Friday, February 8, 2013

Pit Boss Bernanke Oversees 27% Rise in Las Vegas Home Prices

By, Chris Rossini

Please....Just One More Boom...

Real wealth and productivity come about when you work, satisfy consumer desires, save, invest, etc.

Unfortunately, the dominant ideas that guide policy in the U.S. center around the idea that wealth can be created out of a printing press. It's going to have to die hard, just like the idea of a flat Earth had to die hard.

Today's Grand Master of Illusions is Bernanke, and he's creating digital dollars at a rapid rate. (For a closer look on Bernanke and The Fed, make sure to subscribe to The EPJ Daily Alert). The helicopter money is pouring into the economy and having an effect on prices, both in the stock market and the housing market.

Here's an example from The Las Vegas Review Journal:
Home prices in Las Vegas jumped 27.1 percent in January, picking up where they left off last year as the inventory of homes available for sale remains tight, the Greater Las Vegas Association of Realtors reported today.
Wealth Effect mentality is also prevalent. Here's Dave Tina, president of the Realtors association:
"Everybody wants pretty," Tina said. "It could be a $50,000 condo or a $100,000 house. Everyone wants a beautiful floor, granite counters. Why are flippers doing so well? It has new granite and new paint and it's pretty. The ones that aren't selling in this market aren't pretty. They're dogs."
Yes, he mentioned that bubble term "flippers".

Local government is also doing its part to help distort the market:
Assembly Bill 284, the robo-signing law that took effect in October 2011, continues to delay the foreclosure process and keep inventory at low levels.
So like a dog chasing its tail, Americans and their authorities are chasing the illusions of the past, by making the very same mistakes of the past.

When the bubble is eventually popped, expect tear-jerking homeowner stories from the media, a cry for stricter regulations, white-collar executives in handcuffs, the Fed Chairman testifying that he needs more powers, and Paul Krugman calling for more money printing to get things rolling again.

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