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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (56401)	3/21/2006 6:00:26 PM
From: TimbaBear	Read Replies (1) of 110194

Mish Had someone vying for my time so I didn't get to address the other doozy you threw at me, so here goes: We are talking a serious rise in standard of living. My dad had an 700 sq ft house (if that) and 4 of us were raised in that. One TINY bathroom. One simply can NOT say "a house is a house" or a "car is a car" and compare prices today vs 10 years ago. You can not say that inflation represents the cost of my house vs my dad's house. That is preposterous. That is also why one can not look at average or median home prices in the belief that "a house is a house". "A car is a car" is what I was trying to refute. You were the one (not me) that said "a car is a car .... and the rest is fluff". You seem to have an awful lot of confusion on how to measure inflation for one who is supposedly well-versed in economics. Even if you don't subscribe to the same school of thought you ought to be conversant enough to argue well without looking foolish. The correct comparison in this case is not your dad's house to my house or your house. The correct comparison is your dad's house now versus what he paid for it. I'm sure there is still a market for 700 SqFt houses, albeit a smaller market now then back then. The difference in market appeal is known as functional obsolescence but the Market would account for that without any brainiac trying to add hedonic "improvement" to the equation. "A car is a car" is what I was trying to refute. A new cheapest model Ford to a new cheapest model Ford is a "car is a car". Folks who buy the cheapest model are not willing to pay for the bells and whistles, but they can't help but get some whether they have any appeal or not. If you cannot grasp that concept, then I can see why you cling to some of your beliefs. Timba

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