This article was written by Brandon Smith and originally published at Birch Gold Group
America is in the midst of a stagflationary crisis; there’s no way around it. It doesn’t matter how much oil Joe Biden dumps on the market from the Strategic Reserves. It doesn’t matter how many jobs he is able to temporarily buy with the $8 trillion-plus covid stimulus package. It doesn’t matter how many times the mainstream media claims we are “in a recovery.” The fact is, the majority of Americans are being priced out of integral markets and the longer this goes on the deeper the hole is dug and the harder it will be for people to climb out.
That’s how most economic disasters work; the populace is not dropped into the pit automatically, the pit grows up around them over time. We have seen worse conditions in the US in the past, including the Great Depression and the stagflation crisis of the 1970s. The people who think conditions are bad now haven’t seen anything yet (interest rates eventually climbed to 20% in the early 1980s, crushing borrowers). That said, there is a growing potential for today’s crisis to BECOME the biggest financial crisis in our nation’s history given a little more time.
Part of this ongoing problem is the heavy inflation in housing prices, and make no mistake, this IS one of the biggest threats facing middle-class America right now, which in turn affects people under the poverty line. Rental prices on the average American home have climbed to $2047 per month – The average in 2019 was $1465. That’s a 30% increase in housing costs in the span of four years.
For apartments, the average cost today is $1372 per month, compared to $1078 per month in 2019. The rent-to-income ratio in the US is now estimated to be 40%; meaning, most Americans are paying up to 40% of their income just for housing. Anything over 30% is considered overburdened.
The average cost of a home was $313,000 in 2019. In 2023 that average rose to $431,000, far outside the annual income of the majority of Americans and pricing out over 67% of the population. As mortgage rates skyrocket and middle-class Americans are pushed out of home ownership, they then have to move into the rental market where the supply steadily declines and prices rise due to demand.
The problem is not just higher prices, this is merely a symptom. There’s also falling availability across the nation.
Rentals in many areas (outside of crime ridden metro neighborhoods) are awash in applications, so much so that a new scam has developed among some property owners requiring fees just to apply. These “screening fees” can climb into the hundreds of dollars for each applicant, and in most cases the applicant never sees that money again, even if they don’t get the rental. This is not to say there are no homes available anywhere; rather, availability is falling at a greater pace and new housing can’t keep up.
There are claims that this trend will soon reverse and that builders are set to flood the US with new properties, but I seriously doubt it given current conditions. There are multiple factors at play keeping housing in stagflationary limbo and one or more of them need to change dramatically.
So what can be done about this? I’ll rephrase the question – What solutions can be pursued that will have quick results rather than taking a decade or more with minimal benefits? The truth is, the solutions are simple, but they require actions that some people would consider “extreme” or contrary to their political aims.
Certain interests would do everything in their power to prevent such solutions from being achieved and that’s the ultimate obstacle. It’s not only that there are numerous instabilities within the economy, the greatest obstacles are the political groups and corporate cabals that will try to stop basic reforms from happening to alleviate the crisis.
These solutions would have to be enforced at the state level, because there’s NO WAY under the current federal regime that such measures would aver be allowed nationally. Step one is the most important and will probably get the most angry opposition…
Step 1: Deport All Non-Citizens In The US
Gen Z activists often argue that they have inherited the most unfair financial conditions in history, including exploding home costs. This is simply not true, of course. The Depression era and the stagflation disaster of the 1970s were far worse than conditions today. Can the current situation become a calamity? Oh yes. But Zennials are already panicking and we haven’t even gotten to the hard part yet.
While younger Americans blame “boomers” for their fate, it should be noted that Gen Z often supports policies which are destroying their own future prospects. For example, a majority of Gen Z defends open border policies and amnesty for illegal immigrants. Yet, it is this trend that is helping to drive up the very housing costs younger Americans complain about. If they want affordable housing, they will have to let go of some of their more childish fantasies about America as a “multicultural melting pot” open to everyone.
No refugees. No Asylum. No three year wait on court proceedings while they live off the system and take up housing space. If they didn’t migrate here through the proper legal channels they should be removed from the country and immediately shipped back to their nation of origin.
If you want to know why rental housing in particular has skyrocketed in the past couple years, it’s not only because of inflation in the money supply. There have been more than 2.8 million illegal migrant encounters at the southern US border in 2023 alone. At least 1.5 million of those migrants have been allowed to enter the US by the Biden Administration under asylum rules, and the rate of illegal crossings is only increasing with each passing year.
There is an estimated 16.8 million illegal immigrants residing in the US as of 2023, though the real numbers could be much higher. To put this in perspective, only 3 million Gen Z Americans have turned 18 since the year 2000 with the possibility of needing housing in the near future. Removing illegal immigrants (who are not supposed to be here in the first place) would greatly ease the housing market and leave ample excess rentals for young Americans. The increased supply would quickly bring down rent prices and perhaps even home purchase prices.
