patrick.net

The Emperor isn't wearing any clothes ...

I was talking about GD1 with my sister-in-law and she pointed out her family was in dire poverty for years before the GD and I realized ours was up through the 1940's. Then I realized the parallel. I had known about the 1890's RE bubbles and the 19teens bubbles but didn't really put these all together. GD2 might not be around the corner but might be over the next hill. Don Kohn and company might not have set a trap for their children but might have set a prison for their grandchildren. GD2 may very well not pan out for a decade or two or even three. After the elites steal as much as they possibly can, then the country will deflate. Its not even economics to see the pumping efforts by the government today. Socialism and Communism never work long term and I'm saddened to see Americans tolerating them.

How is anything that's happening today "socialism" or "communism"? You could argue that the government owning GM is socialistic, but that's a tiny drop in the bucket compared to the real jackassery like what's happened with AIG.

By the way -- nothing that happened in the late 1800s to early 1900s could even be close to equated with "socialism". The government owned virtually nothing and taxes were practically nonexistent until 1912. Are you sure you even know what socialism is?

The Federal Reserve deserves an awful lot of blame for both GD1 and GD2, but their stupid policies are not "socialism" and they're pretty much the polar opposite of "communism". They are an institution by banksters for banksters who just managed to swindle the American public out of billions for Goldman Sachs and their ilk.

I think actually the banksters have staged a coup d'etat. They run the government. This is, in practice, no different than Communism as practiced in USSR and China. The members of the party live a lush life and the dominated are left to a life in which products and prices are dictated by the ruling class. This is the essential difference between Socialism/Communism and Freedom/Capitalism. In the USA today, something like over 50% of people in the USA have government-paid-for healthcare. The market decided Chrylser's and GM's products were not acceptable but the government decided the market would have to buy them anyway. With tax dollars no less and theft from the bond holders. The market decided Goldman Sachs, AIG, and others should be terminated for gambling instead of investing; but the Government decided they should be rewarded with $700,000 bonuses from the taxpayer's wallets. The market decided housing was waaay over-priced and should be allowed to correct; but the Government decided it should be pumped up and unrealistic prices sustained.

I actually think you'll have a hard time saying any part of the USA economy is not controlled by the Federal Government or at least largely affected by the USA government policies. From sugar to everything else, the markets are controlled by the government and not by demand. Capitalism is not a characterization of the greedy nature of humans but bows to the efficiency of supply and demand. By using tax dollars to prop up housing prices, the government has manipulated the demand curve. The mis-used money does come from somewhere. Roads. Education.

The reason the FED is so detrimental is it abandoned loan ratios in favor on monetary policy; but monetary policy relies on controlled inflation which is simply another way of saying debt which is itself just a way to distort current demand by bringing future demand to the present. In short, the more the banksters pump the bubble, the more our grand-children will suffer. Do not think for a moment the banksters do not know this; they probably assume this will be a return to the 1890's and they are the new robber barrons. This certainly is true today. Just as in the 1890's, they actually are the ones working the puppet Congress. The banksters are the new Government. They are the politburo and their staff are the members of the party who are living lavishly at the expense of the average American.

Kevin,

The Goldman conspiracy did not swindle the American public, the Congress did. If the Congress would have let market dynamics complete their natural course then perhaps Goldman would have gone bankrupt with all the legal suits and the collapse of the dollar. Stealing from the workers via engineered inflation is practiced by the FED but really the fault of Congress. Stealing from the future is practiced by Congress but the fault of the President. The country needs representation in Congress, the Presidency, and our Courts. We do not have it. These three branches of government work squarely and wholly for the elites.

This is where we differ. You think the elites achieved the destruction of the middle class by business but I think they did it by government. They did it by government. Almost nobody would write a mortgage with less than 20% down today unless the government were buying them up. Et cetera. Its all backed by government and by that quasi-governmental congregation called the FED. Alone, one corporation cannot monopolize a market or extract tax money to use to back their gambling/excesses. It is communism. It is socialism. As they are practiced. Not as they are written about in books written by dreamers. Government in practice always and only exists to "govern": to control. This is why government is always the worst choice and should NEVER be a business. In contrast, hiring and employment is dominated in the USA by government (another symptom of socialist and communist countries).

maxweber says

Almost nobody would write a mortgage with less than 20% down today unless the government were buying them up

That is just patently false. So much so to be ridiculous. As is the majority of what you've written... Take a step back and get some perspective before you go on your rants next time.

tatupu70 says

maxweber says

Almost nobody would write a mortgage with less than 20% down today unless the government were buying them up

That is just patently false. So much so to be ridiculous. As is the majority of what you’ve written… Take a step back and get some perspective before you go on your rants next time.

