It is disingenuous to state your pet theory as though it were the explanation given in the video. By 1:20 he summarizes that it is down to “construction failure”, “excessive speculation”, and “financialization of housing”
Your theory doesn’t explain the same situation playing out across every other 1st world country at the same time.
All world countries are operating on fiat currencies, that are inflated away at similar rates.
"financialization of housing" is basically the same thing as "FED". Absent value retaining money, flooded with worthless paper, people look for anything scarce they can park their savings in, turning a social necessity (housing) into savings account, and give into incentives to make it artificially scarce (like NIMBY). Historically (before fiat money) housing was a poor investment. https://www.lynalden.com/most-investments-are-bad/
> financialization of housing" is basically the same thing as "FED“
You clearly do not understand what financialisation actually means - it’s creation of derivative financial products based on the underlying assets. Eventually these products become so complex, no one knows what’s happening to the original assets. That’s how we got 2008
And you can have 2008 style collapse even if your currency is based on gold coins.
The video defines “financialization of housing” as referring to cheap mortgages and low interest rates, and not anything to do with fiat currency. It’s fine to offer your own theory, but trying to claim the video is about your theory when it’s not is disingenuous. That aside, claiming it is down to the use fiat currency doesn’t explain why it’s a new issue, when we’ve been on fiat currency longer than most of us have been alive.
I don't think you understand what the poster was saying.
leaving the gold standard allows the Federal reserve to create any amount of inflation they want which allows the government to loan as much money as they want as the Federal reserve can just print money to pay the debt.
the usa is currently hitting unforeseen levels of interest rates on that debt which means inflation is going to increase in perpetuity.
which means rich people need places to park their money as this is the beginning of massive currency devaluation
It does if you continue printing to pay off the interest (currently $1 Trillion per year) while adding $1T of new debt every 100 days. The question is who is buying the projected $10 Trillion worth of maturing bonds in 2024?
This is only part of what drives inflation. Yes, increase in money supply creates upward pressure on inflation. Higher interest rates reduce borrowing, which decreases demand for goods and services, this has downward pressure on inflation. This explains Fed activity over the last couple of years…the goal is to reduce inflation, not create higher interest payments on national debt…
Raising interest rates decreases inflation in the short term but that debt continues to increase every year.
In 2024 the interest expense surpassed defense spending for the first time in history.
the fed government already can't meet its obligations without borrowing.
so what that means is the Federal reserve has to print more and more money every year to compensate for these debt obligations of the federal government.
which is ultimately inflation
you're right there's other factors of play but this is the gigantic looming elephant in the room
lol, except for all the bank failures that required BTFP / another bailout. Commercial real estate meltdown anyone? Imagine if the FT didn't publish economist propaganda for once.
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