Unfortunately, the US Dollar Needs to Collapse

In 1984, real median household income in the US (meaning inflation adjusted) was about $53,300. So the typical household in 1984 brought in that much money on an annual basis.

In 2020, that number was about $65,000. That might seem like a decent increase from 1984, but that number is, due to the rampant inflation of the past few years, highly outdated today.

And real household incomes as recently as 2014 were about $58,700, only a few thousand dollars more than the number from 30 years prior.

In nominal dollars (meaning not adjusted for inflation, the average US household was pulling in about $22,000 a year in 1984.

Back in 1984, the median sales price of a home in the US was about $78,000. We won’t worry about adjusting for inflation just yet.

So that would mean that in 1984, the median house in America cost about 3.5x the median household income. Not great, but definitely not bad. Homes were still relatively affordable back then.

Today, however, the median sales price of a home in the US is $440,300. That’s more than 6.7x the median household income.

Homes are increasingly out of reach today for the average American.

This is even worse than the peak of the housing bubble in the 2000s.

In Q1 2007, the median sales price of a home was $257,000. The median household income back then was $50,000. Homes were about 5.1x greater than the median household income.

Homes in America have never been less affordable than they are today.

And while people are concerned and frustrated, I think, just based on personal experience, the prevailing sentiment is more or less indifference–people are just assuming the housing market will correct and come back down after being out of whack for the past two years or so.

I’m not so sure about that. The wealthy and powerful in this country want the real estate market zooming ever higher. It’s where so much of their wealth is tied up. They want out of control home prices.

Big asset management firms are buying up whole neighborhoods with the intent of generating rental income.

And who knows how much of the real estate boom is fueled by foreign investment–all the dollars that flow out of the US to buy imports flow back into the US in the form of, primarily, either treasury bond purchases, stock purchases, or real estate purchases.

Apparently, Chinese investors bought $6.1 billion worth of real estate in the US between April 2021 and April 2022.

But that’s not even close to the whole problem: over that same time span, international investors in total purchased a mind-boggling $59 billion of US real estate.

Fifty-nine billion dollars. In one year. Sold to foreign buyers.

If we try to do the math here to begin to wrap our heads around that number, simply dividing 59 billion by 440,000 (the median sales price of a home in the US currently) comes out to 1.475 million homes sold to foreign buyers in a one year span.

If you’re wondering why housing prices keep skyrocketing despite the fact that Americans transparently cannot afford them, this explains it. Americans aren’t fueling the housing bubble–foreign buyers, as well as institutional investors on Wall Street, are.

The whole time I’m wondering, “When did everyone in this country get so damn rich that homes, which just a few years ago were fetching $300-400k, are now fetching $600-700k and more?”

The answer: Americans didn’t get rich. In fact, they got poorer. But foreign money is flooding into our real estate market and pushing prices into the stratosphere.

And guess what: a lot of these foreign buyers, according to the Yahoo article linked above, are paying cash. So no matter how high interest rates and mortgage rates get here in the US, it doesn’t matter. These foreign buyers paying cash for homes are immune from those fluctuations.

That’s why I’m not entirely certain home prices will come back down to earth. Now, of course, if we go into a major economic slowdown, it’s likely the whole world will as well, which will cut down on those foreign investors buying all these homes here in the US.

But still, this whole process, where houses in America have been turned into commodities that are bought and sold by international investors, it’s ruining the country. These are not stocks, these are homes–they are the manifestation of the American Dream. You get a job, save up for a down payment, and buy a home to start a family in. Then, after some time has passed, you upgrade to a bigger home.

Not anymore. That’s impossible these days unless you’re in the top 5% or so of income earners in the country.

It should go without saying that we should have banned sales of homes to foreign investors a long time ago, but why would our government ever do that when they and their wealthy friends are primarily the ones benefitting from the soaring home prices?

The commodification of the US housing market has got to stop.

Unfortunately our government will never lift a finger about it.

What are they focused on? Why, the “Inflation Reduction Act,” of course. As you probably already guessed, the bill does nothing of the sort and will in fact make inflation significantly worse. The whole idea of government spending to combat inflation is laughable on its face.

But as if that wasn’t bad enough, a major provision in the bill mandates that 87,000 new IRS agents be hired. There are only about 75,000 currently, so the IRS will now more than double in size.