Ummmm, what's that device used to unload risky and even non-risky loans, umm, help me out here.

This is why you have to have TBTF banks. You then can let them hide loans, which they still do, and you let Fannie and Freddie back them, and you let them lend and blow ponzi bubbles, and then reflate later. And all this is to make money for the banks, which are actually getting bigger, while the regional banks get stiffed.

The ponzi housing scam was set up at Basel 2 in 1997. The off balance sheet banking there was the method of hiding the ponzi. Enron people went to jail for doing the same thing. Bankers get bonuses for it.

tatapu70, are you joking? You ought to read this:
http://www.calculatedriskblog.com/2010/05/965-of-mortgages-backed-by-government.html

I know using the words socialist, communist, and capitalist are not constructive to any discussion. Sorry I used them. I just want to point out that the government IS behind most of the housing trade. Sure, its a generalization and there are exceptions. But 96.5% of all mortgages is a darn conclusive argument. Only one who lies to oneself would believe we have a free market.

P.S> I'm also curious to know if you have tried to get a mortgage or refi lately. Its tough now.

maxweber says

I just want to point out that the government IS behind most of the housing trade. Sure, its a generalization and there are exceptions. But 96.5% of all mortgages is a darn conclusive argument. Only one who lies to oneself would believe we have a free market.

Which wont last. Eventually the Gov will have to detangle itself from the market and allow prices to fall to natural levels. They are only delaying the inevitable.

Maxwebber, your comments are 100% right on, and those who are arguing are not really reading what you have written. Yes, it is disturbing to a liberal's sensibilities to read that we have become socialist, and that this is not a positive development (and I am a liberal). But, what you have written is absolutely true. It is not socialism in the utopian sense, where government enacts programs to benefit the masses. It is instead socialism for the elite, which was exactly the failure of the USSR, as you correctly pointed out. The important and most disturbing part of the equation is not the deregulation of the market (although it couldn't have happened without that), but rather the success of the elite in getting the government to cover their losses with taxpayer money; the systematic transfer of wealth that is occurring as we speak. Had the government not intervened, the major players would have gone bankrupt. The free market would have destroyed them. They could not have pulled off the coup without having complete control of the government. They do own the government. Every congressperson who was to vote on bailing out Wall Street received unprecedented input from their constituents, with phone calls running as high as 90% against the bailouts. But nearly all of them had no regard for the will of the constituency, because the government is in fact beholden to Wall Street. Anyone who cannot see this is very deeply in denial. And you are absolutely right about mortgages. Something like 90% (or more?) of mortgages being written now are owned by the government.

maxweber says

tatapu70, are you joking? You ought to read this:
http://www.calculatedriskblog.com/2010/05/965-of-mortgages-backed-by-government.html
I know using the words socialist, communist, and capitalist are not constructive to any discussion. Sorry I used them. I just want to point out that the government IS behind most of the housing trade. Sure, its a generalization and there are exceptions. But 96.5% of all mortgages is a darn conclusive argument. Only one who lies to oneself would believe we have a free market.
P.S> I’m also curious to know if you have tried to get a mortgage or refi lately. Its tough now.

First off--I misunderstood your statement. My apologies. I read that to read that the government owned that percentage of the bad mortgages of the past. Not a snapshot of new activity right now.

Now--as to your point about being a free market--I agree that there is government assistance in the mortgage industry right now. My argument is that it's because the private sector isnt' lending right now because they are still smarting from their disastrous decisions of 2003-2008. Government has stepped in to try to maintain an orderly market... It's still a free market. I did refi last year with Bank of America and it hasn't been sold yet (as least as far as I can tell). FHA loans are horribly expensive--they really aren't competitive for people with good credit.

http://www.huffingtonpost.com/2010/04/19/the-scariest-charts-of-th_n_540456.html

In my opinion, maxweber has much more of a handle on what's going in in this country than you do. What good is petty bickering over partisan politics going to do us right now? Do you see the wealth disparity trending down? I do not. It's worse than ever. If debt doesn't interest you, then you are completely missing what's happening to our economy.

