Wednesday, November 18, 2009

Housing Starts EXPECTEDLY Fall Again

Once again, a myth we have hammered on for years - the Federal Reserve does not control the economy. Those blowing smoke about a recovery have one data point to support their claim. The Federal Reserve's involvement in bailing out criminal bankers. If monetary policy was the determinant of prosperity, we would never have a recession or depression. Credit can juice the system for some period of time but it is the American people who determine prosperity through their creativity and industriousness. Contrarily, politicians and central bankers more generally destroy creativity and industriousness through unintended consequences of their actions.

So, even though the Wall Street Journal reports housing starts unexpectedly fell, the question is who thought it was unexpected? Politicians and central bankers? I seriously doubt the engine of growth - the people of this country - thought it unexpected because they are filing bankruptcies in record numbers.

Something to think about..... For those who can't wait to take advantage of the Federal government's housing tax credit - aka Cash for Clunkers applied to housing - we wrote on here a long time ago (When the world was still partying) that housing prices could drop to 1995 levels. I still believe that is quite possible.
posted by TimingLogic at 9:32 AM