Speculating on real estate is an investment, which is perfectly reasonable. If the government issues a hard rule forbidding buying and selling, it would certainly be unconstitutional. However, in the United States, it is well known that there are two things that cannot be speculated on: real estate and food. The U.S. government believes that these two are the most important means to ensure the livelihood of the people. If the prices of food and housing soar, it will lead to social unrest. So, on what basis does the U.S. government control housing prices and restrict speculation? It is well known that all land in the U.S. is privately owned; the government does not sell land, which avoids the conflict of interest of being both referee and player. This makes it easier for the government to use the most effective adjustment method: taxation! You can buy and sell houses according to the constitution, but I can also tax you according to the constitution, making it impossible for you to make money buying and selling houses: if you invest in a house or if no one lives in it, you have to pay management fees and property taxes, which can be at least 1%. Every year, for example, my property tax alone is close to $50,000, which is truly unaffordable if you do not live there. Therefore, speculators find that they hardly make any money after buying and selling. The U.S. government manages this through taxation to stabilize housing prices to the greatest extent possible; the reasoning is simple and straightforward, not complicated at all.
Regarding the stability of housing prices in the U.S., please see the attached image. The famous economist Robert Shiller from Yale University created a graph showing the changes in U.S. housing prices over the past century, which clearly illustrates the trends in U.S. real estate prices over the past 100 years. This curve was published in an article in the 2006 issue of “Economists’ Voice.” The author used real housing prices in the U.S. from 1890 to 2005, and after adjusting for inflation, found that over the past century, U.S. housing prices have not actually had an upward trend, especially between 1890 and 1990, where there was almost no change, with an average annual growth of only 0.2%. The effective real estate operational system and tax system of the U.S. have kept the housing price to average salary ratio around 3 in most areas. In contrast, many cities in China currently have a “housing price to income ratio” of 28 or higher, ranking among the highest in the world. Comparatively, Hong Kong, which we often consider to have very high housing prices, has a “price-to-income ratio” of only 15.6, while very expensive New York and London range between 10 and 12, and Tokyo in Japan is only 8. Wang Jianlin, who made his fortune in real estate, recently told the American media that China’s high housing prices can be described as a huge bubble, and he is not wrong.
As bubbles have a day of bursting, see the attached image. Between 1997 and 2005, U.S. real estate prices experienced a rapid increase of up to 71%. However, this abnormal surge was precisely a precursor to the bursting of the real estate bubble in the U.S. Shiller predicted in 2006 that the real estate bubble was about to burst, and everything that happened later proved him right; the subprime mortgage crisis triggered the bursting of the real estate bubble. Ten years later, the prices of U.S. real estate have returned to the average level of the curve. From another perspective, it is not an exaggeration to say that the subprime crisis saved the U.S. economy, but the question is, who will fire the first shot to burst this bubble?
The world’s most Nobel Prize-winning economists live in the U.S. Americans are not foolish in playing the economy; they know that concentrating resources and funds in high-tech and manufacturing is the best for the U.S. economy. Real estate is a low-level industry with no technological content and no international competitiveness, but it is a livelihood industry. If not controlled well, it can easily lead to speculation and a nationwide real estate speculation frenzy, which not only triggers inflation, disrupts people’s livelihoods, but also damages the economy. The U.S. forces funds to enter high-tech and manufacturing by restricting the influx of funds and resources into the real estate sector, enhancing the international competitiveness of the U.S. economy, and relying on the real economy to save America. During the 2008 economic crisis, China’s 4 trillion yuan stimulus was intentionally aimed at stimulating real estate. Everyone was involved in real estate, while no one mentioned manufacturing. The tax system has made it very difficult for real industries to operate. When China’s GDP surpassed Japan, becoming the world’s second largest economy, it was hard to name a product with international market competitiveness or a company with international competitiveness. However, this has given rise to the most real estate tycoons in the world. Among the top ten richest people in China, almost none are not involved in real estate. In contrast, the well-known American real estate mogul Trump does not even rank high on the American rich list, with a net worth of less than $5 billion, which is far behind Bill Gates, who is engaged in real industry. China’s economy can only completely release risks by breaking out of the vicious cycle of soaring real estate bubbles.
(Source: Sina Weibo @美国-Kevin律师)
Raspberry Pi Model 3 B with onboard wifi and Bluetooth, priced at 195 yuan on Taobao.
It’s quite fun and much cheaper than buying a house; you can buy one to play with.
Raspberry Pi is a single-board computer developed to encourage and assist in the teaching of programming and computing. It is also an excellent starting point for developing Internet of Things (IoT) projects. The low cost and “plug and play” features have spawned boards that are accessible to everything and have various connectivity options. The Pi is a perfect experimental tool, whether you want to use it as a desktop computer, media center, server, or monitoring/security device in your home. Everything is achievable. A Linux-based operating system runs on the Pi, allowing access to a wealth of free software and downloadable files.
Features and advantages of Pi 3
• Broadcom BCM2837 chipset, running at 1.2 GHz
• 64-bit quad-core ARM Cortex-A53
• 802.11 b/g/n wireless LAN
• Bluetooth 4.1 (classic and low energy)
• Dual-core Videocore IV® multimedia coprocessor
• 1 GB LPDDR2 memory
• Supports all the latest ARM GNU/Linux distributions and Windows 10 IoT
• MicroUSB connector for 2.5 A power supply
• 1 x 10/100 Ethernet port
• 1 x HDMI video/audio connector
• 1 x RCA video/audio connector
• 1 x CSI camera connector
• 4 x USB 2.0 ports
• 40 GPIO pins
• Chip antenna
• DSI display connector
• microSD card slot
• Dimensions: 85 x 56 x 17 mm
If you find Raspberry Pi difficult, consider this one: Arduino UNO R3, priced at 15-26 yuan on Taobao.