The most common argument against this kind of measure would be the assertion that America “needs” migrants to help with labor shortages. I would point out that labor shortages are a fleeting aspect of the trillions in covid helicopter money dumped into the system in the span of a single year. And, as the effects of this fiat money fizzle, the jobs market will plummet.
America is taking on a population explosion that it cannot compensate for while acting as a steam valve for foreign governments to pawn off their problems. You want to know why housing prices are exploding? In part because of foreigners sapping the supply.
Fixing the problem at the state level would require stepping on the toes of the federal government and enacting immigration enforcement within state borders. Greg Abbot, the governor of Texas, is partially doing this by busing migrants out of Texas to Democrat sanctuary cities. The crisis will not be fully averted until illegal migrants are bused out of the US entirely, but booting them out of red states would help and blue states would probably be forced to follow suit as they suffer under their own foolish sanctuary policies.
Step 2: Stop Foreign Purchases Of US Properties And Land
This is an action that some state governments are already pursuing. More so in the case of preventing the Chinese government and their corporate partners from buying up property, but this should apply to ALL foreign buyers. Roughly 40 million acres of US agricultural land is owned by foreign companies, and foreign buyers purchased over 84,900 homes in the US just in the past year. High interest rates are slowing these purchases, but not enough.
States can and should make it illegal for foreign interests to buy property within their borders. I would suggest a moratorium passed on foreign buyers for at least a decade, if not longer. I don’t think many in the public realize how open our property markets are to foreigners. In times of prosperity this might not matter to some people, but in times of inflationary crisis the rules need to be changed to favor American citizens first.
Step 3: Moratorium On Corporate Home Buying
According to data compiled by PEW Trust almost one quarter of all homes in the US in 2022 were owned by corporations, many of them disguising themselves as smaller investment groups. That’s 25% of the US housing market controlled by a handful of corporations who can leverage that housing supply into much higher rents for the entire nation.
Keep in mind, this is similar to what happened during the Great Depression when major banks bought up distressed mortgages on the cheap as owners struggled to stay above water. In the end banks were snatching up homes for pennies on the dollar.
It’s unlikely that the current federal government would ever place restrictions on these companies, but state governments might, given the level of homelessness that is about to hit their economies in the next few years.
Again, if the primary danger in US housing is lack of supply driving up prices, then we must create more supply to make housing affordable again. We can’t compel the market to build more houses for cheaper, and we can’t compel home builders to take a loss. But, what we can do is free up the existing supply and take it out of the hands of people who are not Americans and restrict those groups who are attempting to corner the market.
The Federal Reserve’s plan (at least the plan they openly admit to) is completely different – They are seeking to crash the economy and cause untold financial harm in order to drive inflation back down. Sure, prices will fall when the majority of people are broke, but that’s not a solution. Who’s going to be in a position to buy after a historic bubble implosion (other than the banks)? As the saying goes, in this case the treatment is deadlier than the disease.
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Brandon, great article with great proposed easy to understand and easy to implement solutions, which hopefully people push for.
“Part of this ongoing problem is the heavy inflation in housing prices… this IS one of the biggest threats facing middle-class America right now…”
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Two reasons for this. First, ‘The Money’ has no value any more… now worth about 2 cents out of what was once a Dollar. And second, pure and simple greed to squeeze every drop of profit out of a place to sleep and maybe sweep the sidewalk.
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And both of these will remain problems because The Money is deflating down to its intrinsic value (of any fiat currency) which Is ZERO. Worth nothing. And human greed is not going away any time soon.
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“Step 1: Deport All Non-Citizens In The US”
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More likely? They will deport all US CITIZENS first. We the People have no standing in this Nation.
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“Step 2: Stop Foreign Purchases Of US Properties And Land”
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If Washington DC is fully owned by lobbyists and special interests (many of these being Foreign interests)… it only follows that American Land would be sold off to those with no loyalty to America. First, buy the politician. Then, buy the land.
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“Step 3: Moratorium On Corporate Home Buying”
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Since the Government is essentially Corporate-owned… it’s not likely that Corporations will stop Themselves from buying homes or from doing anything else they damn well please.
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In truth, all Three of these ideas put forth in the article are sound and sensible. But that is why they have no chance right now. Because this Age of ours simply does not do sound and sensible.
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What we DO ‘do’ is… let anybody who wants to come into the country just barge right in (and expect nice benefits!). And we let foreigners with no loyalty to America just buy up the place. And we let Corporations do whatever the hell they want.
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Really… the first thing we need before we do anything else is to bring some SANITY back to this Planet. For without that… nothing else is going to mean anything, anyway.
This is why I noted in the article that ALL of these measures would have to be implemented at the state level, not the federal level. The federal government would NEVER support any of these solutions, and changing that government is proving to be impossible. However, we have seen a willingness within red states to fight the good fight, including fighting against the covid mandates. So, we can’t save the blue states, but we might be able to save the red states.
