Housing prices are insane MY thoughts of where we are heading.

Just a cross post of a thread I posted in r/realestateinvesting.Just wanted to counter the post from a few days ago.”This is becoming an everyday post with continued discussion so I wanted to address the macro factors playing into this.Assuming Biden’s $1.9t stimulus is passed ~40% of ALL US dollars in circulation will have been PRINTED in the last 12 months. It’s insane to think about how much capital has been injected into this economy.Now the obvious follow up question is well then inflation will be crazy, right? Short answer is no one really knows. The US Gov’t has openly said the that are unsure, exactly, how inflation runs. The idea is that it’s the correlation between the amount or dollars * the velocity of said dollar (how many times it’s spent).” – /u/SFRInvestmentsThe US Fed has said themselves that they will target an inflation % greater than 2% to hit a long term 2% average. I’m not the smartest but one thing I have learned is to never try and fight the Fed. If they say they want greater than 2% they have a variety of tools they can use to get there. Including the hundreds of billion from the treasury general account they are unleashing in the coming months. I also expect money velocity to pick up as the economy reopens and money start changing hands.A similar story is starting to unfold in CanadaStatistics Canada backtracked on its decision to revise down estimates of underlying inflation, raising questions whether the agency has a full grasp of the real state of price pressures in the economy.In a rare move, the agency said Monday it’s reversing a methodological change — unveiled only five days ago — that lowered some readings of core prices. After receiving negative feedback from economists over the change, Statistics Canada said it reverted to its old methodology and will study the matter further.Source: https://www.youtube.com/watch?v=QRTMuAjtfnESource: https://ift.tt/3usneSV thing I don’t see mentioned much around this sub is the fact the 10 year bond is starting to increase already. So what does inflation have to do with this? So let’s say you are about to lend the government money and inflation is 5%. Would you accept a 1.5% return on those bonds to be losing 3.5% overall or would you say fuck that I’m only buying them for 6.5%? This is what is causing the 10 yr yield bond to increase.It is believed by many that the government would never let it raise too far and would have to implement yield curve control due to all the debt they ran up. However, that is a logical fallacy. The debt they already issued is at a fixed rate and will not increase. There is no reason they cannot let the curve increase to 3-4-5-6% and just issue more short term T-Bills.”history shows that hard assets keep pace with inflation quite well in the long term, so if you think we will see higher inflation, RE should be a good hold as a wealth preserver.” – /u/gobsmashedThis is another common fallacy I see, hard assets don’t traditionally follow inflation. They follow the real bond yield (nominal yield minus inflation). Just compare gold prices to the following: https://ift.tt/37G4u8Q needs to ask themselves the implications 3-4% mortgage rates would have on real estate prices. I’m sure this thread won’t do as well here since anyone who says housing isn’t going up 20% yoy is labeled a nutter. However, I suggest everyone is careful and think of the bigger macro economic picture.https://ift.tt/37IrqUZ via /r/PersonalFinanceCanada https://ift.tt/2O0jirW