Americans have more money in their pockets than they ever have before. That sounds like really great news, but it isn’t, because the cost of living is rising much faster than our incomes are. In addition, much of the “new wealth” that has been created over the past couple of years has ended up in the hands of the very wealthy, and this has caused the gap between the rich and the poor to grow even wider. As for the middle class, it is being systematically hollowed out by “Bidenflation”, and that process is only going to accelerate during the early stages of 2022.
Used vehicle prices have been rising very aggressively as well. In fact, Jim Bianco says that they have been going up even faster than Bitcoin…
Used auto prices are rising faster than bitcoin and other assets, according to market researcher Jim Bianco.
“If you want to know what the best investment you probably had in 2021, it’s that car sitting in your driveway or in that garage,” the Bianco Research President told CNBC’s “Trading Nation” on Thursday. “It is appreciating faster than the stock market and lately faster than some cryptocurrencies.”
Isn’t that nuts?
Over the past four months alone, the price of used vehicles has increased more than 20 percent…
“In the last four months, they’ve gone up in price more than 20%. Not only is that more than the S&P, but over the last four months that’s more than bitcoin itself,” he said. “As of December 15, the latest set of data we’ve got, they’re just accelerating higher and higher right now. There’s no peak at least as of now.”
Home prices are going absolutely haywire as well.
In fact, CNN is reporting that at the end of the third quarter U.S. home prices were up almost 20 percent compared to the same time in 2020…
Homeowners saw average home prices skyrocket nearly 20% through the third quarter compared to a year ago, according to the Federal Housing Finance Agency. It was the largest annual home price increase in the history of the agency’s House Price Index. And, in some hot markets, the price increase was double that.
If your income hasn’t also gone up 20 percent over the past year, that means that you are falling behind.
Once upon a time, you could get a huge mansion for $500,000.
Today, half a million dollars will get you a 700 square foot shack.
And Zillow is projecting that home prices will soar even higher in 2022…
Over the next 12 months, Zillow foresees U.S. home prices rising 11% overall. While that would mark a slowdown from the 19.5% jump over the most recently measured 12-month window (between September 2020 and September 2021), the predicted price increase would still be a housing market that strongly favors sellers. For perspective, Fortune calculates the average rate of home price growth per year has been 4.6% since 1980.
The amount of money in our pockets is not what matters.