sduude, realtor Jim Klinge on bubbleinfo.com. Check out his story on how to price your home Your Value Minus 20% , shows we are down 20% in North County.
Rich, how many asset bubbles can the Fed blow before the dollar becomes really devalued? How can they lower rates with commodity prices on a multi-year run according to Jim Rogers? Ben Bernanke slipped at his testimony the other day, and I caught it. He said, “Inflation is going to moderate over the NEXT COUPLE YEARS”. He realizes it’s a long term problem.
He was blasted by questions from senators concerned about rising interest rates and he defended his position, saying he had to stop inflation now, because if he didn’t, he would have to raise rates much more later.
A recession is necessary to cleanse the excesses. Circumventing it will cause problems elsewhere in the economy.
So maybe we won’t get the 80% drop, but if we don’t, we need to be careful what other asset bubbles or excesses are created in an attempt to avoid the true correction.
Again, to get a big drop, we don’t need that many desperate sellers. 30,000 annual sales set the price for all 1 million homes in San Diego. And only a few of those set the price for all the listings.
Again, SD North County is down 20%, and in the last correction, Calculated Risk shows the largest drops came in years 3-5 (20% each of those years).
Rich, why didn’t the Fed stop the bubble pop in the 90’s housing bust? We had S&Ls that had to be saved. They let housing drop for 5 years. Why won’t they let it go down for 5% this time?
The Fed allowed the stock market to lose $ 7 trillion in value.
