The Zero Interest Rate Policy (ZIRP) implemented by central banks during COVID continues to provide real world examples of the Austrian Business Cycle Theory (ACDT). Murray Rothbard wrote, “… the artificial holding down of the bank loan rate below the profit rate will stimulate an excessive borrowing, artificially high levels of investment, and a continuing monetary and price inflation.”

In Las Vegas the vacancy rate for industrial buildings reached 9.5% in the first quarter despite there being positive absorption. “Coming out of (those years) we basically delivered twice as much (space) as we would deliver in any year,” Garrett Toft, a vice chairman for CBRE in Las Vegas, told the Las Vegas Review Journal. “And it all kind of came (online) right at the same time …. So you have all this supply coming online and then demand slows down and we went from absorbing around 10 million square feet of space a year to last year in 2024, we only absorbed 3.2 million square feet of space.”

Compared to the current nearly double-digit vacancy rate, “Vacancy rates within the industrial space actually hit a record low (0.9 percent) in the second quarter of 2022 during the pandemic, according to the CBRE report, due to high demand for warehouse and distribution space,” Patrick Blennerhassett writes for the LVRJ.

CBRE reports that the construction pipeline for industrial space is currently 7.7 million square feet, decreasing from a high water mark set in the third quarter of 2023 (20 million square feet). “The valley’s industrial market has also seen a record-breaking influx of more than 46 million square feet of new projects, and at the end of the first quarter approximately 25 percent of this recently delivered space remained unoccupied.”

The result is a tenants’ market, writes Blennerhassett. “The market has shifted to be more tenant-friendly, with landlords becoming more flexible and competitive to secure deals,” read the [CBRE] report. “This could influence the types of sales and leases being negotiated. A rising overall vacancy rate and increase in available space may lead to a more competitive pricing and opportunities for buyers as well.”

Rothbard explained,

expansion of bank money causes an artificial lowering of the rate of interest, and an artificial and uneconomic overinvestment in capital goods: machinery, plant, industrial raw materials, construction projects. As long as the inflationary expansion of money and bank credit continues, the unsoundness of this process is masked, and the economy can ride on the well-known euphoria of the boom; but when the bank credit expansion finally stops, and stop it must if we are to avoid a runaway inflation, then the day of reckoning will have arrived.

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Of course, there are economics at work. The Canadian dollar (affectionately called the Loonie) has hit a 22-year low versus the U.S. dollar, “making it more expensive for Canadians to pay HOA fees, insurance and property taxes in the U.S. On the flip side, selling their homes in U.S. dollars was more of a boon, especially since property values in popular winter escapes have risen significantly.”

Brokers say it’s politics that are pushing out Canadians.

Realtor Catherine Spino “received an email from a Canadian citizen who she was helping look for a second home in South Florida in the million-dollar range. He wrote: ‘I was seriously looking to buy a condo but now how he’s treating our beloved country Canada — I have decided to abandon the plans for now… Why would I spend my money here?’”

Canadians once were nearly a quarter of the foreign buyers market. Now, attorney David Altro says his firm, which assists with cross-border finance, is receiving 20-30 calls a week from Canadians looking to sell.

“We want to be here, but we’ve decided we are not going to be here,” said Garry Liboiron, a 76-year-old Canadian who owns a real-estate firm in Cobourg, Ontario. He put his five-bedroom, 3,300-square-foot house with a pool and a big backyard southeast of Phoenix on the market for $599,000 in March. “He knows it’s unlikely, but in the back of his mind he worries the U.S. government may go so far as to nationalize Canadian-owned properties,” writes Nathalie Mancuso and Alexio Musleh.

“It’s getting scary,” Liboiron says. “Who knows what they’ll do.”

 Clifford and Paulette Lawrick left Arizona after more than a decade of owning a second home in Chandler, about 22 miles southeast of Phoenix.  Paulette “says she found herself getting really angry when people they knew joked about their country becoming a U.S. state. She was on the social committee at the condo complex but found she didn’t want to go to the Friday evening events anymore.” The Lawricks sold their 1,000 sf condo for $350,000 in a week and drove back to Calgary.

Canadians own almost 20,000 residential properties in Arizona, more than 90% of the properties owned by foreigners in the state. “Canadians made up 17% of the number of residential purchases by foreigners in Florida in 2024, the most of any foreign buyers, according to Florida Realtors, a trade association.”