Brandon: “… ALL of these measures would have to be implemented at the state level, not the federal level… we have seen a willingness within red states to fight the good fight… we can’t save the blue states, but we might be able to save the red states.”
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What this means is that our Nation would be returning to the ‘Power Is In The States’ model of Government that the Founders intended. The Federal Government was intended to be the weaker partner to The State(s). And since we have been failed by the wrongful accumulation of power into the wrong hands… the road to salvation does have to be through The Individual States.
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Damn clever those Founders were. Too bad nobody (after the Civil War) wanted to follow their lead.
While it certainly should be returned to the states, we have willingly given over much of that authority to the federal fascists with our passivity over the years. They can and will pretty easily lawfare any attempt at doing so.
At this stage I very seriously doubt they will give their power back to the states peacefully
Kaleidoscoper: “While it certainly should be returned to the states, we have willingly given over much of that authority to the federal fascists with our passivity over the years.”
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This power accummulation was seized by the Feds in mostly smaller-sized bits over time (except for the Civil War when LOTS of power was seized in one great big bite). The Feds have learned that this is the most effective way to gain power (and get the least amount of resistance from The People). The Plandemic is another example of a great deal of power that was seized in a larger bite (along with the passage of the Patriot (?!) Act).
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“At this stage I very seriously doubt they will give their power back to the states peacefully.”
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Empires never give power back, ever. Empires only lose power when they collapse of their own accord.
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But the Founders had the balance of power idea right. And they also knew how easily that balance could be shaken and ruined.
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The Founders would probably not be surprised how things have turned out to Their America. But they would also be deeply saddened. This is not the America they intended or hoped for.
With regards to step 1, go after the hirers. No job, no handouts, no stay.
As for step 2, that much farmland in foreign hands, is worrisome. They could manufacture a ‘famine.’ And for the last step, I’d love to see governors stand up to them corporations, and voters anon recall, those who don’t. Perhaps it’s time we the folk, draft up the bills needed, for the governors to sign.
Like Kristie Noem, governor of South Dakota, has and continues to work for legislation for no foreign land owners, along with 14 other states. She was on a station a few weeks ago talking about it, I’m not sure where it stands… but it’s a start.
Brandon does offer a solution for the housing problem. There is no chance that it will be implemented. Everything will get a lot worse instead. It has amazed me for several decades now that the leftist government has been able to brainwash people so successfully that they agitate for more of what will destroy them. By that I mean most people, not everyone. I have had difficulty understanding why the elite want to destroy this country that gave them what they have but Brandon explains it quite well, they are sociopaths. They will even destroy themselves just to have another power trip.
Thank you! The solution is this easy. Why do people have so much trouble accepting the laws of supply and demand?
If it were up to me, I’d start with deporting Ilhan Omar back to Somalia.
Brandon, The U.S. needs to limit the tax deductions of mortgage interest and property taxes to ONE primary residence per taxpayer.
Brandon, I have some concern regarding corporations in general.
What is a corporation? A bunch of shareholders, which can be people, and it is ok, but other corporations can also be shareholders and so on. Until the people who really own and thus control everything completely shroud themselves in secrecy, away from any accountability.
I realise this is a very delicate.
But what if we really find the way of identifying the real ownership down to each individual shareholder?
What do you think?
Is this worth considering, at least theoretically?
Great article. However, the one big thing missing from this is that it’s all part of their Globalist plan. The WEF is clear in that they want us to own nothing and like it! How else can they control an otherwise free people??? For this reason, I don’t see anything changing…even at the state level because clearly many of our local officials are just as corrupt as our federal ones!
No, it’s not missing – It’s just not relevant. The motives for corporate buyouts of housing or open borders do not matter to the solutions, and this article is about solutions. And whenever I talk about solutions, there’s also always someone who argue that no solution is possible because the globalists are somehow everywhere and control everything. If that were true then the red states would have enforced vaccine passports and mandates forever. instead, they fought back against those mandates. I explained this already in the essay above. The globalists don’t run everything. They are a paper tiger and gain their power from nihilists who say “nothing can be changed.”
This is not only a US problem its all over the western world, its all by design to crush the western way of living. We have the same problem in Australia, we have way to much immigration, no rental housing stock, prices of property and rentals through the roof, failing infrastructure that cant keep up, people and families living in cars with small children.
you are quite right when you say “get rid of the illegals ” I will go a step further ” stop all immigration” but in our case if the government stops that our country will crash and burn,as the immigrants bring in much needed money, its a vicious circle that needs to be broken, I say let the economy crash and burn and reset everything sure people are going to suffer , but the sooner this happens the sooner the suffering stops, all we are doing is kicking the can down the road. Our government has committed itself to protect the property bubble which is unsustainable and needs to be pricked.
We have the exact same problems (and same causes) here in France, where the same solutions will never be implemented either….