I will be wrong on house prices

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When the hot air finally leaves this new hous­ing bub­ble, its defla­tion will be too slow to result in a 40 per cent fall from June 2010 to June 2025…

Right up until the early 20th cen­tury, tak­ing an inno­cent stroll on the fore­shores of the US West Coast was haz­ardous for your health: you might sud­denly fall uncon­scious, and wake up to find your­self an unfree sea­man aboard a US clip­per bound for China. That’s where the term “Shang­hai­ing” orig­i­nated: not because the crime hap­pened in Shang­hai, but because Shang­hai was nor­mally the victim’s first port of call as a ship­ping slave.

How do I know? Because I looked it up on Wikipedia, which counts as research on such top­ics – though not on, say, the link between bush­fires and cli­mate change. Why did I bother? Because my call on house prices was shang­haied by the prop­erty lobby, and now that I am near cer­tain I’ll be wrong even as I defined it, I want to un-Shanghai myself first.

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About Steve Keen

I am a professional economist and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous debts accumulated in Australia, and our very low rate of inflation.
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4 Responses to I will be wrong on house prices

  1. Steve Hummel says:

    You’d right even while you were wrong.…if you’d cog­nite on the fact that, ulti­mately, the finan­cial par­a­digm is what is impor­tant. Aus­tralia did good by the first home buy­ers credit. How­ever, they will not ulti­mately do good.…unless that momen­tary pol­icy of mon­e­tary grace, the free gift is gen­er­al­ized and per­pet­u­ated for the con­sumer so far as guar­an­tee­ing a mid­dle class lifestyle whether one works or not.
    Do you not see that fact when you look at the Aus­tralian hous­ing market.…and then extrap­o­late it out­ward to the mar­kets in gen­eral? Sup­ple­ment­ing indi­vid­ual pur­chas­ing power directly is necessary…no mat­ter whether the end price of a prod­uct is $1,000,000 or $100. You’ve advo­cated a mod­ern jubilee which is wis­dom. Just make it a per­ma­nent and math­e­mat­i­cally equi­l­li­brat­ing pol­icy with a uni­ver­sal div­i­dend and com­pen­sated retail discount…and the sys­tem will flow as freely as truly free mar­ket the­ory can be.
    As I say on your blog, mon­e­tary grace and actual, unob­tru­sive, adult con­trol of the money sys­tem in the form of the above policies…are pow­er­fully trans­for­ma­tive. Let us have them.…in per­pe­tu­ity. You really should have the faith.…as in con­fi­dence to acknowl­edge that truth.

  2. TruthIsThereIsNoTruth says:

    that’s a good one SH — you can be right even when you’re wrong as long as you have faith in my words. Turn­ing the nat­ural propen­sity for inac­tiv­ity (result­ing from a overly glacemic diet) to mid­dle class wid­gets may not be as noble as turn­ing water into wine but the inspi­ra­tion is trans­par­ent. You’re a mod­ern day mes­siah aren’t you SH?

  3. Steve Hummel says:

    Actu­ally yes, as we all are. It’s really only that Jack in the box finds it hard to relate to Jack out of the box.

  4. Steve Hummel says:

    Tran­scen­dence is not only for indi­vid­u­als, it’s for sys­tems too. It’s just that tran­scen­dence occurs in humans directly with ideas, and in sys­tems directly with pol­icy. The curi­ous fact is not only that poli­cies are derived from ideas as well, but that the same ideas are applic­a­ble to both indi­vid­ual humans and human sys­tems and that the tran­scen­den­tal effects of cer­tain ideas are com­pletely trans­lat­able between human and sys­tem, its sim­ply a mat­ter of expe­ri­ence for the one and aligned pol­icy for the other. And finally, the most impor­tant thing you can under­stand about per­sonal expe­ri­ence and the real­iza­tion of its alignabil­ity with sys­temic pol­icy is that they are both instantaneous.

    Of course there are count­less pos­si­bil­i­ties for dis­agree­ment with the align­ment of tran­scen­den­tal eco­nomic and mon­e­tary ideas and pol­icy, but most of those are just ideas them­selves and of course lesser ideas com­pared to tran­scen­den­tal ones at that. Most of the remain­der are puri­tan con­fu­sions about moral­ity, con­fu­sions about mon­e­tary stocks and flows and the dig­i­tal nature of our money sys­tem or just thinly dis­guised self inter­est or power. In the last analy­sis Tech­no­log­i­cal inno­va­tion vir­tu­ally resolves the prob­lem of pro­duc­tion and aggra­vates the inher­ent sys­temic prob­lem of a scarcity of indi­vid­ual incomes, and that’s why the tran­scen­den­tal con­cept of Grace, the free gift applied to the eco­nomic and mon­e­tary sys­tems needs to be awak­ened to.

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