Our Economies Run On Housing Bubbles

Zero interest rates, government ‘help to buy’, mass immigration; the UK has found all sorts of ways to prolong this ponzi. So much so that the thick as two short planks estate agent who lives next door to me is telling me that prices will never come down, this time is different, it’s a sure thing, yadda yadda yadda.

Irony is, she cant actually afford to buy the poorly-built shoebox she rents on her non-existent commission because, in her own words, the market is dead. Gee, I wonder why. This is a very common level of stupid in this country, especially here in Londonistan. Greed breeds envy, few understand what is really happening, but everyone still thinks they will be a winner in the housing lottery.

,,,,certainly, fewer arms sales.

I am reading Henry Miller’s “Nexus” once again. I think I first read it over 40 years ago.

The amazing thing about this book – to a modern reader – is how the protagonist was always short of cash and had to have a massive number of acquaintances who would lend him small sums of money.

He was obliged to deal face-to-face with lots of different people and to understand them to some degree. He only repaid the ones who he thought he might need to borrow from again. It is so very different from using a credit card. Of course there were no mobile phones or internet so meeting new people was a much more important activity. In some ways, people had a lot more freedom to carry on affairs and so on.

Living in the midst of one of these epic bubbles (Greater Toronto Area), it is frightening to experience on so many levels. While I can’t help but hope the crazy asset price inflation in housing continues for a few more years (at least until my wife retires and we can take advantage by selling our highly over-priced home–we could probably get about $1 Million for our 1500 square foot home we purchased for $210,000 in 1995–and move out of the GTA where we could purchase 4 or 5 homes of equivalent size/quality), I see the downside also.
My children have little to no hope of ever being able to afford purchasing, let alone renting, in the GTA without going into deep, unsustainable debt. With the increased ‘values’, our local Town is pursuing development of suburban homes and retail plazas like there is no tomorrow, paving over very limited farmland at a pace that boggles the mind.
I have been opposing this development for some years but the cognitive dissonance and propaganda surrounding the ‘growth is progress’ narrative is astounding and virtually impossible to counter. In fact, my local councillor seems far more interested in backing the plans of a developer to place increasingly dense housing in our area despite the backlash from virtually all local residents (one can’t help but wonder whatever happened to representing the wishes of voting citizens over the monied interests; I know, it likely has never existed except in our conditioned minds).
My town lives in a somewhat enviable position in having a good chunk of arable land remaining, but it has been disappearing at an alarming rate the past decade or two and I see no end in sight. Such short-sightedness is not in short demand here in Canada where the power-brokers are pursing the growth narrative with all possible speed. It’s such a shame.
Infinite growth on a finite planet, what could possibly go wrong?

[“If not for the constraints, whether they emanate from energy and/or finance, would growth have been able to continue at prior levels? Both the energy and the finance/political camps mostly seem to think so.

The energy crowd -peak oilers- appear to assume that if energy would have been more readily available, economic growth could have continued pretty much unabated. Or they at least seem to assume that it’s the limits of energy that are responsible for the limits to economic growth.“]

Of all constraint that will tighten the noose on us, ‘Peak Oil’ is the queen bitch of them all. But far from the only one hitting us hard;
*Demographics, and therefore LAND will (it already started decades ago for some, centuries ago for others) provide us with a crude reminder of a primal reality.
*Water …
*Barring a deus ex machina discovery in physics that would transcend our energy predicament, diminishing returns on technological advancements coupled to vicious scaling issues will dissipate the fog of euphoria that’s currently acting as an anesthetic.
— i.e. There is no such thing as “Moore’s Law”. Transistor size are approaching silicon’ hard physical limits and even if they weren’t , they would not make cars fly…

[“But what kind of growth do both ‘fields’ envision? Growth to what end, and growth into what? 4 years ago, I wrote What Do We Want To Grow Into? I have still never seen anyone else ask that question, before or since, let alone answer it.

We want growth by default, we want growth for growth’s sake, without caring much where it will lead us. Maybe we think unconsciously that as long as we can secure growth, we can figure out what to do with it later.“]

You mean that a nice home, on a nice plot of land with a beautiful garden was never in the cards for every citizen of the planet ?

You’re saying that this wasn’t the overarching goal of the epic increase of productive capacity ?
😉
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One of your all time best post Ilargi…