Don't Buy A House Right Now

When the housing market was going up, I began telling people to stop buying houses. The market was not following the proper trends in design, pricing or location. Recently I have written about the intentional housing bubble in England. They are trying to get the suckers into the game again in America.

Yahoo - Reuters - U.S. pending home sales end slide, hint at stabilization. There are too many propaganda pieces coming out right now for me to ignore them. This article talks about how housing stats are improving; but, it is wrong. Improving for whom? One of the first things the article points out is that house purchases had been lower because of interest rates; but, this is complete and utter nonsense. The difference between taking out a 30 year loan at 3 or 4% did not stop anyone other than completely marginal buyers from buying a house. Most people pay considerably more on their car and credit card loans.

The next garbage we are told in the article is that employment is improving. Hey, wait weren't we told that Obamacare has stopped companies from hiring by Reuters also? People who stop getting unemployment and still don't have a job stop showing up in the numbers counted as unemployed. 1.3 million are just about to drop off and stop being shown as unemployed; but, the number of people employed has not increased.

Yahoo - Wall Street Journal - Home Prices Back at Peaks in Some Areas. Again, more nonsense. The housing market has not and will not recover for a long time. In fact, real prices will drop. Let us consider a possible scenario.

Lets say that the world goes of the dollar standard. It already has; but, the transition is slow to be noticed. The BRIC nations are no longer trading with each other using dollars. Eventually, all the dollars they used to hold will be spent in the United States. They will be spent on high end objects and property and that is already going on. Printing more dollars might pay off our foreign debt; but, then they will just give foreign countries more opportunities to buy our properties and businesses at wildly inflated prices. Increasing the amount of dollars or debt to foreign countries means they can buy all of ours. Still, it all comes down to who owns the asset in the end. Remember, we "loaned" billions and billions of dollars to Europe in exchange for Euros. We gave billions more under TARP to foreign countries.

When you were a kid, you may have played Monopoly. The game is won in the end by the one who has the highest priced properties. You just suck the others dry. It does not matter who has the most cash, what matters is who owns the most and best assets.

Now, the hedge funds may believe they will just rent out all the properties that they have bought and that is one of the reasons that they have inflated the market; but, you cannot raise rents above the affordability index like you can sales prices. In the end, math is just math. If I have to choose between eating and having a home, I will eat.