Outside The Box

“A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.”

Two shrinking hamburgers at the drive through window for twenty bucks. The bag of chips is more than half air now, and nobody believes it’s because of “settling” anymore. There’s more air in the tank of propane but the price is higher. The 2×4 you bought yesterday is narrower than the one you bought 5 years ago. Housing is higher. Rents are higher. Everything is higher except for flat screen TV’s and plastic things from Temu.

The word “apocalypse” comes from the Greek apokálypsis, which literally means “a disclosure of hidden things.” Over time the meaning has shifted toward cosmic upheaval and judgment, or catastrophic destruction and collapse. The wallet apocalypse is something we’re all familiar with.

Recently the Dallas Fed published a disclosure of hidden things which ties directly to the wallet apocalypse. The math is squinty, as is much of what the Fed does. But the implications are clear. Actually, what the Fed discovered isn’t implied – it’s just math.

Between 2021 and 2024, the U.S. experienced an unusually large surge of illegal immigration. The Dallas Fed studied what this did to local economies. Their main finding is straightforward: Inflows of new residents in any given community creates a strong housing demand shock. For every worker inflow equal to 1% of local employment, home prices rise about 2.2% and rents rise about 1.4%, while housing supply does not increase. The Fed also finds that average income per person falls because the new workers earn less than existing workers.

These are the measured effects. And what the math also implies is an increase in prices across a wide range of goods and services:

For example, in a town of 100,000 people with roughly 60,000 employed workers, the Dallas Fed’s numbers mean that if 600 unauthorized immigrant workers arrive (a 1% worker shock), home prices jump about 2.2% (roughly $5,500 on a $250,000 house), and rents rise about 1.4% (about $17 a month on a $1,200 rental). Doubling the number of immigrant workers doubles the increase. But the Fed counts only the workers, not the full population that typically arrives with them.

In reality, those 600 workers may be accompanied by another 600 spouses, children, or non‑working adults, meaning the true population increase is closer to 1,200 people. That larger population drives twice the housing demand the Fed models and also pushes up prices in other constrained local sectors — childcare, elder care, restaurant meals, utilities, transportation, construction labor, automotive repair, and insurance — because all of these have limited capacity and respond to sudden demand the same way housing does. The Fed’s paper accurately measures the economic effects of the workers, but it leaves out the economic effects of the dependents, whose presence amplifies housing inflation, strains local services, and raises prices across the broader local economy.

These sectors behave just like housing: inelastic supply + sudden demand = higher prices. The Fed does not model these categories, but the logic is identical.

Immigration, however, is only a chapter in the Book of Wallet Apocalypse. It is an important chapter, but the crux of the story is a theme we have discussed here many times. When you print more money but wages don’t rise proportionally, everything becomes more expensive, and under the pressure of higher prices, real assets are transferred into fewer hands. We have an economy built on debt instead of production, and the same applies to most of the developed and the developing world. When the rate banks charge to lend money changes a fraction of a point, it becomes the lead story as it moves the entire market. Add to that the economic pressures of mass migration, war, deficit spending, and it all becomes fuel for the fire.

It’s hard to get an accurate read on the situation, and it’s not just the squinty math. Politics and media are constantly throwing matches and fanning the flames. The pain is real, and it’s hard to think straight when you’re hurting. And when you’re hurting, you look for someone to blame. Sadly, many are blaming the fundamentals that built the nation, and they blame capitalism as they fail to realize that the culprit is not the system itself, but the corruption of that system and its free market principles.

In the end, we’re not discussing a cosmic event, but it is a revelation. The Dallas Fed pulled back one curtain, but the truth behind the wallet apocalypse has been in plain sight for years. When systems drift from the principles that made them strong, when money is printed faster than value is created, and when pressure builds from every direction, the cost shows up in the lives of ordinary people. The revelation is simple: if we want the fire to die down, we have to stop feeding it.