Tuesday, December 11, 2012

U.S. Construction Hits 37-Month High

Ben Bernanke's mad money printing is making its impact.

Analysis of October's construction spending patterns by the Associated General Contractors of America found ongoing building expenditures running at a $872 billion annual rate. That's up 9.6 percent in a year – and the highest level of activity in 37 months.

Residential efforts ran especially strong: New single-family construction hit its highest mark since November 2008; multifamily construction hit a three-year high; and home improvements ran at a five-year high.

This is all a Bernanke manipulated boom---next stop price inflation 2013. All indications are that a perfect storm of price inflation is developing for 2013. Then what is the Fed mad man going to do?


  1. I hope that if your timing is off people don't lose sight that your theory is spot on.

  2. "Then what is the Fed mad man going to do?" -- Retire.
    i.e. Cushy job at Goldman Sachs or college professor somewhere.

    1. Or/and write a book about what a good job he did.

  3. http://www.bloomberg.com/news/2012-12-12/bernanke-critics-can-t-fight-bonds-showing-no-inflation.html

    Bond vigilantes see no inflation

  4. I am riding the multi-family construction tsunami in northern California (in what I am calling the new fertile crescent--from Fremont around San Jose, Santa Clara and up the peninsula to Redwood City). As a trade subcontractor we were nearly bankrupt a year ago with only one project on the books. Now we have 14 projects booked for $30+ million. Only things I have learned here at EPJ and at mises.org keep this in perspective for me and I have personally prepared myself. Our only struggle is how to take advantage of this huge influx of work without over investing in capital so that we can scale back when the crash comes. It seems several times a week, I have a conversation with someone in the industry who says "looks like the economy is finally getting better" and I have to remind them that we are just in another bubble.

  5. Also, material costs for our trade is set to go up 30% in January and 15% again every quarter in 2013.

    A common mindset in the construction industry is that this is a good thing: when material costs go up across the board, we just make more profit at the same percentage. It's hard to convince someone to look at the long term and show them that increased construction costs will only deter developers and lenders from building.