract it from the farm workers' labor on their land.
This effect is even larger in cities, where access to the city is required for access to those wages. The landowners who hoard land most effectively take most of profits, and analyses of our growing inequality (Piketty and Ronglie) show that the source of our growing inequality is a larger and larger share of wealth getting transferred to housing and land.
If we have high taxation on land value, the most expensive land in cities will be used more effectively, no longer can landlords take more than their fair share of our labor, because all that land will be used more effectively. Which also means more land is available for farming.
In short, most of our problems are caused by allowing people to rent-seek on the one thing that we can never really expand significantly: land
At some point we'll run out of land to concrete over.
And before that point we'll experience more problems due to water runoff from the land we are concreting over.
Which, is the only way to add homes in the economically productive centers where housing prices are going through the roof.
I mentioned in my comment that we should ban sprawl, and I mean it. We instead ban multifamily buildings nearly everywhere, or use code to legislate them out of being feasible. This is what must change.
Instead, it's really easy to pave over farmland in the middle of nowhere, forcing people to hop on to freeway and drive for hours to get to jobs, because it's the only thing that's legal to build. Which is happening just outside the Bay Area, for Bat Area workers: large single family development far away from where the purchasers will work.
Humans have a right to housing. Saying "no more housing" but not thinking through the rest of the consequences, because you are personally reliably housed, is not a solution that a society should consider even momentarily.
Refusing to house people today because at some unspecified point after we have many many more people, is not even remotely logical, ethical, or a solution to any problem.
At some point we'll destroy the planet and then nobody will be housed.
If your "solution" is to stop building housing, you have absolutely no solution, you just want to make people suffer.
The real solution is already happening: give women control over their bodies, economic control over their own futures, give women education and ensure that women have political power in society. That along with industrialization is how to stop population growth in its tracks.
Additionally, different types of housing have vastly different environmental impacts. Detached housing with yards is environmentally disastrous, particularly when in the woods, for people that take part in normal society. Multiunit housing takes far less materials, water, heating/cooling, and as importantly it allows loving with less transportation requirements, greatly enhancing quality of life while using less energy.
I think I've spelled out my solution to this fairy well. If yours is anything other than "make people homeless" i would love to hear it, or if you have any defense of your non-solution to ever increasing population, I'd love to hear it.
Look up induced demand.
People think our roads are too crowded, so they build even more roads. Then the roads are more clear, so people drive more. So the roads get more crowded and we build more roads...
I'm only having one child, partly because of the cost. If we burn down more of the planet to make it cheaper to have a second child, people will do that. Then people will complain it's too expensive so we need to burn down more of the planet to make it cheaper again. Then people will have three children because it's cheap...
Burn, burn, burn.
Did you mean top 10%? Now you're down to about $150k. I do think a two income household at that level can manage it, but it's surprisingly difficult and maybe not worth it when you have kids and both parents have demanding jobs.
I hope that's not a nitpick. I agree with your list and what you've said, I just think that the top 1% isn't the threshold.
Americans especially have a very skewed expectation when it comes to housing. Many people here are like "I have an upper middle class professional income, my family should have no problem affording a 3-4 bedroom single family house on a quarter acre lot with a big backyard for our dogs to run around in right in the middle of one of the most desirable metropolitan areas on the planet! Oh btw the free public schools should be excellent too!".
Saying something like that would make you sound insane in pretty much all developed countries. U.S. is a big exception due to historical reasons, but people really need to adjust their expectations going forward.
I have neighbors who bought their $3m homes when they weren't even $800k (adjusted for inflation). And since salaries + stocks have grown much faster than their property tax burden (basically frozen) - they're all retiring early.
People have expectations based on what they grew up with or what their parents grew up with or what they saw people achieving as they grew up. Can't blame them when they get out into the market and finally start saving that they're gonna be 10 years behind for the rest of their life...
And 150 years ago you can probably buy a few acres of land in SF Bay Area for less than the inflation-adjusted price of a townhouse in Mountain View these days.
Real estate is one thing that does not scale infinitely. Population grow, things change.
>can't blame them when they get out into the market and finally start saving that they're 10 gonna be 10 years behind for the rest of their life...