Welp, inflation is more probable than default so those holding houses might come out OK. The world is still throwing money at the US government. Maybe not a case of being a good investment as much as being better than all the rest. God Bless America!

And please, google "lost decade" before you continue singing Japan's praises.

Japan's rise in the 80's had a lot to do with them adjusting their currency. There was a massive pent-up storage of cash that was let loose in hours. Its understandable that there was some breathing room afterward when expectations weren't kept.

yes, I was writing a post on Japan and deleted it.

Japan has some advantages in its mercantilism and general efficiency and lifestyle frugality.

Internally, consumers have been benefitting from the strengthening yen since the 1980s. This strengthening was largely captured by the byzantine retail sector, but over time much of this increased purchasing power has been shifted to the benefit of consumers (this is where some of Japan's "deflation" is coming from -- Japan has to import so much, and the 40% appreciation of the yen since 2003 has been quite significant).

But underemployment is a continuing issue. ~50% of college grads don't have a job lined up upon graduation. Women are especially frozen out of the job market.

Japan's Lost Decade was caused by speculation in ephemeral stock and real estate valuations. Many, many people and corporations simply got wiped out as the bubble unwound -- anybody who put money into the market in 1986-92 is STILL underwater today:

http://finance.yahoo.com/q/bc?s=%5EN225&t=my&l=off&z=l&q=l&c=%5Egspc

Japan got to where it was in the 1980s by a lot of unpaid overtime hustle and denied consumption in the postwar period. I am of two minds about its future prospect. It's going to have a trillion-dollar hoard of US debt soon enough, on a per-capita basis that's 5X China's position. It's got a twenty year headstart on China as a multinational player in the modern world. Theoretically I think its depopulation trend is good and will result in a country that can comfortably pay its way in the world.

So much of economic discussion is muddled by the avoidance of the fundamentals of wealth creation: food production, raw materials, energy, capacity utilization, workforce skills, etc. By these measures, I think Japan will do alright this century.

I'd love to see ourselves get on the depopulation trend, and not just import people like another fungible commodity whenever wages get too uppity.

Troy says

So much of economic discussion is muddled by the avoidance of the fundamentals of wealth creation: food production, raw materials, energy, capacity utilization, workforce skills, etc. By these measures, I think Japan will do alright this century.

Overall hypergrowth unseen by other economies; from backward feudalism to modern technology and financial behemoth in a lifetime. The lost decade as more a less a correction over the rapid rise to more stable economy. Your right about the depopulation trends.

sybrib says

That’s the natural resource that Japan was still making in the 1950’s but not enough any more by the mid-1990’s, similar to now, as you point out, Western Europe, which is also in decline.

Just pumping out babies doesn't result in the eventual appearance of worthwhile members of society.

Less people mean more opportunities. Population decline is not identical with cultural decline (though depopulation itself is -- certain areas of Japan are reverting to wilderness as the rural population just ages away).

sybrib says

Western Europe may rise again as a Pan-European “Islamic Republic of Europe”, but it’s probably a century or more out.

Well, I thought the chance of Apple passing Microsoft in market cap was impossible just a year ago, so I'll withhold comment on this.

I didn't write that pumping out babies is a natural resource. But one way to guarantee your society is in decline is to have its numbers in decline. Besides, immigration is another way to keep the population stable if the birthrate is in decline.

People are needed to create opportunities. Less people means more opportunities sounds an "awful" lot like an attitude attributed to Western Europe or even Japan, a couple of civilizations that continue to be in decline.

"If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years," said David Lereah, chief economist of the National Association of Realtors and author of "Are You Missing the Real Estate Boom?" "It's as if you had 500,000 dollar bills stuffed in your mattress."

He called it "very unsophisticated." (Los Angeles Times Aug 28th, 2005)

-- Comments by David Lereah

thomas.wong1986 says

He called it “very unsophisticated.”

My mom qualifies for Federal Poverty Level Medicaid since the divorce and all.

But she has zero debt. Our Mother's Day brunch this year was in a nice restaurant in Laguna Beach, and I joked that she may be poor but she probably is better off than half the well-coiffed OC types in the room.

Troy says

But she has zero debt.

My hats off to her. Smart lady!

gameisrigged says

started a policy of funneling what has ended up being trillions of dollars of taxpayer money to Wall Street.

"trillions"? This is kinda not true.

