JRBH

Housing Crisis Likely to Wipe Out Two Decades of Family-Earned Wealth

Rubbish! Except California, Nevada, Florida and Arizona and home values are flat for the time period. I have heard this tripe for nearly thirty years mostly from Wall Street types who see real estate as competition for funds. Experience shows that pent up demand occurring during a housing downturn when released [as it always is] creates recovery in sales and prices dramatically faster than predicted. There are a couple of fundamentals that the "smart guys" always resfuse to accept. There are more new families created every day and night and virtually all of them desire to own a home. Do not confuse homeowners and with speculators. Today more than ever, a home is the families best investment. Bar none.

The Deflation/Inflation/Stagnation Debate

While raising rates directly into a weakening housing sector, Mr Bernanke and the wizards of Wall Street [who got us into the current trap] kept asserting that a housing slowdown would not effect the general economy which is somewhat akin to saying that liver cancer is not a threat to ones general well being. I certainly do not know what, if anything , can be done to escape without some sort of discomfort. But I do know this, homebuilders have been in depression for nearly two years now, homeowners have seen their biggest asset in freefall and all sectors are suffering and will only suffer worse until this condition is corrected. Today, the clear enemy is continuing deflation. Raising the cost of money and reducing its supply in this type of environment was tried once before by Mr. Hoover. The definition of insanity is doing the same thing and expecting different results.