Yes, it’s true bond markets are priced base on bidding. However, the federal reserve sets the baseline rate. And guess who owns the federal reserve.

I disagree that just because you can find an offer at a high price that equates to merit. I define merit as having put forth the work to deserve a reward. In the case of a home contractor who spends time and material of $100,000 to build the house, this is the value (merit) of his work. The underlying property is worth $800,000 and the house sells for $1,000,000. The bidding valuation of the sale price is the biggest part of the sale price. Value added work the contractor performed had only a small part in the sale price.

Why does this bidding up of asset prices (because interest rates are lower) make our lives harder? Because we spend a larger and larger portion of our income paying for the mortgage. If the asset price was lower to begin with we could spend more money on a bigger house. In stead, we compete with each other to make enough money to pay for bigger mortgages. People are fooled into believing that when their house goes up in value they are getting richer. Even if you sell and cash out… you still have to buy and live one.