How does today’s economy compare to the past 2 tough times for RE. What are the time periods you are refering to?
Were incomes rising, flat, declining?
What was the job situation? Were decent paying jobs available?
What was the debt load at the consumer, municipal, state and federal levels like?
What was the condition of the US dollar? Did these ‘tough times’ for RE correspond to declines in the dollar? Did the dollar start the tough times from the 0.90 level or better?
I would like to consider some of these factors and look for similarities/differences to today.
If I understand what you are saying, Chris, no matter what happens with interest rates the Fed will continue to create new money/debt at a rate faster than the prevailing inflation rate – thereby keeping ‘real’ interest rates negative.
And, it is only by implementing positive real interest rates that the RE market could be affected significantly.
Several of the proponents of silver and gold as the only honest money believe that the prices of those metals will continue to rise for as long as real interest rates remain negative as they are today. They point to the precious metals bull market in the late 70’s and the fact that Paul Volker had to raise nominal interest rates into the 20’s to create the real interest rates that would halt and reverse the precious metals bull.
