Do you want to see a very clean example of how much distortion the government has brought into the markets? This will hit you over the head like a two by four: let’s talk about lumber.
Here is a chart of the price of lumber in the mid-1980s. Sure, it looks volatile, but it isn’t. It hangs around $185, plus or minus about $15. In other words, even over a period of years, it goes up or down about 8%.
Now let’s examine lumber in the post-Covid, post-GFC, Everything Bubble era. The exact same lumber is about $1,000, plus or minus $600. In other words, instead of up/down 8%, it is up/down 60%. It has swooped from about $400 to $1700 and then down and up and then back down again. Insane. Can you imagine how many knock-off effects this has had in, for instance, housing?
As always, if you want to screw ANYTHING up, just get the government – ANY government – involved. It wasn’t that long ago that the meme below made sense. Not anymore.
