Saturday, August 2, 2014

Can you spot the pattern?

Look at the red line, inflation adjusted home prices from JParson's real estate blog. Look carefully, you might spot the ups and downs. Since 1975, these housing cycles have happened about every 8 or 9 years. They follow the interest rate cycle.

Why does the interest rate cycle?
Because at the end of every presidential term a load of debt comes due, its called roll over the debt. Notice the Bubba Clinton avoided the problem.
Anyway, home builders all know this.  It is no secret that Obama and his Keynesian advisers have to roll over some 8 trillion in debt, plus a bunch left over from the Republican Communist Party. Can Obama and the Keynesians pull this off while borrowing an extra 2% of GDP to pay for Obamacare? No, they are lost and we will have are regularly scheduled recession.

No comments: