Hooverizing the Housing Bubble

I have often discussed the whipsaw we are in with commercial banks deflating
and the Federal reserve, in hundreds of billions of bailout 'loans', inflating.
In the end my money is always on the government printing presses, but in the
meantime we will see many unusual economic times.  The tug of war between
inflation and deflation plays on for now, as the Federal Reserve, Congress, and
the President attempt to Hooverize the current recession into a depression by
desperately attempting to prop up house prices that are still far higher than
they should be.  Hoover in 1930 did the same with many commodity and labor
prices inflated by WW I and the Roaring '20's, making the conversion from
recession to depression.  Much of Hoover's (and later FDR's) errors came about
by the inability to grasp economic reality, the belief that the government that
created the problem could fix the problem, and money and effort spent placating
and bailing out special political interests at the great expense of the general
population.

Now we have house prices still way too high for wages, but the government
steps in with hundreds of billions to try to stop the free fall back to
equilibrium.  Those who sell at today's 'fire sale' prices are still getting a
huge manic market premium, their houses at HIGH prices appear a bargain next
to their neighbor at HIGH HIGH prices and the other neighbor at ASTRONOMIC
HIGH prices. 

Check median house prices from January 2002 ($100,000) to 2005 ($250,000) and
think what happened in Brevard County to have ever justified the increases
with formerly 2% population growth each year and now a likely OUTFLOW of
population, and in 2010, a sure fire outflow of population.  Presidents
Hoover and FDR also thought they were 'fixing' the economy, but all we have
now is a massive War Between Inflation and Deflation as government steps in
to greatly deepen our current recession.

Scott Ellis