Regardless of the public support the banksters have been getting (eg. the carry trade racket in Treasuries) the fact of the matter is that [very nearly] the entire financial system chugged the kool-aid nonstop 2003-2006. We're talking Citibank, Bank of America, Wells Fargo.

And by 'chugging the kool-aid' I mean taking hundreds of billions if not trillions of bad loans on their books. Now, I may still change my thinking depending on future events, but going into this crisis my general appreciation of the banksters was that they operated the cardio-pulmonary system of the economy, and thus were collectively (and largely individually) indeed "too big to fail" unless we wanted to see a business turn-down that made 1932 look good.

The Federal Flow of Funds report shows that total household mortgage borrowing was $6.0T at the end of 2002, and this same borrowing level peaked at $10.5T in 2008, for a total of $4.5T of mortgage debt expansion over the bubble.

How much of this $4.5T bubble debt is going to be worthless? In 2008 I was saying 10% is certain, 20% likely, and 30% entirely possible.

THAT WAS (AT LEAST) A $500 BILLION HIT TO THE SYSTEM.

$500B is an immense amount of money (the total present market caps of the top 4 banks), and it was the best case! Now it's pretty clear that 30% is certain and who knows the end of this.

The PtB have to "turn the machines back on" or we'll continue this slide into financial ruin.

We're still over a year away from the second wave of resets:

Very good analysis Troy.

Troy says

gameisrigged says

started a policy of funneling what has ended up being trillions of dollars of taxpayer money to Wall Street.

“trillions”? This is kinda not true.

Uh, yes, it kinda IS true.

http://www.sourcewatch.org/index.php?title=Total_Wall_Street_Bailout_Cost

gameisrigged says

Uh, yes, it kinda IS true.

No, entries that say "Federal Reserve" are not taxpayer bailouts, that's Fed intervention via money creation. The Treasury portion of that list is well under $1T, and the "Outstanding" column of Treasury bailouts is under $500B it looks like.

Troy says

gameisrigged says

Uh, yes, it kinda IS true.

No, entries that say “Federal Reserve” are not taxpayer bailouts, that’s Fed intervention via money creation. The Treasury portion of that list is well under $1T, and the “Outstanding” column of Treasury bailouts is under $500B it looks like.

Do you not think the creation of money supply that is all given to Wall Street doesn't cost the taxpayers? I understand your point that technically, the money hasn't come out of the Federal Reserve, but certainly you cannot create money out of thin air, give it to one small segment of society, and say there is no cost, can you? Wall Street certainly enriched itself while the wages of workers in all other segments remained stagnant, and the Fed money is part, if not most, of the means Wall Street used to do so, isn't it? Wall Street has resumed paying lavish salaries and bonuses, while homebuyers have only gained the opportunity to place themselves in more debt.

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1

Troy says

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1

Doesn't that just prove that there are a lot of poor people? Kind of supports my premise that wealth is being taken away from the middle class and given to the elite, doesn't it?

The poor are along for the ride, yes.

The top 20% -- upper middle class and above -- pay two thirds of the income taxes. They need to pay more, of course, but so does everyone.

There are a lot of moving parts in this puzzle and nobody has all the answers.

"I don't have any solution but I certainly admire the problem."

Everything is f---ed. How to unf--- it would require a PhD thesis or two, not an internet comment.

We've had a progressive tax structure as long as I can remember. I'm not bothered a bit if the top 20% pay a higher percentage of income tax than I do. They can all bite me. Don't forget, though, that sales tax is regressive. But none of that is new. What they're doing is more subtle than just raising taxes. They are increasing the money supply, and giving the new money to Wall Street. Meanwhile, the working man's wages are stagnant, and his savings pays no interest, so he is losing money to inflation. An overly simplistic analysis would be, "I'm not paying any more taxes than I was before, so everything's o.k.". I think that misses what's really happening.

The core problem is that ~60% of this country are idiots at any given time.

Prop 13 including commercial and rental properties is a primary example. It got 65% of the vote back in 1978.

They are increasing the money supply, and giving the new money to Wall Street

It's a little more complicated than that. The money supply has already been done increased:

http://research.stlouisfed.org/fred2/series/MZM?cid=30

2004-2006 was when the system went open-loop. Note that our trade deficit maxed out then, too:

http://research.stlouisfed.org/fred2/series/BOPGSTB?rid=51&soid=19

Commercial lending went through the roof:

http://research.stlouisfed.org/fred2/series/TOTBKCR?cid=101

What is happening now is keeping the system together and not have it fly apart in cross-default event, which by all rights it should since precious little of investment last decade was into actual productive capacity worth a damn.