That's the thing about Americans. The speed of change in this country has finally increased after decades, especially when comparing to many fast developing countries. A lot of people just don't know how to adjust for that.
There are a ton of people who are interested in living in densely populated big cities but the issue is that there isn't enough high rises or tall residential buildings to offset the demand.
There's definitely policy that could be done but it'd destroy the existing value for homeowners and landlords. That's why it doesn't get passed - obviously.
3x national median income would actually mean something if real estate costs the same nationally, but obviously it doesn't. Many areas in the country costs far more than 3x in terms of real estate prices.
If you make the 3x the median income of the area you live in, then it would be a stronger argument.
Every time I propose this people think I’m on another planet but the lifestyle is really great tbh.
Probably the easiest way to find out before buying is to just stand in the lobby and ask the next person who walks past what they think.
My in-laws lived in a mid-height (4 floors) concrete-and-brick building that went up under Salazar. An equivalent building in the US would be built in wood and sheetrock pretty much everywhere. Even 5000 square foot doctors' palaces that go for half a million dollars are stick-and-cardboard. Solid construction you'd only find in highrises in urban centers, and even then it's not guaranteed that the walls aren't made out of cardboard.
You see these sprawling neighbourhoods of SFH's with 1.50 m separation between buildings and very much the whole lot paved over. Everywhere else there would be mid-rise multifamily buildings, but the American insists on an SFH, because soundproofing.
To find out what the quality of a building is you are best off just asking people who live there what they think. Apparently you can also request that strata give you information like owner complaints which may bring up noise disputes.
But what's the appeal of a high-rise? It requires too much space around it, it's not made for the human scale.
When they aren’t considering the rest of their finances or what they would do if our of a job for multiple months, etc. Not unrelated, the number of first time home buyers that buy a new car within 3 years is like 75%.
We do a really really bad job at teaching finance in schools.
Can't or will not buy a home here in SF. If I wanted to stretch - I could afford a $1.6-2m home but it'd be unpleasant. Depending on the neighborhood - that's just a starter home. I'm not even talking like a nice starter home either. My neighbors just bought the house nextdoor for $2m and spent a year renovating/fixing. Would they have bought this place if they knew all the issues? Probably not but couldn't do anything about it since you have to buy without inspection. Even when you buy at these crazy prices: Usually still requires a few hundred K in cash to renovate to put up to modern standards. We're talking all the electrical, plumbing, insulation, roof, some structural issues that went unaddressed, kitchen and bath updates, etc. Add on that you can't even live in the damn thing while that's happening. People underestimate how much places here cost and how much work they take.
Only way you're getting a nice modern turnkey house in a decent neighborhood is if you go $3m+. And unfortunately that's still wildly out of reach for many of us at the threshold of 1% individual incomes. (~$350-450k - depending on the study)
First, you can absolutely afford a $2m home, let’s not pretend otherwise.
Second, I bought at 31, and 10 years later I pay far less for my mortgage than it would cost to rent a similar place AND my hone went up in value despite buying at the peak of the last bubble!
Here’s the advice I’d give, but if you want to live in your are for the next 15 years or more. If you don’t want to be there for the long run then it’s more complicated.
EDIT: I'm assuming that's an option. Does the Bay Area have condos or is that one of the dumb zoning things y'all got going on?
And for the cost - you really don’t get much for your dollar.
But sure - keep moving the goal posts in your mind.
I lived in poor rural communities for the first 18 years of my life. I've paid my dues to my poor working class roots and I'm more than glad to say goodbye forever. And you can tell me, "But Omaha isn't that bad!" but I'm not buying it. I know people in the midwest and there's a reason so many want to leave. Only reason they stay is because they can't afford somewhere else - not because they like it.
I'm not sure what sort of mass exodus you're talking about either. The midwest city I live in is among the top 10 fastest growing cities in the US.
If selling your soul to FAANG in exchange for a lousy appartment is your recipe for happiness then I guess have fun with that.
Your options are not Bay Area or Omaha.
People act like these jobs and high earnings just follow you wherever you move - they don't.
What level of income are you considering here, and what house price do you feel is approachable with that income level?
