Free Markets, Not Affordable Housing, Cure to Housing Crisis

Numerous articles have recently appeared describing an alarming prospect for renters moving forward.

The Atlantic describes a "bleak future for renters" and Zero Hedge noted the "missing" inflation is located in rental rates, which have been on a historic rise. Bloomberg noted "the rent crisis is about to get much worse."

Many have used the fallout of the housing crisis to advance an agenda centralized on the transformation of wealth. An orchestrated series of events, from the FED's ZIRP (zero interest policy), quantitative easing (the printing of money) and the bailout of the nations banking system has led to an inflated stock market where counter party risks have escalated and an increasing disconnect between the worlds of equity and fixed income has emerged. Hypothecation is certain to be an upcoming buzzword.

The economic policies of the left have left those seeking to move up the ladder of prosperity shackled to the ground. Potential home buyers are unable to pull the trigger on purchases of new or existing homes, as median income is stagnant and full time employment growth is non-existent.

In fact, home ownership is at a 40 year low.

Chart via ZeroHedge.com

Left leaning policy wonks, who never let a crisis go to waste, think the government has opportunities to correct the situation, by stepping in to ensure affordable housing.  Stepping in to correct the "situation" they created?  One thing I know; it is not prudent to engage those who caused the problem to fix the problem.

“The economy alone is not going to solve this problem," said Andrew Jakabovics, senior director of research at Enterprise Community Partners, said in a conference call to discuss the findings. "It brings us back to the need to expand affordable housing.”

False.

Presently, consumers are boxed in with historic rises in rental rates (inflation), with little avenue of escape.

More government intervention in the market is the opposite of what is needed. As Ronald Reagan once said, The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'

For the problem to be solved, regulation and taxation must retract to allow increases in full time employment, median incomes and entrepreneurship. Further, QE, which devalues the currency, must cease and interest rates must rise.

As the brilliant Thomas Sowell appropriately notes upon the visit of Pope Francis to America, "Pope Francis’ own native Argentina was once among the leading economies of the world, before it was ruined by the kind of ideological notions he is now promoting around the world".

Without question, free market capitalism is the best path to prosperity, where most who achieve it significantly expand their participation in charity efforts. This is not only true in America, but across the globe.

Providing an environment for potential home buyers to escape from being trapped in rental homes is essential to solve the housing problem, and a integral part of that landscape would be free market capitalism unleashing the entrepreneurial spirit of the individual, placing the federal government back operation within its means and a reduction in punitive regulatory and taxation burdens.

As former Rep. Thaddeus McCotter, R:MI, noted, "Reagan trusted in Americans' entrepreneurial spirit, innovative talents, and industriousness, and he agreed with Adam Smith's insight that freedom and prosperity are inextricably entwined and mutually reinforcing. The flexibility of our markets is endangered by excessive regulation, onerous litigation, and government redistribution of wealth".

The blueprint to solve all the nations economic ills has already been written, if our elected leaders chose to engage it.  The current group will not, choosing to increase power over the citizenry through increasing tyranny utilizing divisive policies laced with socialism.

In November of 2016, we have A Time for Choosing.

Truth Lost in Conflicting Chaos

It is spinning out of control.

The NASDAQ was down 1.5% today, with the VIX (volatility index) spiking.

Overseas, Europe is under siege, with Nigel Farage detailing the damage unfiltered immigration will cause, with those seeking to take America down following Europe's lead.

Additionally, there are escalating issues with Russia in the middle, where things are quickly getting nasty, with our side lead by enemies within.

The housing market seemingly everyone is cheerleading is a mirage, as home builders and home sales are crashing.

Physical gold is elusive; however, big money is chasing it. Big money is also betting on increasing rents, which is a signal the economy is far from healed.  Potential home buyers are unable to pull the trigger on purchases of new or existing homes, as median income is stagnant and full time employment growth is non-existent.

Then, there is the stock market, where too many dollars are chasing too few performing assets, creating inflationary values based on nothing.  Retail sales, and manufacturing, have also collapsed.

With conflicting information everywhere, it is tough to decipher propaganda from reality.  Look no further than the lack of inflation in the market, or so we are told by our government and their media partners. In many ways, they seem blended in ironic mesh.

But make no mistake, real trouble is near. The market knows; soon, we all will.

 (chart via WallStreetWindow.com)

Folks Are Placed In A Stranglehold

An article turned up on CNBC today that seemed to catch many economists and pundits by surprise, although it has been painfully obvious to anyone not slanted with Obamavision for over half a decade.

Please see the following pull quotes from the piece, which notes a what can only be described as increasing economic issues that are not only delaying millennials from purchasing a home, but from fully achieving milestone of life.

"The typical first-timer now rents for six years before buying a home, up from 2.6 years in the early 1970s, according to a new analysis by the real estate data firm Zillow. The median first-time buyer is age 33—in the upper range of the millennial generation, which roughly spans ages 18 to 34. A generation ago, the median first-timer was about three years younger.

The delay reflects a trend that cuts to the heart of the financial challenges facing millennials: Renters are struggling to save for down payments. Increasingly, too, they're facing delays in some key landmarks of adulthood, from marriage and children to a stable career, according to industry and government reports".

The greater majority of the issues plaguing the millennials, and the entire economy, are due interactions of the government.  Among the negative governmental influences have been the flooding of the market with money, which devalues assets and is inflationary, increasing taxation and regulation, attacks on small businesses and increasing infiltration in markets creating inefficiencies.

Due to these improper, and in many cases illegal decisions, the economy has been in an orchestrated decline. Our opinion for the reasons the administration would engage in such activity centers around the administrations effort with regard to the transformation of wealth, both an a micro domestic and macro global level.

At any rate, there have been scores of negative byproducts from these efforts, and for those seeking home ownership and unable to make that jump and boxed in the rental market, it should not come as a shock that rental rates are skyrocketing, hitting "crazy levels".  As such, escape from this viscous circle becomes increasingly more challenging, and folks are placed in a stranglehold.

As, professionally, we operate in this space, we so appreciate those that have chosen one of our properties to make their home over the years, but we note with sadness the increasing degree of difficulty faced by those who seek to climb the latter and purchase a home.

The economy is a wreck, and expenses and inflation are outpacing rises in income for those who do have meaningful full time employment, which decreases monthly with 94 million Americans underemployed or unemployed.

We know who is responsible for placing hard working Americans in this status, although many do not given the propaganda put forth by a complicit media and outright lies being told by Obama administration officials (unemployment rate is top example).

Elections have consequences, and we are paying a heavy price for 2012.