People in the US are getting poorer since 1963 (housing data shows). \ stacker news ~bitcoin

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People in the US are getting poorer since 1963 (housing data shows).

5894 sats \ 21 comments \ @AyCaramba 31 Aug 2023 bitcoin

I calculated the number of years it would take the average US person to afford the average house (average price) every year, and numbers show the purchasing power for housing is actually decreasing. In other words, people in the US are poorer than before housing-wise. In fact in 2022 they are poorer than ever, since 1963.

For example, in 1963 GDP Per Capita was $3,375, the average house costed $19,375, meaning it would take 5.74 years of saving 100% of the income to purchase a house. In 2022 that number was 7,01 years.

People in the US may have high purchasing power for general goods and services, but they have less purchasing power for buying a property.

This is the evolution through the years.

https://imgprxy.stacker.news/-6LhLGwW__8stZ8IURKJtDUTbST0xLN-POzTfkYIJpg/rs:fit:600:500:0/g:no/aHR0cHM6Ly9pLmltZ3VyLmNvbS9GZHNlV3J2LnBuZw

It is curious, but the year with the highest purchasing power was 1972, with 4,94 years. From that year on, the purchasing power has been decreasing in average. I guess from that moment on, the money printing never really stopped, due to the gold de-pegging.

Where is the prosperity achieved throughout all these years? Amazing to see that most people do not notice and keep accepting Fiat money and central banks. If the US is getting poorer, the outlook is even worse for most other countries as well (mine included of course).

Bitcoin is the only way.

Sources House prices: https://fred.stlouisfed.org/series/ASPUS

GDP Per capita: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=US

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131 sats \ 7 replies \ @edulopesf 31 Aug 2023

I'm not an expert but other factors also may be affecting the housing market...

Most notably excess of regulations on real estate as well more people moving in to more populated areas...

But of course, FIAT currency inflation is a major factor.

I almost sure that's happening on other countries as well...

10 sats \ 0 replies \ @AyCaramba OP 31 Aug 2023

Yeah, for sure there many other factors as well, and also there are many major economic events that have affected the numbers (middle east oil crisis, 2008 crisis, 70's inflation) but the general trend is clear IMHO. Cheers!

10 sats \ 2 replies \ @m00ninite 31 Aug 2023

In some areas, there's a lot of speculation on housing as well. In my city, there was (maybe still is) a ton of empty apartment buildings owned by Chinese investors. People buying up property and hoping for a return, without bothering to rent them out.. it's really messed up the supply-demand dynamics.

20 sats \ 1 reply \ @Storyteller 31 Aug 2023

Investors are smart. They know the fiat money is a scam. The moment the get fiat they turn it into stone! Stone is more precious than paper. If the stone is an appartment, a villa it is more worth.

0 sats \ 0 replies \ @AyCaramba OP 31 Aug 2023

Exactly, I have heard many times the saying "put the money to work". It must be about this. Investors are brainwired with this rule and I agree they probably know it is a scam.

0 sats \ 2 replies \ @Undisciplined 31 Aug 2023

Houses are also larger, higher quality, air conditioned, etc. Also, the extremely low interest rates of the past couple decades have radically inflated housing prices.

21 sats \ 1 reply \ @Storyteller 31 Aug 2023

Indeed. Because fiat money can be printed ad infinitum the price of money - the interest rate - was close to 0. In Europe it was even negative. You had to pay the banks to leave your money on the banks.

So people got fiat money and some invested in real estate.

While average Joe was happy with the free stimulus checks and the helicopter money by the government, the wealthy people grabbed the houses for free.

This always happens. Free money doesn’t actually exist. You get the bill back in higher prices of food, energy etc and everything that cannot be printed easily.

People think fiat money is wealth. Fiat money is worthless. It is what you can buy with it that is worthed.

A house A vacation A car

Those are valuable things. Not the money.

0 sats \ 0 replies \ @Undisciplined 31 Aug 2023

Sure, some of it's fake, but some of it is just a natural outcome of greater material wealth and more advanced technology.

121 sats \ 3 replies \ @danieltapa 31 Aug 2023

wtf happened in 1971?

31 sats \ 2 replies \ @AyCaramba OP 31 Aug 2023

The US dropped the gold standard. From then on, US money stopped being backed by gold, so the government (the Fed) could print money with no restrictions. https://en.wikipedia.org/wiki/Nixon_shock

0 sats \ 1 reply \ @danieltapa 1 Sep 2023

yes but Nixon said it's only temporarily, right? anytime now we're back to gold!

0 sats \ 0 replies \ @AyCaramba OP 1 Sep 2023

Hahahaha absolutely!

110 sats \ 1 reply \ @AllCatsAreEvil 31 Aug 2023

Housing is crazy now in the UK too. Distortions in the market caused by constant government intervention have become so bad that there's no basis in reality any more.

0 sats \ 0 replies \ @AyCaramba OP 31 Aug 2023

Yeah I have heard in the UK housing prices are very high too. The common denominator is the fiat currency and central banks. Another indicator that may be correlated with the increasing prices of housing is the government debt, the US and most developed countries have a very high government debt.

20 sats \ 1 reply \ @Storyteller 31 Aug 2023

If you want to continue this research here are some suggestions

Try to find data about the average household income, per state

Find data about the debt per household (credit card debt and student loan debt)

Try to find data about household savings per state

Try to find data about average house prices per state.

