CAR, as you reflect on this I will give you a follow-up question.

Let us assume for the moment that history were different and the top of the market would have been reached during 2000-2001 and that the top would have been nominally equivalent to the top set in 1990. In other words let’s assume there was no credit bubble.

My question is where do you think prices would be today 10 years after the top set in 2000-2001?

The reason I ask is because you have suggested many times that 2000-2001 prices would be about the level you would pull the trigger at today and many others have suggested the same thing. By implication then it seems that you are saying that in the absence of the credit bubble that today’s prices should be nominally the same not only as 2000-2001 prices but also 1989-1990 prices.

In other words, real prices should have steeply declined over the past 20 years in the absence of the credit bubble.

As it stands, given that some cream-puff homes in SD county are currently selling for real prices (after adjusting for inflation) that are slightly lower than what they sold for in 1989-1990 it seems that with all of the government intervention and lowering of interest rates, all the government was able to accomplish was flat or slightly declining real prices over the last 20 years in arguably one of the most desirable cities to live in the country. This much we know as fact because we can see it in the sales records.

What is compelling to me, is that you seem to be saying that in the absence of government intervention and FED easy money policies that real inflation adjusted prices should have declined sharply over the past 20 years.