As the leading US economists look ahead to the future, they see one glaring obstacle standing in the way to lasting recovery: the still, defunct real estate market.
And, according to many mainstream experts, there is one surefire way to turn the housing sector around: government stimulus, stimulus, and more stimulus. Here, we have the following January 19 Bloomberg headline:
The article goes on to write:
"Three Federal Reserve policy makers said the US government should try new ways to spur the housing market. Additional housing policy interventions can help boost growth."
There's just one problem: The comatose housing market and the U.S. economy as a whole have undergone more life-saving procedures -- organ transplants, cash transfusions, and countless rounds of Credit Pulmonary Resuscitation -- than ashen rock star Keith Richards. Here's a laundry list of said procedures between 2008 and 2011:
- President Barack Obama's initial $825 billion Economic Stimulus Package passed in January 2009
- The untold billions of dollars shelled out by central banks in their purchase of defaulted mortgage-backed securities
- A 2008-9 $8,000 to $15,000 tax credit for first-time home buyers -- deadline extended
- A slew of outrageous homebuilder incentives such as free pools, Caribbean vacations packages, and total coverage of closing costs
- The cheapest mortgage rates in decades
- And TEN reductions of the Federal Reserve's interest rate to a record low of .25% to 0%
Still the housing market remains unresponsive. A January 19 report revealed that starts of single-family homes just plunged to a new, all-time record low.
In the brand-new January 2012 Elliott Wave Theorist, EWI president Bob Prechter addresses the futility of the Fed's efforts to re-invigorate the housing market. Here, Bob presents the following chart of the S&P Case-Shiller Composite home price index and writes:
"The debt burden overhanging the housing market -- 87% of which was underwritten by government enterprises -- is keeping prices down. Even the Fed's massive inflationary policies; the huge increase in government debt, the 100% gain in the S&P stock index, and two-and-a-half years of economic recovery since 2009 have been unable to budge home prices."
In the new, January Elliott Wave Theorist, Bob Prechter goes on to show you the "more interesting, long-term picture" of REAL home prices (versus nominal ones) since the 1800's. Here, Bob shows you how "home prices in real terms are right back in the range they inhabited for 200 years prior to 1997" -- when the housing mania took off.
Prechter's January 2012 Theorist then shows you whether or not real estate is, once again, positioned for another spectacular take-off. You can have it on your sceeen in minutes via the special offer below.
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