Feb 15 2014

When the housing market is owned by Fed banks: Federal Reserve went from holding zero in mortgage-backed securities to over $1.5 trillion.

There are significant consequences with the Fed continuing on course with Quantitative Easing.  On paper, it may seem that all is fine on the home front.  However, many regular Americans are finding it harder to purchase a home in spite of a low interest rate environment.  The Fed has created perverse incentives where big banks […]

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Oct 18 2013

Blue pill of debt exchanges temporary increase in debt for inflation: Taking the blue pill of a fabricated world addicted on debt as US standard of living hits 10-month low.

Most of you have seen The Matrix where Neo is given the choice between taking the blue or red pill.  The red pill would allow Neo to escape The Matrix and enter reality whereas the blue pill would allow him to stay wandering in the fabricated world of the Matrix.  The US government in essence […]

Aug 5 2013

Failure to launch into household formation: Record 36 percent of young Americans (18 to 31) living at home with parents. Where is household formation coming from?

The notion that the housing market is surging because of young Americans buying up homes to form households is simply incorrect.  The housing market is rising like an artificial phoenix built on Wall Street’s insatiable appetite to leverage easy money from the Fed and investors.  If we look at data regarding young household formation we […]

May 28 2013

Why inflation matters: How the Fed is creating real estate inflation and hiding behind inflation data to continue their expansionary ways. OER and Case Shiller divergence.

Inflation matters.  It matters a lot.  Contrary to what you may hear in the mainstream press the Federal Reserve has done everything to stoke the fires of inflation.  The reasons for this include creating asset inflation that is understated in CPI data and also setting up a system where consumption is almost forced upon consumers.  […]

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