We were out and about in Chaco province almost the whole day visiting extremely poor families that had improved their lives with loans from the Grameen-style bank that we helped get started some years ago. If any American could visit these same homes they would be on their knees giving thanks that they are living in such a rich country, where a 35% decline in the real value of homes (as in the chart above) is considered to be an unimaginable catastrophe. The value of most homes in the poorer parts of Chaco wouldn't even buy a used car in the U.S., and yet the people we visited and spoke to were serene and optimistic. Quite a lesson in humility and perspective.
I wanted to post some photos from today but for some reason was unable to. I've got lots to say, but it will have to wait for later; we'll be back home in the USA this Friday.
As for the U.S., we've obviously taken a big hit, but it's far from being the end of the world, despite the numerous calls today for a double-dip recession in the housing market. In contrast, I'm confident that home values will recover and life will go on. The Fed is doing everything in its power to avoid a deflationary meltdown of the US economy, and I think you underestimate the Fed's ability to get what it wants at your peril. Plus, there are many more signs of an economic recovery than of a looming double-dip. Moreover, consider the chart below, which shows the value of an index of major home builders' stocks. If the market is at all capable for looking into the future, then things are really not that bad at all.
Amen to your observations. My wife is from Thailand, and when I visit backcountry and my wife's hometown there I get the same feelings you do.
ReplyDeleteHomebuilders were saved by lobbyist dollars and tax changes that allowed them to write down profit from the bubble years...
ReplyDeleteThis in itself shows how much fraud the govt. is willing to back....