Every key interest rate hike is another brick in the wall separating the younger generation from the hope of owning their home. But could it be that this wall is being built deliberately?
While millennials and Generation Z are mired in endless rental purgatory, boomers calmly watch as their real estate grows in value as if on steroids. Coincidence? Or a calculated policy of financial gerontocracy? Behind the beautiful phrases about "fighting inflation" and "economic stability" lies an uncomfortable truth: modern monetary policy of Central Banks may be the largest redistribution of wealth in human history, disguised as "economic necessity."
The Golden Age of Boomers: When Houses Cost Like Cheeseburgers
In the post-war era, boomers entered adulthood in an economic idyll that today's youth can only see in retro films. The average American or European worker could afford to buy a house by spending 2-3 annual salaries. Mortgage rates, although higher than today's "pre-COVID" ones, were offset by a higher salary-to-house price ratio.
Economic boom, wages growing in real terms, and government programs supporting homeownership - all this created unprecedented conditions for capital accumulation through real estate. As economist Thomas Piketty put it: "Boomers didn't just earn their wealth - they were born in an era when the system itself was configured to create a middle class."
And now? The average housing price in metropolises has skyrocketed to astronomical heights, requiring 8-12 annual salaries from young professionals - and that's before we start talking about mortgage interest, which turns a thirty-year loan into lifelong bondage.
Inflation: The Invisible Hand in the Youth's Pocket
"Inflation is a form of taxation that can be imposed without legislation," Milton Friedman once said. But this "tax" is strikingly selective in its victims. While owners of real assets - real estate, stocks, art objects - watch their wealth grow with inflation, those who are just trying to save for a down payment see their savings being eaten away faster than they can replenish them.
The decade of ultra-low interest rates after the 2008 financial crisis was presented as "saving the economy," but in fact it became an unprecedented pumping of wealth to asset owners. Real estate prices soared, and housing affordability plummeted to a historic low. Boomers who already owned homes saw their wealth multiply, while millennials faced the prospect of eternal rent.
And now that inflation has hit the economy, the Central Bank has rushed to "tame" it in the only way they know - draconian rate hikes. And who pays this bill? The very generations that didn't manage to jump on the last train of affordable mortgages.
The War on Inflation: Collateral Damage or Intentional Sacrifice?
"Inflation is public enemy number one," they tell us. But who determines the hierarchy of these "enemies"? Why don't the housing crisis, growing inequality, and intergenerational injustice merit a similar emergency mobilization of resources?
When the Central Bank raises rates, it is presented as a bitter but necessary medicine. However, the reality is that this "medicine" has very different effects for different population groups. For capital owners, it's a temporary slowdown in wealth growth. For young people striving to buy their first home, it can be a death sentence for their dreams of having their own house.
Each percentage point increase in the rate means thousands of postponed or canceled housing purchases, thousands of young families forced to continue paying for someone else's mortgage through rent. And all this in the name of fighting inflation, which, ironically, is often caused by factors far beyond the control of these same young people - geopolitical conflicts, disruptions in global supply chains, or speculative actions in commodity markets.
Numbers Don't Lie: Housing Apartheid of Generations
The bare facts expose this quiet economic revolution better than any theories. In the 1980s, about 65% of people aged 30-35 owned their own homes. Today, this figure has fallen to 25-30% in major cities of developed countries. The average age of a first-time home buyer has risen from 23 in the 1970s to almost 40 today.
Even more revealing is the gulf in the house price-to-income ratio. In the 1970s, this ratio was about 3:1 - that is, the average house cost three annual salaries. Today, in major cities, this ratio reaches 10:1 or even 15:1, making buying a home mathematically impossible for most young professionals without "parental capital."
Meanwhile, the average boomer accumulated 8-12 times more wealth by age 40 than the average millennial at the same age, accounting for inflation. This is not just a statistical anomaly - it's a systemic distortion, fueled by policies that methodically protect accumulated wealth at the expense of creating new wealth.
Central Banks as Weapons of Class Warfare
Could it be that Central Banks, these supposedly "independent" institutions, are actually instruments in a hidden class conflict? Their mandate for "price stability" conveniently ignores the fact that for some classes and generations, "stability" means preserving their privileged position, while for others, it means perpetuating exclusion.
As economist Mark Blyth noted, "central bank independence is a political decision to isolate certain economic interests and protect them from democratic interference." It's no surprise that CB boards of directors consist predominantly of people whose own financial interests align perfectly with the interests of the asset-owning class.
When a Central Bank head speaks about "containing inflation expectations," they rarely mention that these very actions reinforce the expectations of an entire generation that they will never achieve the level of prosperity of their parents. Notably, in debates about monetary policy, its distributive effect between generations is almost never discussed - as if it's an uncomfortable topic better left behind closed doors.
The Vicious Circle: Rent, Debt, and 21st Century Feudalism
A system built on constantly rising housing prices creates a new type of economic feudalism. Young generations are forced to give an ever-increasing share of their income to landlords - often representatives of the very generation that acquired real estate at affordable prices decades ago.
This system reinforces itself: the more money goes to rent, the less youth can save for a down payment. The less they can save, the longer they remain tenants. And the more people are forced to rent, the more profitable it becomes to invest in rental property, which further raises prices and pushes the dream of owning a home further away.
Add to this mountains of student debt - another phenomenon that previous generations hardly faced - and you get a generation doomed to financial vulnerability. When politicians and economists wonder why millennials and zoomers are "killing" various sectors of the economy or postponing family formation, they conveniently ignore the fact that these generations have become the first in modern history to live worse than their parents.
And the Central Banks? They continue their "holy war" against inflation, ignoring the fact that their policy exacerbates the greatest mechanism of inequality transmission - the housing market.
There Is a Way Out: Breaking Through to a New Financial Paradigm
The traditional financial system seems hopelessly set against younger generations, but technological revolution offers alternatives. In a world where inflation becomes an instrument of intergenerational robbery, and central banks act as an invisible hand shifting wealth from the young to the elderly, new financial paradigms are emerging.
Decentralized financial systems challenge the monopoly of central banks on creating and controlling money. In particular, deflationary cryptocurrencies offer a fundamentally different approach to saving and accumulating value.
Among the most promising solutions is DeflationCoin - the first currency with algorithmic reverse inflation. Unlike traditional assets that lose value due to inflation, or even Bitcoin, which simply limits emission, DeflationCoin actively reduces the number of coins in circulation, creating natural value growth over time.
Monetary policy, presented as technocratic management of the economy, is actually a deeply political tool for redistributing wealth between generations. Central banks, while fighting inflation, in practice contribute to an unprecedented transfer of wealth from young to old, from non-owners to asset owners.
In a world where traditional financial instruments become inaccessible to entire generations, innovative solutions like DeflationCoin offer a chance to rewrite the rules of the game. Instead of a system that punishes savings through inflation, deflationary cryptocurrency rewards long-term thinking and creates new opportunities for those who have been excluded from the traditional path to prosperity.
Perhaps it's time not just to criticize the existing system, but actively build alternatives that will return economic hope to those from whom it was taken.