Philippe Trudeau, a business owner from Montreal, was speaking French when a stranger asked him, “What are you doing here?” “When he explained he had owned a home in Pompano Beach, Fla., since 2018, the man didn’t back off, Trudeau says. ‘He told me to go back home,’ says Trudeau. “He said, ‘We don’t need you here.’”

After one day on the market, his two-bedroom, two-bathroom, 1,200-square-foot condo sold for $280,000. “I wanted just to get out of there,” he says.

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Donald Trump’s plan to liberate America from globalization requires high tariff walls that will usher in a golden age of plentiful manufacturing jobs and widespread prosperity as industrial production blossoms across the U.S. He claims the Chinese, the European Union, and other trade partners’  predatory trade practices have stolen American jobs and industries which rightfully belong in the United States. 

Trump’s tariff policy is essentially mercantilism. Economist Murray Rothbard  explained mercantilism, which reached its height in Europe of the 17th and 18th centuries.  “Thus, a policy of favoring exports and penalizing imports had two important practical effects: it subsidized merchants and manufacturers engaged in the export trade, and it threw up a wall of privilege around inefficient manufacturers who formerly had to compete with foreign rivals. At the same time, the network of regulation and its enforcement built up the state bureaucracy as well as national and imperial power.”

The American revolution was spurred by the English Navigation Act, which Rothbard explained:

The network of restriction greatly penalized Dutch and other European shippers, as well as American shipping and manufacturing, for the benefit of English merchants and manufacturers, whose competition was either outlawed or severely taxed and crippled. The use of the state to cripple or prohibit one’s competition is, in effect, the grant by the state of monopolistic privilege; and such was the effect for Englishmen engaged in the colonial trade.

A further consequence was the increase of tax revenue to build up the power and wealth of the English government, as well as the multiplying of the royal bureaucracy needed to administer and enforce the regulations and tax decrees. Thus, the English government, and certain English merchants and manufacturers, benefited from these mercantilist laws, while the losers included foreign merchants, American merchants and manufacturers, and, above all, the consumers of all lands, including England itself. The consumers lost, not only because of the specific distortions and restrictions on production of the various decrees, but also from the hampering of the international division of labor imposed by all the regulations.

The President sold his policy as being pro-American workers. But, as Rothbard points out, “Far from being true friends of laborers, the mercantilists were frankly interested in exploiting their labor to the utmost; full employment was urged as a means of maximizing such exploitation. Thus, the mercantilist William Petyt wrote frankly of labor as ‘capital material … raw and undigested … committed into the hands of supreme authority, in whose prudence and disposition it is to improve, manage, and fashion it to more or less advantage.’”  

Higher prices and lower growth look to be on the horizon. Richard Clarida, a former vice chair of the Federal Reserve who now advises the Pacific Investment Management Company, told Bloomberg that he already sees a “whiff of stagflation” in the economy.

Everyone can smell it but the President.

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Las Vegas Visitors

File under: Context matters.

Surprise and dismay might be expected to follow a quick glance at the topline year-over-year March stats for Las Vegas visitor volume, convention attendance, hotel occupancy, and average price per room — if one did not bother to read the explanatory notes by the team at the Las Vegas Convention and Visitors Authority (LVCVA):

As of March 2025

The substantial effect of the Superbowl, convention cycles (some companies rotate their annual conventions between major cities), and two big expos being held in January or February rather than March prompted us to check March 2024 numbers.

Visitors were up 4.2 percent over March 2023, but:

• Convention attendance was down 37.2 percent (with a note that the month lacked a once-every-three-years money-maker: the once- CONEXPO‐CON/AGG tradeshow, which brought 142,000 conventioneers in 2022).

• Hotel RevPAR (revenue per available room) was down 19.2 percent.

• Average daily room prices were down 16.4 percent.

The back-to-back March slumps prompted us check 2024 vs. 2023 annual stats.

Hotel Occupancy

• 2024: 83.6 percent

• 2023: 83.5 percent

Average Daily Rate (ADR):

• 2024: $193.16

• 2023: $191

Revenue Per Available Room (RevPAR):

• 2024: $161, a 1.1 percent increase from 2023.

• 2023: $160

LVCVA noted that hotel room inventory decreased by 2.6 percent in 2024 due to the implosion of the Tropicana and the temporary closure of The Mirage.

