Oddbean new post about login | logout But the price of exporting trade is importing inflation and deflation. You've given up control and it takes on its own dynamic. China built factories to supply the entire world with goods. They can't just run them at half-capacity because everyone is now old, broke, and done shopping. They have to run at full-capacity and some will go bankrupt and close, and that will lower production mid-term.
So, if China manages to export deflation to the West that will eventually dampen official measures of inflation. That may allow central banks to cut interest rates. This will likely lead to house prices remaining high / unaffordable. It’s hard for the average Joe to avoid having his life dictated by these inflationary/ deflationary ebbs and flows.
House prices will come down (in real terms), for other reasons, such as an aging population and mass-immigration becoming less popular. Housing costs tend to be combined (mortgage+price), so if interest rates go up, prices go down, and vice-versa. There's just a lag.
The sad thing is that there’s much needless suffering while we wait for the ‘right’ thing to happen. Patience is a virtue but it ain’t easy!
Tom over in SN agrees! https://stacker.news/items/543188/r/halalmoney