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Townhall
Finance
A Tale of Two
Recoveries
by Fritz Pfister
In a recent Frank and Earnest cartoon; as Frank leaves a bank he says
‘they aren’t paying interest on savings anymore’, and Earnest replies
‘the point of no returns’? There’s an element of truth in all good
humor.
Sad for seniors that there’s a massive amount of truth in that cartoon.
They are the generation who did their job, saved diligently, retired,
and now are forced to settle for little to no return on their savings
or risk it in the Wall Street casino. C’est la vie.
Seniors don’t realize the game is rigged by Bernanke’s ZIRP policy to
inflate another housing bubble. The main store of wealth for the middle
class who are the engine for the economy, is the value of their home.
Artificially raising home prices to induce the ‘wealth effect’ to get
consumers to spend, not save is the plan. It’s working, the savings
rate is at a five year low.
Interesting how the media is infected with all the good news regarding
housing. Every outlet was giddy with the news released this week on
home prices. Here is but one small sample.
From the Christian Science Monitor:
“The good news for the housing market just keeps on coming. The latest
report of the S&P/Case-Shiller Home Price Indices showed that
average home prices for 20 cities increased by 9.3 percent for the year
ending in February 2013. That same index rose 0.3 percent between
January and February of this year. It was the biggest annual increase
in residential real estate prices since May 2006.
“What’s driving prices up? Analysts point to lean inventories, low
interest rates, a rise in employment, and a drop in the share of
foreclosed homes (which typically sell at a reduced price).”
Odd they didn’t include the news from the day earlier when the bad news
was reported that the homeownership rate in America fell to the lowest
level since 1995. What is it with Obama trying to match or beat prior
Democrat presidents? He’s matched Carter on the workforce participation
rate (lowest since 1979) and now Clinton’s homeownership rate.
Amazing that story didn’t receive the banner headlines of the darling
Case Shiller. However if you look you can find some honest reporting.
Here is a sample from ZeroHedge:
As the US Census Bureau reported earlier today, the US homeownership
rates in the first quarter of 2013 dropped by another 0.4% to a fresh
18 years low, or 65% - the lowest since 1995…
Read the rest of the article at Townhall Finance
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