Finally, here’s the breakdown of where visitors hailed from in 2024:

Seasonal Swings

Seasonal sales swings in home sales have been increasing — without a surge in distressed sales.

The below Calculated Risk graph shows the month-to-month change in the NSA Case-Shiller National index since 1987 (through January 2025). The seasonal pattern was smaller back in the ’90s and early ’00s and increased once the bubble burst.

The seasonal swings declined following the bust, however the pandemic price surge changed the month-over-month pattern:

As of January 2024

The graph below shows the seasonal factors for the Case-Shiller National index since 1987. The factors started to change near the peak of the bubble, and really increased during the bust since normal sales followed the regular seasonal pattern – and distressed sales happened all year.

The swings in the seasonal factors were decreasing following the bust but have increased again recently – this time without a surge in distressed sales.

As of January 2024

Cars

The U.S. last year imported roughly half the vehicles sold so Trump’s surtax on autos — and major auto parts — have economists and industry analysts weighing the implications.

Bloomberg Economics, using a Fed frame of analysis, estimated a GDP hit of 0.2 percent and an increase in core price levels by 0.1 percent.

Illuminating bar graph:

As of 2024

Taking Stock

Foreign investors held $18.45 trillion in U.S. corporate stocks as of the end of 2024. This Visual Capitalist graph provides an at-a-glance breakdown of which global regions own the most:

I Want to Ride My Bicycle

With a population of 18.3 million, the Netherlands is the 69th-most-populous country in the world. Yet with 23.9 million bicycles in the country, Holland contains quite a few more bikes than people. It’s widely considered the most bicycle-friendly country on Earth, as 43% of the population rides at least once per day. Amsterdam in particular has been deemed the bike capital of the world, with one expert estimating that more than 60% of all trips in the city center take place on two wheels. So says a student blog at a Netherlands university

As of 2025

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“There’s a very broad consensus that the outlook has weakened compared with February,” Joanne Hsu, the survey’s director told the WSJ. “Consumers are worried about a whole bunch of things at this point,” she added, citing downbeat survey responses about employment, inflation and personal finances.

Elon’s DOGE boys are running with chainsaws and big, small, reciprocal, or whatever kind of tariffs look eminent.  David Ricardo’s comparative advantage is getting no trunk at the White House.

High Tower Las Vegas and RCG Economics, in their latest Fact Pack! put some numbers to the consumer doldrums. 

U.S. employers announced 172,017 layoffs in February, up 245 percent from January and the highest monthly count since July 2020. More than one-third — 62,242 across 17 government agencies — can be filed under Elon Musk’s quest to reduce the federal workforce.  

Payroll processing giant ADP reported that private sector hiring grew by just 77,000 in February, with the most job cuts in retail (38,956) and technology (14,554) in reductions. 

Total nonfarm payroll employment in the U.S. rose by 151,000 on net in February, and the headline (U-3) unemployment rate increased slightly to 4.1 percent, per the U.S. Bureau of Labor Statistics. Employment trended up in: 

• health care (52,000) 
• financial activities (21,000) 
• construction (19,000) 
• transportation and warehousing (18,000) 
• social assistance (11,000) 

Federal government employment declined by 10,000, the number of unemployed Americans was 7.1 million — including 1.5 million long-term unemployed workers (those jobless for 27 weeks or more). 

RCG’s John Restrepo makes the point that babymaking has gone out of style, shrinking the workforce. Bring on the robots. 

The Bureau of Labor Statistics projects the civilian noninstitutional population age 16 years and older will increase by 16.4 million to 283.3 million in 2033, nearly 5 million less than the increase that occurred over the 2013-23 decade. 

While Carol Ryan writes in the WSJ that home sellers may have to lower their prices,  data from the Las Vegas REALTORS® (LVR) show the median price remaining at an all-time high at $485,000. This matched the all-time high set in January and is up 5.4 percent from $460,000 in February of last year. 

Mike PeQueen and Restrepo write:

By the end of February, LVR reported 5,229 single-family homes listed for sale without any sort of offer, up 50.6 percent from one year earlier. The 2,025 condos and townhomes listed without offers in February represented a 74.6 percent jump from the prior year.

LVR reported that 31,305 existing local homes, condos and townhomes sold during 2024, up from 29,069 such sales in 2023 but down from 35,584 total sales in 2022 .

Getting depressed consumers to bite will take lower prices. 

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