Friday Update October 15, 2021

Well shoot maybe it started?  The dwindle in inventory towards winter.  We're at 608 this week, and I won't call it a trend till it is one.  Still running at roughly a 9 real estate agents to every listing ratio.  Since building a house is hard and becoming a real estate agent is easy I propose making it harder to become an agent.  Because geeeeeee golly y'all, some real morons in the mix.

How about lumber for the rally?  Sumbitch is up around $750/1000 board feet and 2 by 4s have gone up at the Home Depot to around $4 rather than the cozy $3.77 I got used to.  While this particular commodity could certainly be a lot cheaper, it could also be a lot more expensive as we saw in May and this isn't quite the nail in the coffin for building.  Lack of competent labor though?  That might do it.

You know how I've been talking about inflation as a structural problem for years?  Like how doing ridiculous shit at the macro level basically destroys the lower and middle classes while benefiting the rich?  Meanwhile the lower and middle classes bicker about whether a $15/hour minimum wage is a good idea.  And In and Out is paying staff $20/hour, cause like the market figures it out without government and all.  What good fun to watch.

 And you know how on the news all you hear is stuff like "transitory inflation", "bottlenecks", and "supply chain issues"?  The new thing to blame inflation on of course is energy prices.  Let me break down how that is just a blunt bullshit lie.

Today West Texas Intermediate crude oil is trading just over $82 a barrel.  That results in gasoline prices in Colorado of around $3.66 or whatever,  probably $3.30 at Costco and $3.80 by the freeway or something like that.  June 2, 2008 crude oil was at $132/barrel.  I very clearly remember paying well over $4/gallon for gas.  That was 13 years ago.  M2 money stock was at 7.725 Trillion Dollars, today it's at 21 Trillion.  

In June of 2008 the median price of a home in Colorado Springs was $223,000.  Today it is closer to $435,000.  By that logic alone if gas prices kept up with the inflation in the real estate market gas would be closer to $10/gallon.  Isn't it cool that's not how markets work?

The reality of energy prices, oil specifically, is they vary based on supply, demand, and political conditions.  They go up and they go down.  Like for example last year around March oil prices actually dropped into the negative because there was such as a massive glut in the market since everyone was forced to shut up and stay home.  Do you guys remember a correlating price drop on groceries and other daily necessities?  No!  I remember having to fight for toilet paper though.

So if oil prices drop and retail prices stay put there is not a newsworthy story there.  But if retail prices shoot up, 5.4% YOY according to the latest CPI report, then rising energy prices are an easy thing to point the finger to in the eyes of our corporate owned "free" media.  Let me ask you this, when oil prices do come back down do you expect the price of goods and services to come back down accordingly?  Me neither.  Because I'm not a fucking idiot.

The only factor that is contributing to inflation in any meaningful way is shown on this same graph that I like to throw at you all the time.

You see that tiny gray line towards the right?  That's the recession due to the thing that if I mention on this blog then certain social media sites will restrict how far this blog goes.  True story!  I ran the metrics on the back end of my website and whenever I mention the Crow Vids, not in the title but somewhere buried in the text like here for example, the distribution goes to shit.  Anyway that gray line represents this like latest and greatest crisis that the world has ever seen, and since January of 2020 we printed over 5 Trillion Dollars.  That represents a 33% increase in money stock in less than 2 years.  

That's it.  That's the whole story.  Rising energy costs are due to a glut of money.  Rising food costs, same reason.  Rising real estate costs, same reason.  Rising cost of labor, do you think that has something to do with the WTI Crude price?  No, just more money in the system chasing the same goods and services.

The only reason these news outlets play this up to be something that it isn't is because telling the truth would make people question their faith in this financial system and the dickweeds in charge of it.  Bad for business.

Meanwhile locally our median sold price came down a bit for the month to $435,000 and our average went back up over $500,000.  Statistically irrelevant and will likely bounce in the Spring unless we see a significant increase in interest rates.

Rates on the 10 year T notes are 1.57% or roughly the same as in June of this year.  No drastic uncontrolled sell offs in bonds, and for all the talk of the Fed tapering I bet it's just talk.

In conclusion ask yourself.  Does the fascist state give a shit about me?  Does the media that is controlled by the companies that sponsor that state have my best interests in mind?  Why am I being asked to look in one direction while getting hit from the other?

With those questions in mind you do what you need to do to protect yourself and your family in the short term and the long term.  To me that means owning appreciating assets and betting against depreciating ones.

Enjoy your weekend gang, and thank you for all the positive feedback on my rants!

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