They claim it’s to “tax the rich,” but in reality the goal is to financially terrorize and squeeze average Americans more than ever before.

Jazz Shaw had a great write up on the matter:

Tucked away in the hilariously-named “Inflation Reduction Act” that Joe Manchin has been working on with Chuck Schumer is one significant bit of spending that has been mostly flying under the radar. The measure would fund a massive expansion of the Internal Revenue Service to the tune of eighty billion dollars. And we’re not using the word “massive” in a hyperbolic fashion here. This money would go toward hiring an additional 87,000 employees for the detested agency, more than doubling the size of its workforce.

As the Free Beacon points out this week, that would make the IRS larger (in terms of manpower) than the Pentagon, the State Department, the FBI and the Border Patrol combined. And what do they plan to do with that many people? Do you really need us to tell you?

If Democrats have their way, one of the most detested federal agencies—the Internal Revenue Service—will employ more bureaucrats than the Pentagon, State Department, FBI, and Border Patrol combined.

Under the Inflation Reduction Act negotiated by Sen. Joe Manchin (D., W.Va.), the agency would receive $80 billion in funding to hire as many as 87,000 additional employees. The increase would more than double the size of the IRS workforce, which currently has 78,661 full-time staffers, according to federal data.

The additional IRS funding is integral to the Democrats’ reconciliation package. A Congressional Budget Office analysis found the hiring of new IRS agents would result in more than $200 billion in additional revenue for the federal government over the next decade. More than half of that funding is specifically earmarked for “enforcement,” meaning tax audits and other responsibilities such as “digital asset monitoring.”

So this expansion would turn the IRS into an even larger beast than it already is. And we know that it’s also one of the most heavily armed agencies in the federal government. So what do they need all of those people for, not to mention all of the guns and ammo?

Democrats always talk about the need to go after “the top one percent” and make them “pay their fair share.” It’s true that we have quite a few wealthy people in this country, but we don’t have so many that you need more than 150,000 agents to keep an eye on them. No, according to one recent study cited in the linked report, this move is being sought to generate more revenue for the federal government. And the vast majority of that new revenue will come from families earning less than $200K per year. In other words, the middle to upper-middle class. Trust us, the IRS already goes over Elon Musk’s taxes with one hundred fine-toothed combs.

But that’s how they will be getting more revenue. By examining working class people’s tax returns under a microscope, looking for even the slightest error and then slapping them with fines and late-payment charges. And if you don’t pay up quickly enough, the IRS now has more law enforcement officers than the FBI and over five million rounds of ammunition on hand. They’ll get their money.

So what does all of this have to do with “inflation reduction?” Don’t ask me. But the names of new laws in the country stopped meaning anything recognizable long ago, and most of them seem to actually mean the opposite of what the law is intended to do. The devil is always in the details.

In simple terms, double the IRS agents = double the audits.

And you already know the new, juiced-up IRS is going to be cracking down extra hard on people who contribute to the Wrong Political Causes.

These assholes in Washington just push and push and push. They squeeze Americans ever-tighter with each passing year.

It’s going to blow up at some point.

The idea of owning a home and being financially free is ingrained in the American character. People are not going to be thrilled at the fact that the ruling class has effectively canceled the American Dream.

I doubt people are going to take this lying down. Maybe it won’t blow up this year or next year or even in the next 5 years, but eventually the people will decide that they are sick and tired of being squeezed and squeezed and squeezed.

At this point, I’m essentially rooting for Russia and China because they are, after years of planning, making their move to dethrone the US dollar, and the US dollar is the source of our dickhead ruling class’ power.

If US dollars are no longer in high demand with foreigners–primarily Chinese investors–then much of the foreign money ruining our housing market disappears. And so, to a large extent, does our government’s ability to print money and deficit-spend to fund this massive expansion of the IRS–along with the whole Military Industrial Complex.

Now, don’t get me wrong, the collapse of the US dollar will be devastating for all Americans. But it will be even worse for the people at the top–because they’re the ones with the most to lose.

I hate that it has come to this, but I really don’t see any other way out of this than the collapse of the dollar. The dollar is the source of the ruling class’ power, and they are the most despicable people in the world. They’re the ones who allowed the American Dream to be killed–not only that, they profited from it and continue to profit from it to this day.

The Russian and Chinese governments didn’t do this to us. Our government did this to us.

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