The Washington Post has a housing article worth reading today -- [alleged] mortgage fraudsters in Fairfax County are busted:
"Deeper investigation uncovered the biggest mortgage fraud scheme in Fairfax history, officials said Thursday, and squads of officers arrested 20 people involved in allegedly cheating local banks out of more than $9 million."
. . .
"The family of Ruben Rojas, 30, of Vienna, a real estate agent who in recent years worked for Fairfax Realty and Proplocate Realty, is alleged to be at the heart of many of the transactions, according to a 37-page federal indictment unsealed Thursday. Rojas is charged with conspiracy and nine counts of fraud."
5 comments:
Cara,
Cool stuff about the gold article. I'll have to bookmark that one. I would argue rather than gold/housing being overvalued that it is approx. fair value . . . i.e. ignoring momentum and current conditions it appears reasonable.
However, you have to remember a couple of things. Gold was in its 7th year of a 20 year slumber. It went from 850 in 1980 to 290 in 1982 to 500 in 1988 to sub 350 in 1990. Interestingly enough from '88 to '95 the ratio stayed the same even though gold fell (i.e. housing fell too).
I think for a real comparison that chart needs to go back another decade or to '73ish. I think what the charts will show is that gold is not overvalued, it's about right. However, as we know about markets due to the Fed, we will have a bubble somewhere, I happen to believe it will be in gold (eventually). That's why I'll still buy, it's still at a decent value. Stocks are not, and housing will become undervalued and it is not undervalued yet. Anywho my 2 cents. Thanks for the article!
If the Fed didn't have unlimited power to print, I would believe you contrarian. Their ability to print is only limited by the ability of people to accept debt (see China and Japan), once those countries decide not to accept debt the Fed will keep printing . . . until they crash the dollar.
If the Fed wasn't printing, you would be absolutely right and we would have a massive deflationary environment. MBS purchases, TARP, etc. would have never existed if they weren't printing.
Think of it this way x (money) + y (credit) = money supply. x - y is what would happen w/ no intervention. x - y + b (monetizing, printing, mbs, etc) is what IS happening. + b is by definition inflationary; it is adding to what would have happened regardless. So if you are saying gold will go to 250, what you are really saying is that without Fed intervention gold would have gone to 50. If you believe that, then I've got a bridge in brooklyn . . .
The biggest ? is not whether the Fed is printing but rather how much will b compare to y . . .less more, etc. Remember by definition the Fed doing b is inflationary . . . it is adding to the money supply where naturally it wouldn't have been added.
This is why, I say we will get both. . . a fall in prices in things that require credit (houses, cars) and an increase in things that don't. Sure businesses rely completely on credit, but if they can't get credit they go under which reduces the supply of vendors making it easier for those that survive to increase prices so they can stay alive.
It's also why I say we get very little increase in wages . . . it's all tied to the dollar, when they crash the dollar (and it might be slow) foreign goods will rise in price; and what do you buy besides houses, and food is actually made in the USA.
"gte said...If the Fed didn't have unlimited power to print, I would believe you contrarian."
That is a moot point to Contrarian. He himself noted that no amount of money, even trillions of dollars handed out to every man woman and child in the US can stop the cosmic, predestined, force of deflation.
Its all part of the glug glug glug drink the doom-aid thiniking that goes into believing in the branch dividians, heavens gate, and the elliott wave.
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