The Federal Reserve has essentially gone Soviet Union on the US housing market. Without a doubt this has caused a mini-boom in the market but is this simply more fumes or something more sustainable? We’ll try to look at current data and try to examine where the market is heading for the rest of 2012.Read it at Dr. Housing Bubble
The wonderful world of command control US housing – 6 charts highlighting future trends in the housing system. Silent crashing markets, command style housing controls, and Fed top sponsor of maximum leverage.
by Dr. Housing Bubble
I've been complaining about the command system in place at the apex of the economy, with a small groups of unelected, unaccountable, and interested technocrats pulling the levers of monetary policy to micromanage the economy. It's both anti-capitalistic and anti-democratic.
Plus, it doesn't work.
As a commenter recently said, "I'm tempted to say to these very smart people that we're not in a 'liquidity trap,' we're actually in a stupidity trap." Amen.
Note that Dr.Housing Bubble may a good RE analyst, but he doesn't grok monetary economics.
Those that think rising rates would be a sign of inflation or a rising economy need only look at Italy, Spain, and Greece to see if rising rates signal a good economy. No, rates can rise if people lose faith. Fortunately for now, the U.S. is the least ugly girl at the dance so we are able to keep rates ridiculously low. Yet is this a good longer-term strategy? Eventually investors will want their money back (when do we think we’ll pay off that $15+ trillion national debt?).He doesn't get the difference between nation that is a currency issuer and one that is a currency user, i.e., is borrowing in a currency that it doesn't control. But that doesn't substantially affect his analysis.
UPDATE: See also Mish's Three Key Reasons Housing Not Coming Back: Demographics, Student Debt, No Jobs