Try find out any data about down payments and mortgage payments (how much rent do you need to pay based on the current interest rate).

This will balance you macro economic first indication.

You will probably see that the situation is worse in some states where house prices sky rocketed.

But there is another pattern in the system (I’m currently analyzing systems)

Houses are investment for some people. Real estate investments. You got REITs real estate investment trusts I think. The wealthy people became wealthier because they bought real estate (houses).

So while average Joe can’t buy a house because his income is not increasing a lot compared to the house prices, the Wealthy James’ got more income/asset price aporeciation because James owns REITs and maybe 3 houses as assets.

Once you accumulate assets you become wealthier because it is exponential.

So the real estate sector also affects the income distribution. More real estate is higher income. That makes the income distribution skewer. So the average gdp per capita is not always the best metric.

James will get a higher piece of the GDP in profit and rent one he gets the assets and the house.

Next imagine what the Chinese who receives the dollars, because there is a huge deficit on the current account of USA with China, will do with his dollars.

He will buy USA bonds but he will also buy houses.

USA houses.

This is another indirect effect of the USA system. It is called a feedback loop.

Now a lot of the dollars ending up in the hands of Chinese are being put back into the real estate sector.

There is higher demand for houses now from Chinese. A larger population. They come to some states and throw dollars around.

Average Joe can’t make it.

Future Now the BRICS work together. They dumb the dollar. The petro dollars. All those dollars coming back home.

What do you think will happen with the future price of homes. Can you forecast that?

Imagine 10 times more dollars comming home and 25% of those dollars chasing real estate property.

And the average gdp/capita only increasing with say 2%.

You got a great case.

Maybe you need to start buying more Bitcoin.

Because according to the stock to flow model Bitcoin has a higher stock to flow than real estate and will also be higher than gold. So Bitcoin is more precious than real estate.

I expect some of that Chinese dollars and also the local dollars panicking and start chasing Bitcoin.

I build macro economic models. To analyze these scenarios. What happens if this indicator changes. I have the USA macro and investment model on my wishlist to make.

You cannot firecast exactly what is going to happen but you at least can see and start abalyze how things are related.

What are you going to do? Are you going to stack more sats? The digital liquid real estate?

Lol

0 sats \ 0 replies \ @AyCaramba OP 31 Aug 2023

Hey thanks for the ideas for a deeper analysis! My main goal of this very brief analysis was to consider the largest timeframe available, and at the same using only the most reliable sources.

I will try to research those topics, because I agree my analysis is clearly insufficient considering all the nuances and factors there are. I do not know though if I will be able to get reliable data back from the 60s.

0 sats \ 1 reply \ @Storyteller 31 Aug 2023

That is a great first indication. However the average gdp per capita and the average house price don’t say a lot.

You are dividing two averages on each other. How many real people actually earn the average GDP per capita? And how many houses actually cost the average price?

There is probably a huge income equality in USA. There are a lot people earning below that average gdp per capita. And a lot of millionairs and billionaires.

Check the website wtfhappened in 1971. You see that from the moment Nixxon defaulted all the graphs went up.

Probably the reason is that the prices of houses grew faster than the average income/economy.

The wealthy people invested in scarce assets (houses) and that caused the houses to increase in price faster than the incomes.

If you watch all other precious assets like Mona Lisa, gold, value stocks probably you will see the same. You can buy less of them.

The CPI is a basket of goods that smart people don’t want to buy, your personal CPI includes holidays, steak, lobster, twice a month dining out in a restaurant, every 3 years a new macbook. That is not the regular CPI.

So they are fooling us. Telling is what to buy.

If you measure the gdp per capita in terms of the bitcoin, how much bitcoin can you buy in 2023 compared to 2009 you will also see you can buy much less bitcoin.

It means all precious assets go up.

But yeah it is a pitty that young USA people will not be able to own a house.

0 sats \ 0 replies \ @AyCaramba OP 31 Aug 2023

I use averages precisely because of all the debatable nuances there are in the income distribution. I have no doubt the wealthiest 10%-20% of the people have increased their purchasing power to buy property. For the poorer 80% of the people, this decline is even worse.

Because of the income inequality distribution, I could have used the median values instead of the averages, and that would have shown even a grimmer picture than the numbers I showed. But that would be something an economist can debate saying that the total share of wealth is the important element, thus the average numbers are the important. Also I did not find in my sources any data other than averages.

0 sats \ 0 replies \ @Public_N_M_E 31 Aug 2023

It's not just the US. Most countries are objectively poorer than they were in the 1930s and that was supposed to be the great depression. Our buying power has never been lower.

Bitcoin fixes this.

0 sats \ 0 replies \ @teodor 31 Aug 2023

Move to Panama :))

0 sats \ 0 replies \ @DeltaClimbs 31 Aug 2023

Oh, you think houses are fungible? Then why do you need bitcoin? -- checkmate, LARPer who does not normalize to square footage and other variables. 🤡🤡🤡

Edit: "the US is getting poorer"

All right, no more being nice, you're a fucking idiot and you should feel bad about it. Do some fucking arithmetic!!!

For anyone curious about whether this guy is a fucking moron as I assert, I have put together this proof: https://civilizationmetrics.org/