You say "Amazingly, the average UK house, for all the inflation that has taken place, is the same price it was at in the 1950s". Is that a bad thing? Doesn't it just mean that wage inflation and house inflation are just noise and that affordability for first time buyers is about the same as it was in 1950?
Hi Dominic. Thanks for taking the time to reply. Maybe I'm being thick here. If the currency has been debased by inflation (which I 100% accept) then surely wages and house prices have been affected the same way. Or is your data saying house prices are one step forward (increased nominal prices) and one step back (inflation) but wages have been a smaller nominal step forward before the inflation step back?
Brilliant Dominic - Having read this yesterday & thinking about what you presented it did align with my feeling that I was doing well in the 90s but feeling that ever since 2005 I have not progressed but gone backwards despite payrises and promotions etc. Pity my children like everyone else of their generation but the lesson is that it is never too late to invest in gold. I would love to see the house price analysis for Staffordshire (the current reality) and Dorset (the retirement dream) 😊
Worth noting the acceleration in GBP house price rises from 1997, when Blair opened the floodgates to mass immigration, then 2020 when Boris juiced it further. Also, you could add these graphs to the collection at wtfhappenedin1971.com
Dom…yes, very interesting and clearly presented ! Thanks . Makes me feel better having sold a house in Hammersmith in 1996 and realising that I could now buy it back and next doors flat as well - had I invested in gold !( I bought 30 acres of farmland , which was a good call too .)Can you please do the rest of the Uk!!!? There is a challenge for you .
Dominic Frisby's July 2024 piece in The Flying Frisby asks how much your house has really gone up, measures it in gold, and finds most of the nominal gain disappears. He is right about the unit-of-account problem and stops there — reaching for gold as the stable alternative. Gold is a Secondness answer: it reacts against fiat deterioration without settling the rule that would close the argument. The rule is: if the unit of account deteriorates because private banks create it at interest into asset markets, the solution is not a commodity peg but the removal of interest from the creation mechanism. Unidad de Fomento has provided a stable, inflation-indexed unit of account for Chilean mortgage and property transactions since 1967 — without commodity backing, without deflationary constraint, without the liquidity crises a gold standard produces at the bottom of the cycle. Frisby names the problem correctly. The answer has been operating in South America for fifty years. https://grubstreetinexile.substack.com/p/the-other-212000-text-to-voice-script?r=l1oox&utm_campaign=post-expanded-share&utm_medium=web
"Socialism - in ALL its malign forms - make us poorer"
Indeed
You say "Amazingly, the average UK house, for all the inflation that has taken place, is the same price it was at in the 1950s". Is that a bad thing? Doesn't it just mean that wage inflation and house inflation are just noise and that affordability for first time buyers is about the same as it was in 1950?
Unfortunately, not because wage inflation has not kept up. Money has been debased.
Hi Dominic. Thanks for taking the time to reply. Maybe I'm being thick here. If the currency has been debased by inflation (which I 100% accept) then surely wages and house prices have been affected the same way. Or is your data saying house prices are one step forward (increased nominal prices) and one step back (inflation) but wages have been a smaller nominal step forward before the inflation step back?
Brilliant Dominic - Having read this yesterday & thinking about what you presented it did align with my feeling that I was doing well in the 90s but feeling that ever since 2005 I have not progressed but gone backwards despite payrises and promotions etc. Pity my children like everyone else of their generation but the lesson is that it is never too late to invest in gold. I would love to see the house price analysis for Staffordshire (the current reality) and Dorset (the retirement dream) 😊
Thanks Stuart.
I’ll do a piece on that.
Amazing.
Worth noting the acceleration in GBP house price rises from 1997, when Blair opened the floodgates to mass immigration, then 2020 when Boris juiced it further. Also, you could add these graphs to the collection at wtfhappenedin1971.com
Dom…yes, very interesting and clearly presented ! Thanks . Makes me feel better having sold a house in Hammersmith in 1996 and realising that I could now buy it back and next doors flat as well - had I invested in gold !( I bought 30 acres of farmland , which was a good call too .)Can you please do the rest of the Uk!!!? There is a challenge for you .
Dominic Frisby's July 2024 piece in The Flying Frisby asks how much your house has really gone up, measures it in gold, and finds most of the nominal gain disappears. He is right about the unit-of-account problem and stops there — reaching for gold as the stable alternative. Gold is a Secondness answer: it reacts against fiat deterioration without settling the rule that would close the argument. The rule is: if the unit of account deteriorates because private banks create it at interest into asset markets, the solution is not a commodity peg but the removal of interest from the creation mechanism. Unidad de Fomento has provided a stable, inflation-indexed unit of account for Chilean mortgage and property transactions since 1967 — without commodity backing, without deflationary constraint, without the liquidity crises a gold standard produces at the bottom of the cycle. Frisby names the problem correctly. The answer has been operating in South America for fifty years. https://grubstreetinexile.substack.com/p/the-other-212000-text-to-voice-script?r=l1oox&utm_campaign=post-expanded-share&utm_medium=web