There are very very few homes being built in Palo Alto right now.

Elizabeth Warren addresses this trend in a paper showing most homes' square footage went up to add a second bathroom in comparison to the middle of the century. The cost of labor to add a bathroom and the raw cost of the materials in relation to that low cost house is probably also not worth it either because if we're talking $40k houses I would heavily bet that the property is in an area with no non-minimum wage jobs within reasonable commute distance nor retirees that need income.

A 1200sq ft 3 bed 1 bath ranch in Palo Alto today costs about $1.8 million, they're all over zillow and sell quick too.

> You can drive through old neighborhoods near me with 1000 sq ft houses that sell for $40k because nobody wants a house that small.

How closely have you looked at those $40K houses? I've seen a handful of sub-$100K smaller houses listed in my region, but they're wrecks; they'd need a massive amount of work to get anywhere near the comfort and safety level of a modern, well-maintained house. They're basically the house equivalent of buying a $500 car.

> You can drive through old neighborhoods near me with 1000 sq ft houses that sell for $40k because nobody wants a house that small.

Sure, but a $40k house will need anywhere from $90k to $160k worth of additional repairs to be safe to inhabit.

And since that cost isn't in the equity, most people in most areas can't qualify to finance that. (A $200k mortgage is not identical to a $40k mortgage and $160k reno loan).

Assuming the lots are the same size, which they generally are in many areas (lots are resold), a 60% increase in house should be ~60% increase in price, not 4x or 10x.

> 1000 sq ft houses that sell for $40k > because nobody wants a house that small

a 1000sqft house in Palo Alto would sell for >$400K just for the land. It would be a "teardowns", and a $40 house+lot would be converted to a $300k 2600 sqft houses -- quite reasonable, so the explanation lies elsewhere (access to employment, entertainment, educations?)

I'm curious about what you're saying, but I'm a little confused by your terminology. Are you using "debased" here to refer to inflation? And could you elaborate on Thiel's definition of "secrets" and what exactly the "secret" here is?

> My hypothesis is that people without significant real assets are all worse off since the money supply has been debased.

"Debased" in this context doesn't make any sense; it really only makes sense in commodity or representational currencies, not fiat money.

If you mean "devalued", then you really should say that.

But I'm not sure how the logic works, anyway, unless you assume that those without "real" assets also tend to have a constant and positive wealth of fiat currency, such that decline in fiat currency value has the same effect on their net wealth.

I really think there is, at most, a coincidence or possibly common cause here rather than the causal link you suggeset, which I don't see any clear rationale or evidence for.

Whenever you have inflation, it's always good to have assets, either real property (they're not making more land) or durable goods.

The Federal Reserve would agree with part of your thesis, as zero interest rates and quantitative easing has caused significant asset inflation and those who are not asset holders have not benefited at all. Instead, many are now priced out of real estate, and have to pay high P/E valuations for stocks. Much higher risk to participate now.

So what are the viable options for those of us without significant assets? This is a real issue for me at this stage as even though I am a relatively high income earner I have been completely priced out of the real estate market. Rent takes up most of my salary making saving up for a decent deposit really dificult (I live in Australia).