re: Fed hides weekly M1 supply, says "money doesn't matter"

quote:

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to point to an increase in the price of houses and label that "asset price inflation" is just as misleading

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But that’s what it is and not misleading at all. It has an impact on inflation, to the extent that it impacts the overall housing costs, but this relationship is small and pretty weak, especially since the primary monetary policies that have the greatest impact on home price increases (lower interest rates) is a result of increasing demand because it LOWERS the cost of owning a home.

For example, my home value has increased ~20-25 percent over the last couple of years. That has resulted in a slight increase in my housing costs, as my property taxes, which are a portion of the housing costs, have risen by a portion of that value increase.

But I’m planning to refinance soon (wish I had done it sooner), so my payment will decrease AND because of the ASSETT PRICE INFLATION, I’m going to be well <80% LTV, and I’ll be able to drop my PMI, and save $1,300 a year. So the asset price inflation will have both indirectly (interest rate relationship) and directly (dropping PMI) decrease the cost of my housing (and many others in my situation) which is a deflationary pressure to offset the inflationary pressures of the asset price increase overall.

See you would know these things if you actually understood inflation and the assets you so confidently discuss.

I mean it was obvious you didn’t understand it when you cited the Chapwood index in an inflation discussion a couple months ago, because not only are the index estimates laughably disconnected from reality for anyone who understands math and reality, the methodology itself is so ridiculous and so invalid, that the only way to accept it as a valid estimate (unless someone dishonestly knows it’s not valid but uses it anyways) would be through outright ignorance, whether willful (which I suspect in your case) or a lack of capacity (which I don’t suspect in your case).