This is not about haunted mansions in Atlanta, but me thinking aloud about a dilemma that occurs when factoring rentals and labor into the cash-inventory equivalency.
Equating money supply with stockpiles of commodities is straightforward, but not for expenses you pay over time. So when hiring labor, say, what time frame ought to be considered when factoring its costs into the sum of all goods for sale? To answer this, I will consider mortgages, then rents, then compare and contrast monthly wages with slavery from an employers perspective.
Despite what fantasies Realtors® perpetuate, a mortgage on a home gives you almost the same legal rights as a renter. If you don't pay the mortgage, you get evicted. If you gut the place of copper plumbing before you leave, expect consequences. The fact that the landlord can evict a renter for other reasons is balanced by the fact that a renter can leave easily without consequence. With leases, the legal rights are even closer. When you "buy" a home, you and the bank must agree upon a price with the seller, and then you pay financing fees to the bank over the course of the mortgage, after which, in 30 years or so, you hold legal title.
It will vary by interest rate, but say on an $800,000 house you would owe somewhere around $4000/month to the bank. It would be more than that; $4000 would be after a down payment and at a low interest rate, but this keeps the math simple. You would also have maintenance costs including fire insurance and taxes, but they are separate from the financing costs; you would have these whether you buy the house outright or get a mortgage.
Factoring rental or lease costs into the inventory is the reverse of the process. Since the renter has full access to the use of the property, if the rental is $1000/month, that is like buying a $200,000 property. The landlord or bank at some point bought the property for around that, and renting it has ball park similarities to buying it where the landlord is the financing organization. With each $1000/month rental on the market, that is $200,000 that factors into inventory prices that ultimately must equate with the total money supply, else sales velocity starts to bog down. $200,000 sounds like a lot, but keep in mind it is only for those rentals actively on the market at a given moment, and the U.S. money supply is somewhere around $10 trillion.
We can take these same principles and apply them to labor. Let's beam over to an alternate Star Trek universe where we all have goatees, and an employer needing a laborer can choose between hiring an employee or buying a slave. If the market rate for the position is $48,000/year, that is $4000/month. In this evil dimension, if one buys a slave to do the same work, they would break even if the slave costs around $800,000. If the slave were on sale for only $600,000, that would be a bargain, or if the going rate is a million dollars per head, that would be expensive and you are better off hiring an employee. If $600,000 seems like a lot for a person, keep in mind the financing costs at $3000/month are less than wages at $4000/month. If you need to downsize, you could sell the slave to a company that is hiring to pay off the principle and close the deal.
Back on planet Earth, in figuring rentals and labor into the inventory of all goods for sale, it would therefore be the cost to own the item you are acquiring by the month, either the house or the "ghost slave," that factors into the inventory.
For housing inventory prices [I(h)], we can do a Fermi estimate: for a population of 300,000,000 in America, say there are 100,000,000 dwellings, occupied either by homeowners or renters, and let's give a 5% vacancy rate now on the market, or 5 million dwellings now available for sale or rent. Let's set the actual and "ghost" prices of all these units at $300,000 on average. 5 million x $300,000 = $1.5 trillion, or 15% of the money supply.
This approximation was not fudged and these were the first numbers I pulled out of my head. This is at least in the right magnitude, if it doesn't hit the bull's-eye. Pricing available rentals into the inventory at the full cost of the unit gets it surprisingly right at first glance, or may even understate things.
Is this my final answer? No. With rentals, the approximation may be okay, but with labor, the cost of the ghost slave is probably over-stated due to the high maintenance costs of humans that was not factored in.
But I'll leave things as they stand for now since the concept of "reverse rents" and "ghost slaves" offers a new perspective which I hope will move forward the formulas for inventory pricing.