Dear readers - this article from July in the Economist is perhaps the most omniscient and important articles you will read this year. No, it is the most important article you will read this year. For those of you who read it, it will change your life. For if you own a home and you read this article and you don't react, then whatever happens to you, your family and your finances will be your doing. Good or bad.
You have been warned. Sorry to be so pointed. But it will pain me to read the pain on this site in a few months. Best of luck out there. My favorite line is: The housing boom was fun while it lasted, but the biggest increase in wealth in history was largely an illusion.
Perhaps the best evidence that America's house prices have reached dangerous levels is the fact that house-buying mania has been plastered on the front of virtually every American newspaper and magazine over the past month. Such bubble-talk hardly comes as a surprise to our readers. We have been warning for some time that the price of housing was rising at an alarming rate all around the globe, including in America. Now that others have noticed as well, the day of reckoning is closer at hand. It is not going to be pretty. How the current housing boom ends could decide the course of the entire world economy over the next few years.
November 11, 2005
Soaring house prices have given a huge boost to the world economy. What happens when they drop?
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1 comment:
Think about it. Let's say housing (I can't say this with a straight face) goes up another 10% in median price next year.
That would mean the rent to housing ratio becomes more out of whack, that more and more families wouldn't be able to afford a house, and that 8% interest rates had no impact on housing.
In other words, Mr. Wesbury is either 1) an idiot, 2) corrupt, 3) both
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