Meanwhile, the working man’s wages are stagnant, and his savings pays no interest, so he is losing money to inflation

Deflation doesn't really work that way. In the deflation cycle, eventually everybody who works for a living loses their job and ends up homeless as demand is destroyed in chain-reaction layoffs. That was what the 1930s was all about.

I'm no brilliant macro-economist, I barely know the difference between M1 and M2 (and TBH have no idea what M3 is and why the Fed stopped measuring it in 2006), but I do know the system went off the rails in 2002-2006, and I know who the culprits were and what they allowed to happen.

Getting back to the happy days of 1999-2000 is going to be tough, if not impossible. Ideologically, ~40% of this country are idiots, and another 40% are economically helpless, unable to compete with the 500M Chindians who are smarter, harder-working, and have gained access to our mfg and service sectors. Maybe 1 in 5 of us has some actual idea of what's going on, but nobody, especially not me, has any answers.

Troy says

It’s a little more complicated than that. The money supply has already been done increased:

No, that's not more complicated. You're just saying it's happened before, which I never denied. Doesn't mean it didn't happen in 2009 TOO. In fact, look at your own chart; the curve gets steeper around then.

Deflation doesn’t really work that way. In the deflation cycle, eventually everybody who works for a living loses their job and ends up homeless as demand is destroyed in chain-reaction layoffs. That was what the 1930s was all about.

Not sure of your point. Look back up at the chart I posted. The rich are getting richer, the poor are getting poorer, and the middle class is being destroyed. Yes, it DOES work that way. I'm not paying a higher tax rate, but I haven't had a salary increase in 2 years, I'm getting fewer hours of work, and my savings is making less interest than the rate of inflation. And my situation is typical of the middle class right now.

gameisrigged says

No, that’s not more complicated

yes, it is . . .

http://en.wikipedia.org/wiki/Triffin_dilemma

Chinese manufacturing coming online 2000-2002:

oil imports doubling from 1990-2005:

established a very large momentum in global trade, and the world's need for USD. Over half of the USD in the money supply circulates overseas. Here at home, we have been able to cruise on the kindness of our trading partners and their multi-trillion dollar USD hoards. They've got our money now, and they lend it back to us as they can.

And my situation is typical of the middle class right now.

The rich getting richer is a given. $10M throws off $500K/yr in interest @ 5%. The poor getting poorer, likewise.

The 2005-2007 economy was a Potemkin Village economy fully fueled by the temporary and unsustainable run-up in real estate values. OF COURSE everything is going to go to sh-- now. Homeowners were pulling out HUNDREDS OF BILLIONS of dollars a year out of their inflated valuations and either spending it or knocking down card debt:

$500B/yr may not sound like much in a $11T economy, but that injection funded TEN MILLION household incomes.

That hot money is GONE now. No more magic ATM. Without monetary intervention, we wouldn't even have an economy now. THAT was largely why BAC was trading at $3 last March and the S&P 500 was in the 600s.

Worrying about "inflation" now is perverse. While Japan may not be a good model, their history 1992-2010 has demonstrated that macroeconomics is a bizarre beast.

Troy says

gameisrigged says

No, that’s not more complicated

yes, it is . . .
http://en.wikipedia.org/wiki/Triffin_dilemma
Chinese manufacturing coming online 2000-2002:

oil imports doubling from 1990-2005:

established a very large momentum in global trade, and the world’s need for USD. Over half of the USD in the money supply circulates overseas. Here at home, we have been able to cruise on the kindness of our trading partners and their multi-trillion dollar USD hoards. They’ve got our money now, and they lend it back to us as they can.
And my situation is typical of the middle class right now.
The rich getting richer is a given. $10M throws off $500K/yr in interest @ 5%. The poor getting poorer, likewise.
The 2005-2007 economy was a Potemkin Village economy fully fueled by the temporary and unsustainable run-up in real estate values. OF COURSE everything is going to go to sh– now. Homeowners were pulling out HUNDREDS OF BILLIONS of dollars a year out of their inflated valuations and either spending it or knocking down card debt:

$500B/yr may not sound like much in a $11T economy, but that injection funded TEN MILLION household incomes.
That hot money is GONE now. No more magic ATM. Without monetary intervention, we wouldn’t even have an economy now. THAT was largely why BAC was trading at $3 last March and the S&P 500 was in the 600s.
Worrying about “inflation” now is perverse. While Japan may not be a good model, their history 1992-2010 has demonstrated that macroeconomics is a bizarre beast.

