Well, the long-awaited housing double-dip is now.
So what went wrong? Why has the Fed’s money printing created huge inflation in stocks, commodities, food, and energy, but not houses? What separates houses from other speculative assets?
Answer: house prices are supported primarily by incomes, while other assets are bought by speculators using cash and leverage. The Fed has flooded the banks with money at 0% interest allowing the banks and their customers to have a speculative orgy in every asset class. Stocks, gold, silver, agriculture commodities, etc., are all up double digits — some of them BIG double digits — year-over-year.
But housing prices are not set by speculators playing with free money from the Dirty Fed. They are set by families who are limited by their ability to meet the monthly mortgage payment. And Bernanke’s party for Wall Street hasn’t done a damn thing to help working families.
Epic FAIL, Bernanke. You just drove up the cost of food, gasoline, and home heating oil, but you didn’t create any employment or increase any wages. Unless your plan all along was to enrich the bankers at the expense of working families.