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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (24952)	11/1/2004 6:11:55 PM
From: John Vosilla	Respond to of 306849

Amazing people compare today to the situation coming out of WWII. You are so right. In 1950 we had 20 years of pent up demand for housing due to no new construction and very low birth rate during the depression and war. Add in autos, television, phones and access to credit as a part of the daily life in middle class America and a spending boom was unleashed. Today we are at the complete opposite of the spectrum. In many ways it could be worse than Japan. They at least were savers. <Back to the 1950s. Once the pent-up purchases not made during the war were made in the post-war period, spending slowed - so much so that Eisenhower was concerned, shortly after becoming President in 1953, that the economy might fall back into the pre-war depression. Horribly mistaken in my opinion. He called the heads of large consumer good manufacturers to the White House and urged them to extend credit to potential buyers. This was the same period, 1950, which saw the introduction of the first credit card Diner's Club. This cardboard card could be used by businessmen to pay for meals. The list of restaurants which accepted the card was printed on the back. These and other innovations added convenience and rolled future demand into the present. Businesses ring-up sales from years into the future today. All quite magical. But the inverse side of the magic happens when additional debt cannot be added. Then you experience an economic depression as de-leveraging occurs - or at a minimum the grinding economic stagnation of a Japan where the debt is paid down over a period of decades characterized by subnormal demand.>