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The Global Housing Boom: In come the waves (a cautionary tale)
The Economist ^ | 06/16/2005

Posted on 09/21/2006 8:02:27 PM PDT by GodGunsGuts

The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops

NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000. What if the housing boom now turns to bust?

According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.

(Excerpt) Read more at economist.com ...


TOPICS: Australia/New Zealand; Business/Economy; Japan; United Kingdom
KEYWORDS: 2005article; bahog; comedyhour; depression; despair; doom; dustbowl; grapesofwrath; housing; housingbubble; lieabouttheagenda; whataretheyselling
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To: durasell
RE: Post #236

Credit card debt should be $800 billion. Not $800 million.

TGIF!

241 posted on 09/22/2006 3:08:26 PM PDT by Mase
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To: Mase

Probably more...


242 posted on 09/22/2006 3:09:31 PM PDT by durasell (!)
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To: durasell

Prove it.......


243 posted on 09/22/2006 3:10:10 PM PDT by Mase
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To: durasell
Uh, we do have to pay it back and pay interest on it.

Uh, no we don't. They have a pile of $20s. That's not debt. If they loan it to us (invest it in America) then of course we have to pay it back. That's not what the goldbug idiot article was talking about.

244 posted on 09/22/2006 3:15:26 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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To: Toddsterpatriot
. . . the goldbug idiot article . . .

But you repeat yourself . . .




;OP

245 posted on 09/22/2006 3:18:25 PM PDT by Petronski (Living His life abundantly.)
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To: Mase

Just google "credit card debt trillion"


246 posted on 09/22/2006 3:18:31 PM PDT by durasell (!)
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To: Petronski

Sorry, long week :^)


247 posted on 09/22/2006 3:18:58 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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To: Toddsterpatriot

Yes, yes, they're "investing in America." That's great. From another perspective, they are buying America. Not so great.


248 posted on 09/22/2006 3:22:27 PM PDT by durasell (!)
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To: Toddsterpatriot

Did you see up thread the face of Au, the shiny metal god?


249 posted on 09/22/2006 3:23:31 PM PDT by Petronski (Living His life abundantly.)
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To: durasell
Uh, we do have to pay it back

Pay what back? If I buy a DVD player made in Japan at Best Buy, and pay with cash, how is any debt created? The Japanese can use those dollars to buy goods or services from us or invest in our economy. How does either create debt?

Right now America is a debtor nation.

According to a study by Ricardo Hausmann and Federico Sturzenegger, of Harvard's Kennedy School, the current-account deficit is a statistical illusion. They found that the net return on the U.S. financial position in 2004 was a positive $30 billion and not much different than it had been in 1982, despite 22 years of current-account deficits. When factors such as insurance, know-how, and the value of universally recognized brand names like McDonald's, Disney and Coca Cola are counted, the U.S. becomes a net creditor, not a net debtor, nation.

The rate of return on our liabilities is much smaller than the return on our assets. Foreigners willingly accept a lower rate of return by buying our Treasury bills because they desire currency stability, liquidity, and a safe haven against political and economic risk.

On the other side, our investments overseas earn a much higher rate of return. When these higher rates of return are included in the calculation, as shown by the chart above, it becomes clear that the U.S. is a net creditor nation

250 posted on 09/22/2006 3:25:21 PM PDT by Mase
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To: durasell; Mase
And since using a credit card is so easy, Americans are swiping plastic at a fast pace. Total U.S. consumer debt reached $2.35 trillion in July -- an average of almost $8,000 for every adult and child in the country. That doesn't include mortgages -- it's just car loans, boat loans, snowmachine loans, credit cards and such. The credit card portion alone is in the $800 billion neighborhood, or about $2,700 per American.

It's time to pay the bill

251 posted on 09/22/2006 3:26:15 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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To: durasell
See, we didn't have to do anything to "make up" that deficit. The holders of dollars managed to invest it all on their own.
252 posted on 09/22/2006 3:27:25 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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To: durasell

253 posted on 09/22/2006 3:29:16 PM PDT by ovrtaxt (We gotta watch out for the Hellbazoo and the Hamas...)
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To: Petronski
Awww, he's cute. Or should I saw Au, he's cute?

How can you tell the difference between a secular bull and an ecclesiastical bull?

254 posted on 09/22/2006 3:29:34 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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To: woofie

You can't fool me. That a density/pressure map of housing prices. The east coast/left coast spikes are the tipoff.


255 posted on 09/22/2006 3:31:56 PM PDT by sphinx
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To: durasell
Just google "credit card debt trillion"

I found this when I googled "credit card debt $800 billion":

What happens if I google "American households own $4.3 trillion in time deposits and savings accounts"?

256 posted on 09/22/2006 3:31:59 PM PDT by Mase
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To: Mase
What happens if I google "American households own $4.3 trillion in time deposits and savings accounts"?

I think this comes up:

Durasell was wrong!

257 posted on 09/22/2006 3:39:22 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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To: Toddsterpatriot
Speak for yourself, Toddler. You and your like-minded fiat fanatics at the FED are one of the reasons gold is going to the moon.
258 posted on 09/22/2006 5:00:19 PM PDT by GodGunsGuts
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To: Toddsterpatriot

I maybe wrong. They don't call economics The Dismal Science for nothing.

That said, I would strongly encourage you to follow your best instincts when it comes to the economy and invest accordingly.


259 posted on 09/22/2006 5:22:08 PM PDT by durasell (!)
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To: GodGunsGuts
Speak for yourself, Toddler.

Huh?

You and your like-minded fiat fanatics at the FED

I'm not a fiat fanatic. A very small portion of my portfolio is in cash. And none of my cash is margined.

260 posted on 09/22/2006 5:31:31 PM PDT by Toddsterpatriot (Goldbugs, immune to logic and allergic to facts.)
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