Money, Stocks and Homes
UK vs. US
I was reading a piece at UnHerd on the end of the Conservative Party in Britain, because the yoof is being screwed on house prices and everything else. Since I’d done a bit of analysis on the US with respect to money, stocks, and real estate over at American Thinker I thought I’d check what the Brit situation was.
Briefly, in Britland,
Money supply M4 in 2022 is 7.0 times the level in 1990.
The FTSE 100 in 2022 is 3.2 times the level in 1990.
Home prices are 5.2 times what they were in 1990.
Whereas in the US,
Money supply M2 in 2022 is 7.9 times the level in 1987
The S&P 500 is 18 times the level in 1987
Home prices are 4.4 times the level in 1987.
These are all raw numbers, with no adjustment for inflation.
You know, that is quite interesting. The FTSE only up 3 times? When the S&P was up 18 times? (Well, only 15 times after the recent crash). Looking the chart the FTSE has gone sideways ever since about 2000.
But you can see that our home prices are up half the amount of the money supply whereas the Brit home prices are up almost as much as the money supply.
There is a simple reason for the difference in home prices. The Brits are carefully taught that there isn’t room on their poor little island for more houses. So they don’t build ‘em. But just between you and me, there is lots of room. If you drive from London to Brighton you see lots of green fields and the occasional mansion. And if you are caught circling in your 747 waiting to land in London Heathrow of a morning you see nothing but Britain’s green and pleasant land as far as the eye can see. One “tell” is that it is awfully difficult to see any houses outside of London from the air. There have been so few houses built that all the existing houses are covered by trees that have clearly had a decade or three to grow up and hide the houses.
I get that all those mansions need to be properly surrounded by countryside as though it was 1805 in a Jane Austen novel. There have to be standards on these things.
But the Brits really, really believe that they are running out of room for houses.
I am really shocked about the difference in stock prices. The S&P up 18 times and the FTSE up only 3? Whatabout the NASDAQ? Wow! Up 42 times since 1987.
As a refugee from Britland I guess I won’t be singing
Oh to be in England
Now that spring is here
any time soon.
And even though I am mad as hell that my IRAs are all in the toilet and blame Biden for everything and I am really skeered about the oncoming Biden recession, I still see that life ain’t so bad in the good old US&A. Certainly not as bad as in Britland. Maybe the Brits are spending all their money on solar and wind farms.
No wonder the Brit yoof are all upset. Pity that they don’t have a clue about anything.