Wow, you've really got this muddled now. Are you saying the increasing income disparity is entirely due to the fact that the wealthy get interest on their investments? That's a major oversimplification.

I don't know where you got the idea I'm "worrying about inflation". I said the middle class' wealth is being depleted and transferred to the wealthy, and that the interest on savings is less than the rate of inflation. That's not saying much, as you can only get 1% or so even in a premium savings account. You seem to have twisted my words into something entirely different.

I'm not sure if the rest of your post is supposed to be a response to me or what. It seems as though you agree with most of what I said, although your tone suggests that you don't think that you do.

?

gameisrigged says

Wow, you’ve really got this muddled now. Are you saying the increasing income disparity is entirely due to the fact that the wealthy get interest on their investments? That’s a major oversimplification.

Well, people who have their money managed professionally, and only taxed at 15% if that, are going to get richer, especially given the power of compounding interest. Also, the really big money returns are always in real estate, and since real estate has a cost of production of roughly $0, any profit earned in real estate (excluding use of capital) is pure money transfer from weaker to stronger hands (ie rent collection).

I said the middle class’ wealth is being depleted and transferred to the wealthy

What wealth is being transferred, and how?

and that the interest on savings is less than the rate of inflation. That’s not saying much, as you can only get 1% or so even in a premium savings account. You seem to have twisted my words into something entirely different.

The disagreement here I think is what inflation vs. deflation will do to the middle class.

The average 401K balance is under $100K, yet total household debt is well over $10T still, also just under $100K on a per household basis. The poor has no money, the middle class has no equity anymore.

I don't understand how money is getting destroyed now (I thought only the Fed could do that), but at any rate the previous decade set up the middle class with the necessity of having to increase its real income, given all the debt the middle class was allowed if not encouraged to take on.

This is not going to happen; much of the economic growth of the middle class last decade was simply fueled by this debt expansion (which means the middle class is in a precarious position now). But the bills are beginning to come due anyway, and the PtB have to figure out how to handle a several trillion dollar imbalance -- the trillions of USD our trading partners have, the trillions of dollars the medicare system is going to need this century.

The national fisc is shot to hell. Taxes need to be raised -- that's deflationary. Government spending has to be redirected if not cut by hundreds of billions of dollars a year -- that's deflationary. We need to reduce our dependence on oil, but can't.

Everything we buy is made much cheaper in China than we can make it here.

The Fed -> bankster skim is the least of our problems.

My friends reset was at a lower rate than his original 5/1. Someone here once said rates are headed to 0% like in Japan. I argue the cost of production for fiat is almost nothing so rates could easily head to 0%. As gov/fed continue the fiat bubble then entitlements in real value will continue to drop. So, yep, not only will the middle class be wiped out but the lower class too. The lower class just doesn't see it coming. They've been on the free ride so long they don't realize the train is now going backwards.

A coworker told me rates are still falling. The mortgage company raised an eyebrow when I told them i wanted a 5/1 a few months ago. Unlike them, I'm pretty sure rates will head toward 0%. That's a given when the system is a credit bubble. But it puts mortgage companies/CMO whatevers in a real bind. if they buy these 4% mortgages they will lose money. Inflation is only headed up and the sky is the limit. $1T is the new $1B and $1B govbezzlements are not even worth writing about in the news.

To bring the discussion full circle, we have a quasi government guy stating there was no housing bubble in 2003 and then in 2009 arguing to prevent anyone from knowing what his quasi government group was doing. That was the housing bubble. Now we have a Credit Bubble (Debt Bubble). Assuredly we have some similar to him saying the national debt is sustainable and the derivatives paper trade is sustainable and more. In 2016 will these same men argue to prevent the public from knowing how they blew up the economy?

We are smart guys. We know the only way to ride the inflation is to be on the earning side of it. We've bought hard assets and positioned ourselves so we can sell these at stratospheric prices in a few years. The only issue is with housing this may never materialize. Inflation will wipe out the middle class and stomp the lower class; so, the market for houses might not recover for a much longer time. IMO.