The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: JF Quinnelly who wrote (17520)	2/18/2004 10:00:12 PM
From: Elroy Jetson	Read Replies (2) of 306849

The Fed can still lower interest rates by 1% to zero. More to the point 30 year fixed mortgage rates are currently 5.58%. Japan pioneered a welfare program for home buyers which makes 30 year fixed mortgages at rates as low as 2% by bypassing the banking system and making the loans directly from the government Home Lending Corporation. So even though incomes in America are declining, home prices can be made to rise by bringing mortgage rates down from the current 5.58% to 2% by emulating Japan's massive welfare program. I fully expect this to happen. Asset Inflation is providing the only major support for consumer spending in America and the Fed cannot allow this to end without triggering economic depression like conditions. A Japanese style welfare program is also culturally consistent with America's free market subsidy economy. Being unwilling to accept economic down-turns, the government increasing subsidizes free market activities. The list begins with farming, real estate, and pharmaceuticals, and ends with a roll call of most business in America. The end result will be decades of stagnation.

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