A lot of people don't want to live in the suburbs, or in a "2nd tier"/up and coming city, but they are still very affordable, especially for someone in the top 1% of incomes.
It's a bit odd to describe it as "dire". You earn more than 99% of Americans, and people who earn less are still buying a ton of houses. You could probably rent for the rest of your life and still have a higher NW than 90% of Americans.
If you do really want a house you'll probably need to make some concessions on your demands, but tons of people do that anyway, and they are buying a house and they probably are not making 1% level income.
I don't think you're necessarily just limited to rural locations, but this does depend on what you require in a house.
If you're willing to buy a 1000 square foot apartment/condo, those can be had for ~$300K in some nice neighborhoods here in Chicago, with full access to the city's amenities.
If you're willing to live in the Chicago burbs (I personally am not), that same money will buy you a larger house with a yard. Still not close to rural, but definitely brings the problems that come with suburbia.
I have a huge penthouse condo with 25ft ceilings and wraparound 12ft windows. >3000sqft. It's in a historic building with lots of charm that has been featured in several movies. I'm also in a hip area of the city with skyline views and extremely walkable neighborhoods (on the Beltline).
My mortgage is < $2000/mo. I make >$500k a year.
I know my neighbors by name. Lots of them are in local bands and play in the courtyard. The food is awesome, and we're surrounded by art. I can do everything I want on foot.
Maybe you're in an overpriced city or a city without capacity for residents. There are lots of alternatives. With remote work, there's little reason not to explore your options.
In my experience, an income of $X lets you get a mortgage for a house worth ~$6X. Where do you live where $3m+ won't get you a house?
1) you need a place to live no matter what
2) historically the real estate market does well over long time horizons
3) if you make $540k and your mortgage is $200k/year, you'll still have like $100k-$150k in spending money after taxes.
4) housing values are a good hedge against inflation
5) IMHO inflation is going to be bad over the next few years, which means your fixed mortgage payments will shrink rapidly in an inflation-adjusted sense.
Nonetheless, I agree there are some compelling arguments that, practically all homes will be driven to prices which are only sustainable by institutions and therefore there will be little American home ownership by citizens.
I have been really banking on this one.
Don't get me wrong, housing prices are still nuts here compared to where they were a few short years ago - even in actual "super rural" parts of the state thanks to materials and labor shortages. The whole 1% having to live somewhere "super rural" thing just threw me for a loop.
Before the market really caught fire in late 2020, you could've gone in under asking in this area + gotten that sweet sub-3% interest rate.
That said, I like living in the suburbs and own a (decade-old+) car.
Also, you are not likely to do much better than that at Facebook/Google unless you are in the top 1% there as well (i.e. above Staff Software Engineer).
My guess is that either the definition of "super rural" being used here is overly broad (like for example anywhere outside of new york city ... ) or they're living in some ultra high cost of living area.
It's also another way of wealth, many people assume having high revenue via salary/compensation is a good sign of wealth, but it's not.
Makes you a better consumer, e.g. you're priced out of buying a house, so you rent.
What makes you think that's an effective intervention? What do you think the vacancy rate is, and how much % of housing is being bought by businesses?
Why is this such a deal-killer for so many people?
That's literally where most of the land is. And a good chunk of it has decent internet, even if you have to mount a 5 GHz airMAX dish on your house.
I would add forbidding foreign people and companies from owning real estate in any given country.
And exponential tax on second, third and more houses to remove hoarding, air BnB issues, and reduce flipping incentives.
Why do you think you have to move somewhere super rural? I'm in the suburbs of a major city and decent sized 3 bedroom houses start at ~$200k.
EDIT - OP edited their post to say "1% within age group, more like 10% overall". That's still likely a $100k+ annual income. I'd suggest buying a house is still possible on that income, just perhaps not across the street from Apple or Amazon offices.
Probably not where you live, though.
You also left out commuting from Tracy.
I bought my first house in Garland TX for $119,000 in 2003. 3 beds, 2.5 baths, a 'not bad' neighborhood. My wife was a teacher and we could afford it just on her income.
Looked up that house recently and it was for sale, now at $250,000 18 years later. Someone had updated it with typical flipper grade stuff, but ok it's double what it was even 5-10 years ago.
So then I go do the math on monthly payments for it. The interest rate back in 2003 was like 7-8%, and now we're down to 3%. Turns out the monthly payments I made 18 years ago and today are about the same.
We bought our second house in 2007, and similarly the price it fetches now is much higher, but the payments would be similar.
If you look at housing affordability like rent affordability; that is, what monthly payment can you afford, it seems like house prices are increasing to match interest rates decreasing. That house in Garland TX, inflation adjusted, is now MORE affordable than it was 18 years ago, even though it's purchase price has doubled.
EDIT to add - I now live in the Bay Area and this pattern doesn't hold up here. But most nation-wide patterns don't really hold up here. The house we bought in Oakland in 2016 has doubled, but we were already at like 4.25% back then, so the lower interest rate doesn't offset the whole increase.
It’s great news for incumbent owners and at the end of the day that’s a majority of voters almost everywhere.
starters are not able to afford a home, and instead have to rent from either a corporation which has the means the own property, or for a landlord who does the same.
It will cause a lot of issues with wealth disparity, especially for young people in the future.
The crashes of 1987, 2000, and 2008 all had very clear causes. I wonder what is going to be the cause of the next crash. Or maybe I suffer from 20/20 hindsight.
EDIT #1 : If housing prices crater, I'm buying another one because history shows the market recovers. Same goes for index ETFs. So people like me sitting on a big cash position and paranoid AF will have some kind of balancing effect, no?
EDIT #2 : "hindsight" not "hindisight", heh.
Yeah, I'm part of the problem, but I'm also scared of getting fucked. I'm approaching my 60's and have The Fear. So I'm doing this "every man for himself" thing, because buying an investment property doesn't have a face associated with it, like mugging someone. I'm conflicted, but also worried for the future.
Some lady I was suggested to speak to had an AirBnB. Her suggestion was to live in the back of a U-haul truck while looking for something more permanent. The revolution can't come soon enough.
The system is just so incredibly inhuman - you have working class people commuting hours / working 2 shifts and barely being able to afford housing, while others just hoard houses and profit.
It's all just one big sad Monopoly game.
If Boise goes south then I feel a lot of other hot markets since covid will go 2-6 months after.
I was thinking the same thing myself, presumably the economy will crumble from the bottom-up next time. So once my rural hometown is a flaming pile of wreckage, I'll close out all my risky positions
That area IMO is akin to wealth leaving core metropolitan cities and investing in areas where are close enough, yet not near a metropolitan area.
Or something like that.
Would like to think it is going to get better but this recent spike has only left things open more for market manipulation in the rental market. Even if things get better in the housing prices there is still a huge housing issue for the people who make less than $100k a year (average rate of pay in Coeur d'alene is $20/hr, minimum wage still $7.25, waiters can be paid ~$3.60/hr plus tips).
The tent cities option that Ketchum was exploring recently is a thing we are going to be seeing a lot more often.
i wonder how long it will take before the goverments are forced to take action?
i mean, after world war 2, there was a massive housing crisis in europe because of cities turned to rubble, but thanks to massive public works programmes which created housing, this was solved relately quickly (<10 years in some cases).
The free market will not solve this problem because the shortage of houses is actually netting them more money, especially with the massive amount of money pumping going on.
The gains can hold long. The dollar may not.
Depending on the local jurisdiction and price, this could mean that houses are 20% more affordable today than in 2008, modulo down payments.
Formula used: https://www.wallstreetmojo.com/mortgage-formula/
a = Median Sales Price of Houses Sold for the United States (MSPUS)
b = Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL)
c = 30-Year Fixed Rate Mortgage Average in the United States (MORTGAGE30US)
a/b * (c/100/12) * (1+c/100/12)^(30 * 12) / ( (1+c/100/12)^(30 * 12) - 1)
PS: Similar could be said for everything (e.g. stocks). Buying an overvalued asset using debt might be cheaper than before.
Homeowners that locked in 30-year fixed rates might not be too concerned at first. But eventually, even they may need to move or sell someday. Wages or buying power will need to catch up to avoid some downward price pressure.
I couldn't afford to live in my building if I hadn't bought around 20 years ago.
