Does anyone question why housing prices increased nationally 11% year over year as reported last week? How could this be amidst such high unemployment? How could this be when American wages increased a mere 1.6% this year?
Where is the demand coming from? Where are the dollars coming from as more than a third of our housing is being paid for with 100% cash? Could it be that some of the trillions of dollars that have been pumped into the world to sustain the bubble are now coming home to roost?
Is it possible that even as Americans’ wages stagnate, being kept low by high unemployment, our cost of living will now begin to escalate wildly? Has our policy of quantitative easing finally begun to see the first noticeable leak in the dam?
In Darryl Schoon’s article:
He points out an extremely insightful context that Japan’s substitution of borrowing-based government spending to make up for the loss of private demand, while not repairing their economy, did hold a deflationary spiral at bay, but only because its economic implosion occurred during an historic, credit-derived spending bubble of EurAmerica that supported Japan’s export strategy.
He also points to the obvious conclusion that the worldwide bubble has run its course and has exhausted its ability to maintain world pricing. Therefore, Japan’s strategy will no longer work and the world that has embraced Japan’s solution is now in for an abrupt awakening. Darryl now suggests that we could experience an extreme depression while experiencing extreme inflationary pricing simultaneously, a stagflationary depression.
Housing prices up 11%…..