Home improvement is real investment. It creates an asset (the pretty rec room and kitchen) that is expected to provide value for someone in the future. The problem is that it’s even more grossly overvalued than the house. So they overpay for it. They might expend $200k of factors of production to produce improvements that are really only worth $20k as a stream of imputed revenue.

Some dodgy arithmetic here. So we’re ignoring the interest payments, but the seller of the house on the left ends up buying a $100K house for $60K. He should be moving to Costa Rica with only $900K. You’ve knocked his $20K equity off the cost of the house at the start - that makes sense. Then you’ve taken $20K off the mortgage before settling it AND then given him the 20$ back as well. He’s $40K up on the deal.

No. Those with capital can increase their wealth using the labor of others. This increases the burden on the poor, while rewarding the wealthy simply for being rich.
Socialism guarantees a minimum standard of living. Because the poor spend all their income there is little net cost, yet it stabilises the economy as then there are more consumers spending.
Conservatism aims to erode this mechanism for short term gain. Resulting in a crash when the base of the pyramid can not pass up more wealth.

basically money is just an idea. the market value of a house at any particular point in time is a sentiment for that particular asset. sentiments vary as people look to other outside indicators ie: stock market, geopolitical issues, environmental issues even, etc…yes there is no ‘wealth’ now, but time was the main factor. the wealth was not ‘illusionary’, rather, that’s not the best word for it….since if you sold at the right time, wealth would be present.

Capitalism is about each person wanting to keep his own money. Let’s call that greed, to concede your point. Socialism is about wanting to take someone else’s money. That too is greed, but it has another element: theft. We all are greedy, certainly you are. You want more money, and if I ask you for $5, you will say no because it’s yours (your capitalist greed at work). Under socialist greed, I could take your money by force. Now which is better?

The problem is when the link between loan and average income is lost. But its not lost money, its money that was always an illusion, it never existed as value. I have done it but I bought 1972 (UK). Now house is worth 36 times what it was then. Along the way there was 16 percent Inflation which helped lots. Really houses are to live in, not speculative investment. Houses DID go down in values in the 1930s.

thanks for your vids. get me keeping up with some important and useful theory. cheers

THANKS A LOT- IT WAS GREAT!

great video
thanks a lot

a real free market ? lol

we have nothing but trouble by the free market system.

Because you have only one thing that you must understand my friend, the whole economic drives on greed, and fear.
Thats the only two.

Greed, because its never enough, and fear of losing what they have.

Thats all, and thats why it all is doomed to fail. From the beginning of.

I call it the origin of sin human element.

Thanks Sal! Now it’s time to watch the vice-presidential comedy show. Where’s my popcorn?!

They love it because they get less competition. Hell, just look at how much American car companies have bitched and moaned for import quotas.

Corporatism LOVES Socialism!

The world needs confidence in the US $ Dollar NOT more hyperinflation & US Debt! We need LESS US Central Planning, MORE oversight and a REAL free market.

Printing MORE fiat US $Dollars to encourage more Wall Street greed will debase the currency, end confidence in the $Dollar and cause a MUCH larger collapse later!

Real Estate AND the stock market MUST be allowed to return to their TRUE value NOW before the problem grows any larger!

Bailout? HELL NO!!

Very good video, thanks!