If you’ve never been to Asheville, North Carolina, but you’ve heard of it, I’m not sure I’d recommend going out of your way. It overpromises and under-delivers, in my opinion.

To be sure, Asheville isn’t going to land on any “must-visit” lists for global travelers, and it isn’t especially likely to attract any modern day Clark Griswolds subjecting their families to torturous cross-country road trips either. But it does have a dedicated cult following, and if you spend any time living anywhere near it, somebody will tell you to go check it out.

I’ve become somewhat disenchanted recently with the notion of actually moving myself permanently from the island exile that’s been part and parcel of this platform’s lore for the entirety of its existence. You can only hear “Why would you leave there?” or, worse, “Why would you leave there to come here?” so many times from buyer’s agents in other locales before you start to question the wisdom of your own latent bad decision.

Instead, I’m leaning more in the direction of a second property where I can go to escape hurricanes or just to enjoy some different scenery now and again. Inquires to that effect landed me recently on some condos in downtown Asheville. As noted, I don’t love the place, but some of the downtown renovations are profoundly charming, and in addition to being relatively insulated from any prospective housing downturn by virtue of idiosyncratic local dynamics (I’ll spare you the details), they look cheap on an absolute basis.

As sometimes happens when I venture out into the “real” world either literally or figuratively (e.g., via FaceTime property walkthroughs), I’m struck by what the situation “out there” probably looks and feels like to regular people.

As a quick aside, I should emphasize (because I’m sure this sometimes gets lost), I’m no Steve Mnuchin. I’m fortunate in almost all respects, not least of which is that +/- 20%, 30% or even 100% in the cost of groceries, cars, clothes and so on, is completely immaterial to me. But everything isn’t immaterial to me like it is for our Mnuchins, to say nothing of our Ken Griffins. If I tried to go play Monopoly in The Hamptons, or really even in the nicer parts of Connecticut, I’d be laughed out of the area code, and that’s assuming they let me in there to talk to anyone in the first place.

I don’t claim to be a “regular” person (in some ways I’m entirely irregular), but I’m a lot more regular than a Mnuchin. I’m not so detached that I’d call your stimulus check “bridge liquidity,” for example, and if I had a wife, I wouldn’t take a picture with her holding up a sheet of freshly-minted dollar bills with my signature on them.

All of that to say that I am capable of tuning myself in to the real world, and as most regular readers will attest, I’m often dismayed at what I see and hear when I do.

Such was the case when I was perusing downtown condo listings in Asheville over the weekend. Apparently, the market is “cooling,” according to an agent who was generous enough with his time to entertain my eccentricity on a holiday. And, indeed, the oblivious side of me saw a lot to like. Later, though, as I was mindlessly scrolling through listings, I thought about the price per square foot, and what it would mean for a couple of cohabitating late-twentysomethings. Long story short, $900,000 for a respectable two-bedroom, two-bath condo in a very small city probably seems egregious to young newlyweds.

I laughed to myself, then I thought back to a quote from Rabobank’s Michael Every which I included in the latest weekly+. Last year, Every went to considerable lengths to explain why Zoltan Pozsar’s “Bretton Woods 3” thesis was implausible. He never used Zoltan’s name, but he made no secret about whose work he was critiquing. In a note dated April 4, Every reiterated the point, but then, the next day, he noted that a return to (or persisting in) “Bretton Woods 2” isn’t viable either.

One of the things Every mentioned in his April 5 note was that homebuyers (and not just Americans, by the way) are now staring down the prospect of two-generation mortgages. I don’t deal regularly in mortgage math, so I can’t run the numbers off the top of my head for random locales, and even if I could, I’d have to make arbitrary assumptions about what some hypothetical young couple shows for adjusted gross income and then more assumptions about what’s on their credit report, and so on, but just generally speaking, to make something that’s $900,000 affordable for everyday people, it needs to be financed over a very long period of time, at a very low rate and ideally both. Whatever that something is needs to appreciate pretty much in perpetuity to make it a good deal. But if perpetual appreciation is what’s required to keep last year’s borrowers above water, that means next year’s borrowers will have to take on more debt to buy into the market, and so on.

Wage growth isn’t going to keep up with that dynamic, which is suggestive of cartoonishly long repayment plans or else the gradual monopolization of the housing market by people (and private equity firms) who can afford to play Monopoly.

It’s with that in mind that I wanted to highlight a longer excerpt from the above-mentioned note from Rabo’s Every, which itself quotes a Financial Times piece previewing a forthcoming book by Brett Christophers. I think readers will appreciate the following, at least to the extent it’s indicative of Every’s penchant for pointed commentary:

If you believe in BW2, you believe banks, shadow banks, and mortgage loans can all keep growing as a % of GDP indefinitely. We saw how that ended for mortgages last time, and more broadly, as the Financial Times noted Tuesday, “We’ve moved from financialized capitalism to something more insidious — an asset manager society in which the titans of finance own essential physical systems and frameworks — the homes in which we live, the buildings where we work, the power systems that light our cities and the hospices in which we die.”

Indeed, the logic of yet higher asset prices, implying eventual two-generation mortgages for those who can afford property at all, and lifetime student loans, sounds like neo-feudalism — diverse and inclusive for the asset managers, perhaps, but hardly equal for all.

If BW2 means no ability to fight inflation “because assets,” and leads to feudalism, alongside a US murder rate approaching that of medieval Europe and a mortality rate trending the same way, as a former president arraigned for a felony for what is usually a misdemeanor, it’s not an easy sell globally.

BW3 might be easier to sell, but it won’t work without the US and the West. That leaves us all in the Deep Dark Woods, with the West and East both pushing for a new status quo.

In 2023’s new Cold War, the US working class can’t be disciplined more and still work. However, promises of ‘Fed puts’ for Wall Street could be broken to help repeat the soaking up of global capital and drying up of lending to the Eastern bloc [that occurred under Reagan]. Of course, such a ‘Volcker 2.0’ means more pain for some — but, proportionately, not the working class this time.