The housing bubble is over!

[Diego Mamani]

There's no more air left in the bubble: It has desinflated.

How do I know? My sister bought a new house in the OC in 2001. Sold it for almost double in 2005. I've kept following her old tract and know what the house could sell for today. Here are the hard facts (representative of the whole coastal So. Cal.).

Late August 2001 (house price $407K): Equivalent to 447K EUR, 15.1K oil barrels, 1,490 gold oz.

Mid June 2005 (house price $810K): Equivalent to 664K EUR, 14.5K oil barrels, 1,897 gold oz.

Mid March 2008 (house price $700-725K): Equivalent to 450K-466K EUR, 6.4K-6.6K oil barrels, 700-725 gold oz.

Measured in gold or oil, the house is worth today less than half its value in 2001. Measured in Euros, the house is worth about the same! Many don't see this because we have been trained to use dollars as a measuring stick. Guess what, the measuring stick has shrank by 50% to 75%!! Forget the dollar when you want to value a house. Use something real and concrete, like oil or gold.

How was this accomplished? Our "genius" central bankers (that's the Fed for you and me) have succesfully debased the value of the dollar by flooding the world with it. They had the presses printing money 24-7, and they have "inflated" their way out of the bubble. 

As I wrote on another thread, countless savers are being robbed of the value of their life savings, and our unstable and debased currency will create problems for years and years to come. And what about the irresponsible lenders and borrowers who created this credit mess in the first place? They get a bailout! So they'll be even more careless in the next boom!

Geez, thank you Fed for being so "independent" and withstanding political pressure to flood the world with dollars and decimating the value of my savings so that debtors can have their irresponsible debts reduced by inflation. (/sarcasm off)

[kev374]

this is a pretty silly analysis. Potential buyers of houses here don’t get paid in barrels of oil or in gold bars. They get paid in dollars.

[kev374]

this is a pretty silly analysis. Potential buyers of houses here don’t get paid in barrels of oil or in gold bars. They get paid in dollars.

[kev374]

this is a pretty silly analysis. Potential buyers of houses here don’t get paid in barrels of oil or in gold bars. They get paid in dollars.

[kev374]

this is a pretty silly analysis. Potential buyers of houses here don’t get paid in barrels of oil or in gold bars. They get paid in dollars.

[kev374]

this is a pretty silly analysis. Potential buyers of houses here don’t get paid in barrels of oil or in gold bars. They get paid in dollars.

[jpinpb]

Unless everyone in Europe is moving here, work and all, then I’m not going to worry. Now if the Euro becomes what we get paid w/here, then it may make sense.

[jpinpb]

Unless everyone in Europe is moving here, work and all, then I’m not going to worry. Now if the Euro becomes what we get paid w/here, then it may make sense.

[jpinpb]

Unless everyone in Europe is moving here, work and all, then I’m not going to worry. Now if the Euro becomes what we get paid w/here, then it may make sense.

[jpinpb]

Unless everyone in Europe is moving here, work and all, then I’m not going to worry. Now if the Euro becomes what we get paid w/here, then it may make sense.

[jpinpb]

Unless everyone in Europe is moving here, work and all, then I’m not going to worry. Now if the Euro becomes what we get paid w/here, then it may make sense.

[Diego Mamani]

Kev,

I recommend you look up “monetary illusion” in any ECON 101 textbook before writing silly replies. The fact we get paid in debased dollars is part of the problem, as our standard of living will surely deteriorate.

We can’t create wealth out of thin air by increasing liquidity in the banking system. The fact that the dollar is worth less vis-a-vis gold and oil is an indication that everything else (food, clothing, consumer goods, land, etc.) will have substantial price increases in the near term. And not because these items will be worth more, but because the dollars we get paid with are worth less.

[Diego Mamani]

Kev,

I recommend you look up “monetary illusion” in any ECON 101 textbook before writing silly replies. The fact we get paid in debased dollars is part of the problem, as our standard of living will surely deteriorate.

We can’t create wealth out of thin air by increasing liquidity in the banking system. The fact that the dollar is worth less vis-a-vis gold and oil is an indication that everything else (food, clothing, consumer goods, land, etc.) will have substantial price increases in the near term. And not because these items will be worth more, but because the dollars we get paid with are worth less.

[Diego Mamani]

Kev,

I recommend you look up “monetary illusion” in any ECON 101 textbook before writing silly replies. The fact we get paid in debased dollars is part of the problem, as our standard of living will surely deteriorate.

We can’t create wealth out of thin air by increasing liquidity in the banking system. The fact that the dollar is worth less vis-a-vis gold and oil is an indication that everything else (food, clothing, consumer goods, land, etc.) will have substantial price increases in the near term. And not because these items will be worth more, but because the dollars we get paid with are worth less.

[Diego Mamani]

Kev,

I recommend you look up “monetary illusion” in any ECON 101 textbook before writing silly replies. The fact we get paid in debased dollars is part of the problem, as our standard of living will surely deteriorate.

We can’t create wealth out of thin air by increasing liquidity in the banking system. The fact that the dollar is worth less vis-a-vis gold and oil is an indication that everything else (food, clothing, consumer goods, land, etc.) will have substantial price increases in the near term. And not because these items will be worth more, but because the dollars we get paid with are worth less.

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