Its kinda astonishing that the past 10 years have been that.
I've often thought of buying an apartment before a house, but it makes very little sense since land is practically not at a premium in Australia.
I expected your response, so I want to say that $2M will buy you a great house on decent land, even in Sydney. Not that it's a nice way to spend that much money. Like the rest of the world.
Like an apartment. People don't want to buy a good piece of land outside the city. That doesn't mean we're running out of land.
It's extremely useful. It's just not in demand. Which is exactly what I just wrote. Land is not at a premium. Space in the cities is, like every nation around the world.
Obviously when people say land is scarce, they mean that the useful land that people actually want to live on is scarce.
Having a billion square km of sand in the desert isn't useful when someone wants to buy a place to live and exist in a society.
The economic policy of printing dirt cheap money and hiding all inflation is not working, because basic necessities (housing, food, basic services) are becoming more expensive while wages are not rising.
recently, i was looking at getting a mortage in my country. According to the accountant bureau, i was able to get roughly 400K in mortage (with 2 people that is). This ends up being around 1500 a month in payment.
My collegue got a house around 6 years ago, and was only able to get around 250K while stilling paying around 1400 a month...
Money is becoming inflated, but wages are not rising to play catchup fast enough.
This wil leave a lot of people in the dust, and if we do not change direction in terms of fiscal and economic policy, it will lead to massive problems in the long run. The housing shortage is putting young people on hold. Which in term means many are considering moving to other countries to get proper housing and be able to get children.
In my direct team, around 1 in 6 young people has his own home. (rent or bought). The rest still live in student accomidation or at home. Many are in their late 20's and some are considering leaving the country for places with better housing markets.
These are people with high paying jobs who can afford to migrate, which will lead to brian drain in the future.
Also, i don't know the situation in the US. But many people are fed up with the current neoliberal economic model because it is not working them, and turning to more extreme politics as a result.
a good example of this is the youth wing of the dutch socialist party being cast out of the party because it is too extreme according to the party.
What's sad is that we had sound financial axioms over 1,400 years ago by means of Islam. It prohibited things like interest, gambling/selling what you don't own (see: call and put options), and a handful of other things, while allowing society to move about within those bounds (which is still a very large space). Competition is welcome, so there is some overlap with Capitalism, but without its downsides.
You sure? Is there a law that says inflation has to happen evenly across all sectors of all markets, at exactly the same time?
did you miss the last few CPI reports?
Having said that I also know more friends/family trying to have kids and move into a home. I also see friends with parent’s in retirement living alone in large homes too afraid to downsize in this market.
I went remote in 2018 living in a Brooklyn studio. My wife and I utilized remote work to move to a smaller city in late 2019, living off a substantially smaller portion of wages, seriously snowballing debt payments and increasing savings. Had we just bought in Jan 2020 we would have saved a bunch. The market was wild then too and already not cooling down here through that winter as it usually would. Little did we know 2020 would bring a pandemic into the mix.
People want to tie themselves to huge loans while not feeling great about he future?
Maybe my perception is off on the pessimism?
Home ownership has been one of the very few reliable ways for the middle class to build wealth, and with housing prices skyrocketing and the future looking even worse, I suspect many people are trying to get whatever they can before any chance they have of owning is gone forever.
live in a pod, eat the bugs.
When a single good, housing, goes up in price, that is not a general shift across many different goods.
What sort of "real" inflation are you talking about here that's bigger than on paper? What's your metric?
Those aspects are different than 2008.
The global market is still exposed to other forms of over-leveraged contagion (aka incestuous ownership), but just saying “US housing prices are higher than an over exuberant peak 13 years ago so therefore its a problem without really considering other supporting or negating factors” is pretty uncritical.
What are your thoughts on the direction this graph is headed?
That's a gentle way of putting it.
EDIT: I am also using 'printing money' in the figurative sense, I'm not making some obtuse point about actual notes being printed. I don't think QE is equivalent to figurative money printing, the money is not coming out of thin air.
I also think it's kind of irrelevant anyway. Drawing down the duration of money by QE will increase M2, that doesn't mean money is being created from thin air. Bonds are drawn out of the economy in exchange for increased reserves. What are bonds if not a form of money?