muses of the moment

February 5, 2013

Housing Boom?

Filed under: Good Debt Bad Debt, Housing Market, The Banking Crisis — Tags: — totallygroovygirlfriday @ 8:04 am

Charles, once again, illustrates the continued housing bust. Click here. Take a look at that last chart. A third of what we had at the peak is called a recovery in housing?

Remember this quote, it will serve you well:

Speculative bubbles often produce an “echo boom” a few years after the bubble has burst, as the cultural/institutional memories of the asset’s spectacular gains remain operative long after the initial boom/bust.

Then bookmark this chart. Note the “return to normal” second peak after the high. The time to buy with cash is around “despair”.

The US Housing Market can not continue to expand because of debt contraction, period. This is a long wave cycle that started in 1950, peaked in 2007, and will not hit a low until 2032 according to Martin Armstrong.

Side musing: to understand the long housing cycle from 1950 to 2032, one must use an inflation-adjusted chart for historical housing prices. The distortion of the fiat currency and historical debt availability will lead you to incorrect conclusions.

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