You can thank the printing of money like there’s no tomorrow. Hopefully one day we will do a full report on Covid and the actions we took to fight Covid. Why did we print checks out to every American? Airline workers, restaurant workers, anyone directly affected, sure. But literally millions and millions of Americans had no pay cut or change in income, their job simply continued as work from home. They didn’t need the extra money, their income and job continued. And the first two bailouts, ok. The third round under Biden was absolute ridiculousness. Completely unnecessary.

Another huge problem is as people became work from home, they bailed on the big cities for cheaper states. But their employers NEVER adjusted their salaries to the new state locality! I know 3 families that left the Bay Area and LA and moved to MI and TX. They took their CA-level salaries and bought much cheaper (relatively speaking) houses (mansions) in those states. This absolutely sky rocketed prices. Even the small town my parents are in PA, people did bidding wars. Ridiculous!

My tenant in NJ stopped paying rent. I didn’t get rent for 6 months. I was down some serious money. Why? She had applied for rental assistance and because she knew there was an eviction moratorium. NJ pushed that out even longer than the federal deadline. Granted, she lost her job in 2020 but between stimulus, unemployment, and crazy hiring going on everywhere, one would think there shouldn’t be a problem? In the end, she got approved for 15 months free rent (from max 18). I got two checks from the state of NJ totaling 40 grand. Gee, I wish someone would my pay house free for 1.25 years!

This is all gonna bite us in the ass. So much money printed and thrown out like candy. The only reason the economy is doing fine is because people are spending money despite high inflation. Just watch, as soon as spending slows because people have had it with higher prices, we will stagnate the economy and have inflation sticking around due to various pressures in the entire system (including supply chain issues). Hello stagflation. Personally I think it’s inevitable and it’s coming.

There’s no easy fix for stagflation. IMO as interest rates come up and we have stagflation, I think housing will cool down a bit. Not drastic, and certainly nothing like the housing bubble bust around the GFC, but still think a nice cooling is coming up.