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The median price of US homes will fall "at least" 50% from the top!!! Wow! I’m reading a book that opened my eyes further to my 50% housing decline theory. If you look, I've been real quiet for a few years, up to now. During that time, I've sold my primary residence, but still own a rental that brings positive cash flow (as of now at least). Up to today, I really thought I was crazy! Two years ago, when I charted the home prices in our area and found that the home we were living in should be 50% lower, I pretty much freaked out! My chart looked like some crazy man’s prediction that couldn’t possibly pull through in the future. Never in history has the US seen such a decline that would warrant a home in *** California to go down 50%. I was being told that housing is always a good bet! It will always go up in value. I knew such statements couldn’t be substantiated and when I asked why, nobody could give me a solid reason. I’ve heard everything from California is the place to live (more people moving in than out) to the US’s population is only getting larger and so on. It’s obvious that I and the people telling me these things were not the only ones who knew this data. This wasn’t top secret info that was privy to a select few. Everything imaginable is already built into the current price of homes, including the future. In regards to this, taking everything into consideration there must have been some reason that the homes in my area have tripled in 7 years. The only thing I could deduce was that greed was the highest factor in the equation. I’m not blaming the layman, or talking about the greed of any home buyer. It sure wasn’t completely the subprime buyer’s fault. Their circumstances warranted some of their irrational decisions. On one hand they were greedy but greed wasn’t 100% of their case. It’s always been an American dream to own a home and I can personally tell you how crappy it feels to rent from someone else’s American Dream. I’ve done it before when I couldn’t afford a home and I’m doing it now that I believe we are headed for a crash! Many good people were offered something they should have ever taken! In other words, many people who normally couldn’t have afforded a home were offered a loan to purchase one anyway. I say this and it’s probably now obvious to you. In the short run it will hurt them. But at least many who would have never had the opportunity, got the taste of the American Dream. At least they were able to own a home for a while even though they shouldn’t have been able to financially. Maybe they can look at it as something to strive for because they now know how good it feels! If they stay the course and work hard, it won’t be long until they can truly afford what they tasted. It’s not the end for them and next time, most likely, it won’t cost them as much (financially & emotionally)! But it goes further and there is a deeper subject hidden inside what is happening right now! I’m not talking about the greed of people who make enough money to purchase a home or even two. I’m not even talking about the few smart people who saw this opportunity coming long ago and currently own a few too many homes right now. I’m talking about greed, an entity which is even higher than Greenspan (the world’s highest position in economy). Something which is much further up the profit chain which has been in control. Even controlling Greenspan himself. Ironically I used to hate Greenspan! I saw him as some pampas aristocrat who wouldn’t even speak simple English because he felt superior. In reality he acted and spoke differently because he was forced to. He purposely created his Greenspan jargon so he wouldn’t have to answer “the question” directly. This was ingenious!!! He knew that his every move was being watched with a microscope. Therefore, he has known for a long time that the US economy is in dyer straits. This is why he spoke the way he did. His answers were vague so the listener would hear what he/she wanted. Therefore not being responsible for the start of mayhem. He even became more vague when questioned further on any one sensitive subject that could potential damage. He personally protected the people his entire way! I talk like I’m now backing Greenspan up because I read his book. I am backing him up, but I haven’t read his book. I did purchase it last night and it is next on my list. The book I’m reading doesn’t have anything to do with Greenspan, although mentions him. I try to soak up everything from all resources and make “my decision”. I don’t need to back Greenspan up. I won’t profit from it anyway. I just see a man that reminds me of someone I once knew. An electrical engineer who once designed the first lens that went to the moon with Armstrong. A man I once hated, but grew to love and highly respect, even now after his death. It was something Greenspan said a couple years ago that trigger my interests. It wasn’t only what he said, but how he said it. He said, Those who are not prepared will get burned! A pampas aristocrat does not use this type of street language. I knew that Greenspan always could speak English (if he wanted). When he said it, I knew right then he was speaking “literally” to everyone on purpose! I understood what he was saying, it was regarding home prices and going out to get a more stable loan. What I didn’t understand is why he spoke so clearly and threatening. What I also didn’t understand was that he finally said something in plain English that was of great importance, yet the media didn’t understand what he was saying. It’s ironic that he finally spoke normal and even the layman didn’t hear it. Just as he purposely spoke his “Greenspan Jargon”, he purposely spoke directly to everyone willing to listen. Don’t forget that he held the most influencing position of the US’s economy, maybe the world. The media was so focused on how he walked and how thick his briefcase was as he approached Fed meetings. They overlooked what was truly important. This was a perfect example of someone so focused on looking at a tree, they don't even realize they're in a forest. You must remember that if you could download Greenspan’s mind, you would unlock and see many problems of our economy! I believe Greenspan now feels guilty. I can see it clear as day! I hope he understands that there was nothing he could have done other than prolong what will happen anyway to our economy. What people expect of him is too great and impossible of a task. I hope he realizes that for his sanity. He could not control human nature. It was just too big for one human. He did a great job so I take my hat off to him! We are way overdue for a decline. Add the forces that hit us on 9/11 as a nation, they are too evil and don’t play by the same book. It didn’t matter who was sitting as chairman on the FOMC. That job was impossible! I could only imagine the sleepless nights he and his wife encountered. The man is extremely rich. He didn’t relax in his bathtub writing his book for money. He did it to release his personal vise and try to help us out. Again, I haven’t read his book, but I can guarantee that he gently and professionally warns us of a possible financial crash. I believe he will do the US more good now than he did before as chairman. This is because he will be more open and speak clearly, guiding what ever way he can. Albeit criticized the entire time, I believe those willing to listen will only prosper from his wisdom. He was a man of high position, but higher now because he is now able to tell the truth. But this won't last forever. He will probably get frustrated because ultimately he alone can't change what is happening. But he can help those willing to listen! If there is a mentor for finance, he is it. I personally will look at him as a mentor for my finances. I’ll keep in mind what he says while protecting my nest egg alone the way. I hope that the daytraders, like myself, will do the same. Bex P.S. I would like to discuss the possibility of a 50% housing decline here. Bears & bulls are welcome! If you have any information or research (pro or con) it will be much appreciated so please post it or reference a direct http to the data, not just the website. | ||||||||||||||
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