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11 years ago

Can you realistically talk of
Can you realistically talk of home price appreciation without any mention low rates and low inventory? It reminds of that Russian joke. Carter and Brezhnev raced a 100 meter sprint. Carter won, but Pravda reported Brezhnev came second and Carter second to last. Eternally grateful for all the hard work you put into this blog Rich, but couldn’t resist it ๐Ÿ™‚

11 years ago

Don’t you mean the low and
Don’t you mean the low and mid-priced tiers, or am I not reading the graph correctly?

11 years ago

Rich, I know you said you
Rich, I know you said you don’t want to rehash the interest rate thing again, but hopefully this is a thoughtful question: When you say you expect interest rates to go much higher in the future, are you talking about government interest rates, or consumer and mortgage interest rates (i.e. that the spread between government rates and mortgage rates would increase).

If the former, I don’t see how that is possible. If interest rates on government bonds increase significantly, government finances would implode because government debts and obligations are so high that no realistic increase in taxes could possibly pay the interest on the government debt in a high rate environment. So the Fed would step in to buy down the rates, as they’ve shown themselves willing and able to do on several occasions in the last few years.

This game probably eventually collapses, but that might be a decade or more in the future. I won’t say the US is quite following Japan because the economies are so different, but I will say that a lot of people have lost a lot of money betting on a rise in Japanese interest rates and I think people might be surprised how long American rates can stay low.


11 years ago
Reply to  HenryPP

If we run into Japanese type
If we run into Japanese type deflation despite low interest rates and Bennie-boy giving his all, that would be BRILLIANT.

11 years ago
Reply to  pinkflamingo

Sounds like the 37th Tsunami
Sounds like the 37th Tsunami warning to date

Try this one instead

11 years ago

Zombie banks = zombie real
Zombie banks = zombie real estate market.

Any word from Ramsey Su about the current state of things?