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cube
Fusion
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Joined: Mar 12, 2005
Posts: 3353
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 Posted: Sun Jan 29, 2006 6:18 pm Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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| jaws wrote: | | The dollar has lost 95% of its value since the gold standard was abandoned. Do you think these people give a crap about devaluation? They live in morbid fear of deflation. |
I agree that central bankers will inflate the currency. However it is a delicate balance. The objective is to inflate the money supply so they can rip us off but not do it so quickly that we catch onto their scheme.
Of course ultimately this is a futile attempt. It is the fate of ALL paper money to crash....it's just a matter of when?
Getting back to interest rates I believe they can go up. Historically speaking 4.5% is NOT a high rate. Some may argue that Helicopter Ben will NOT raise rates becuase it will cause a recession. I believe a recession is inevitable regardless of what happens. |
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Snowrunner
Heavy Crude
Joined: Aug 24, 2005
Posts: 290
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| Posted: Sun Jan 29, 2006 6:57 pm Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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| cube wrote: | | America has a choice. Do we wish for the dollar to remain as the world reserve currency? There's only one way to ensure this and that's to raise interest rates. |
Um, I hate to say this, but the Dollar is also a politicial instrument. Sure a rising interest rate will have people invest ment into the USD, but China and Japan alone hold vast amounts of the USD.
There is a decent chance that China or Japan one day won't prop up the USD anymore, or in fact, pull the trigger.
Right now neither Japan or China have anything to win by doing this, but in a couple of years China may not need the US anymore as much as they do it now (as a dumping ground for cheap and not so cheap products).
The Euro may just proof a good alternate currency. Never forget, half of all is politics. |
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Revi
Fusion
Joined: Apr 25, 2005
Posts: 3111
Location: Maine
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| Posted: Sun Jan 29, 2006 8:31 pm Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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| TommyJefferson wrote: | | Phil wrote: | | Let's say I wanted to buy some land in central Texas, 20-50 miles outside of Austin: 5 to 10 acres, good soil, historically sufficient rainfall average, decent demographics. |
Your time may soon come.
Last week I drove from east Texas to Austin and back. (Elgin, Caldwell, Bryan, Crockett).
I've been running that route for 20 years. I have NEVER seen so many properties for sale. I couldn't ride more than 2 miles without seeing a "For Sale" sign. These were very nice rural homesteads like you describe.
I believe these people are aware the housing bubble is beginning to deflate. I believe they are trying to cash out while they still can. |
I have been looking for a good woodlot around here for a couple of years. Here in Maine the last thing that anyone would part with is a woodlot with marketable timber on it. It's like money in the bank, but better, because the trees keep growing. Even in the most forested state in the nation it has been very hard to find a good woodlot. Lately I have been seeing some nice ones showing up in the paper. What's going on? |
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Gary
Heavy Crude
Joined: Jan 07, 2005
Posts: 139
Location: Mpls, MN, USA
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| Posted: Sun Jan 29, 2006 10:45 pm Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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I get the impression that there is a consensus amoung posters that there has been a housing bubble and that it is deflating. The questions are:
1. How fast will the bubble deflate?
2. How much will the bubble deflate?
3. How will the Fed react and what implications will that response have?
Is this pretty close? Are there better ways to state an interpretation of the housing market, or better questions to ask?
_________________
pedaling for peace and ecojustice -- Gary |
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Free
Light Sweet Crude
Joined: Nov 28, 2004
Posts: 1353
Location: Europe
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| Posted: Sun Jan 29, 2006 11:49 pm Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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| Gary wrote: |
1. How fast will the bubble deflate?
2. How much will the bubble deflate?
3. How will the Fed react and what implications will that response have?
Is this pretty close? Are there better ways to state an interpretation of the housing market, or better questions to ask? |
No those are the right questions and they are very easily answered:
1.) At a measured rate.
2.) For a measured amount.
3.) They will react measuredly and will have a measured response.
_________________
"Democracy means the opportunity to be everyone's slave."
Karl Kraus |
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TommyJefferson
Light Sweet Crude
Joined: Aug 19, 2004
Posts: 1677
Location: Republic of Texas
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| Posted: Mon Jan 30, 2006 8:10 am Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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| Revi wrote: | | I have been looking for a good woodlot around here for a couple of years. ...Lately I have been seeing some nice ones showing up in the paper. What's going on? |
Timber prices are tied closely to the residential construction industry. Softwoods are used for structural elements and "engineered" wood products like plywood and siding. Hardwoods are used for mouldings and ornamentals.
When new home construction trends downward, so does timber. Low interest rates and sub-prime lending have probably created a lot of excess inventory in the housing market. Less new houses need to be built.
Perhaps the people holding timberland know the long term trend for timber prices is downward and they wish to get out.
_________________
Conform . Consume . Obey . |
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TommyJefferson
Light Sweet Crude
Joined: Aug 19, 2004
Posts: 1677
Location: Republic of Texas
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| Posted: Mon Jan 30, 2006 8:18 am Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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Another factor is that I'm seeing many Baby Boomer age people beginning to finance their new retirement by liquefying assets their now dead parents left them.
That means selling off land and selling that old AT&T stock Pop left them. Also many are downsizing to smaller homes in town now that their kids have become adults and moved out.
_________________
Conform . Consume . Obey . |
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Revi
Fusion
Joined: Apr 25, 2005
Posts: 3111
Location: Maine
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| Posted: Mon Jan 30, 2006 1:14 pm Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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| TommyJefferson wrote: | Another factor is that I'm seeing many Baby Boomer age people beginning to finance their new retirement by liquefying assets their now dead parents left them.
That means selling off land and selling that old AT&T stock Pop left them. Also many are downsizing to smaller homes in town now that their kids have become adults and moved out. |
I wonder how many of those woodlots and stock assets are being sold to keep the payments going for their yukon xl and the four snowmobiles they bought with no money down. All those gasoline burners are going to eat them. |
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TommyJefferson
Light Sweet Crude
Joined: Aug 19, 2004
Posts: 1677
Location: Republic of Texas
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| Posted: Mon Jan 30, 2006 7:52 pm Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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| Revi wrote: | | All those gasoline burners are going to eat them. |
For the Boomers I know, the toys are a minimal expense. What is really burning through their inheritance is health insurance premiums, home upkeep, and escalating university costs for the kids.
_________________
Conform . Consume . Obey . |
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cube
Fusion
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Joined: Mar 12, 2005
Posts: 3353
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| Posted: Tue Jan 31, 2006 5:55 pm Post subject: Re: U.S. Housing prices DOWN 4% in 2005!!!! |
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Update 10: Fed Ups Interest Rate; Another Hike Likely
| Quote: | | At Greenspan's final meeting, the central bank voted to boost its target for the federal funds rate to 4.5 percent. It was the 14th quarter-point move in a credit-tightening campaign that began 19 months ago. |
I think that sums it up pretty well. The easy money gravy train just got derailed. Without cheap credit the days of making money by flipping condos like pancakes are OVER.
Also take note the title Another Hike Likely....looks like 2006 will be the year the housing market goes south.  |
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