Home prices to collapse again: Peter Schiff

Home prices to collapse again: Peter Schiff

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By N2H

house for sale sign
The longer the government continues to distort the underlying economics of the real estate market, the longer it will take for the sector to heal itself – and the longer the sickness will infect the broader economy.

The United States is in a very precarious situation. Obamarama needs the Fed to print up another 1.9 Trillion dollars this year. The Fed has already bought up a huge amount of questionable mortgages and is holding them from market. Also besides that, the US is shooting themselves in the foot by pissing off China, who traditionally has been buying US Treasury Bonds and Mortgaged Backed Securities. If they do not continue to do so, the US may be in some very serious trouble.

mortgage chart second housing crash

The second wave of the predicted double dip recession is about to happen. The only thing that will fend that off, is the American involvement in a new war, ie Iran, by the way, arms and munition sales have hit records worldwide, not generally reported in the mainstream media. Largest arms producers, US, Russia, Germany, and France. US supplies Israel, Saudi Arabia amongst many others. Russia supplies Iran and China, amongst many others. This industry is not generally included in any economic discussions.
Peter Schiff: ‘Very good reason’ to believe home prices will collapse

The following is an opinion piece written by Peter Schiff, president of Euro Pacific Capital.

The latest housing initiative announced today by the Obama Administration draws the U.S. government and, by proxy, all taxpaying Americans, further into the inescapable quagmire of a devastated real estate market.

By transferring more underwater mortgage balances onto the public books, the plan puts taxpayers on the hook for further losses if housing prices continue to fall. Given the massive support for real estate already afforded by record-low interest rates and massive federal tax and policy incentives, there are very good reasons to believe that home prices will indeed collapse when these crutches are removed. Recent spikes in long-term interest rates warn of this prospect.

If the Administration had allowed losses to fall where they rightfully belong, namely on those who foolishly loaded up on toxic mortgage bonds, then the housing market would have already found its true clearing level. Instead, every measure is working to prolong and delay the ultimate reckoning, while setting up taxpayers as the patsy. Given the horrendous government deficit projections for the next several years, any losses incurred by thegovernment mortgage portfolio may add a critical stress on America’s fiscal viability.





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