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America's Insatiable Demand For More Expensive Cars, Larger Homes And Bigger Debts

Tyler Durden's picture




 

Submitted by Michael Snyder of The Economic Collapse blog,

One of the things that this era of American history will be known for is conspicuous consumption.  Even though many of us won't admit it, the truth is that almost all of us want a nice vehicle and a large home.  They say that "everything is bigger in Texas", but the same could be said for the entire nation as a whole.  As you will see below, the size of the average new home has just hit a brand new record high and so has the size of the average auto loan.  In the endless quest to achieve "the American Dream", Americans are racking up bigger debts than ever before.  Unfortunately, our paychecks are not keeping up and the middle class in the United States is steadily shrinking.  The disparity between the lifestyle that society tells us that we ought to have and the size of our actual financial resources continues to grow.  This is leading to a tremendous amount of frustration among those that can't afford to buy expensive cars and large homes.

I remember the days when paying for a car over four years seemed like a massive commitment.  But now nearly a quarter of all auto loans in the U.S. are extended out for six or seven years, and those loans have gotten larger than ever...

In the latest sign Americans are increasingly comfortable taking on more debt, auto buyers borrowed a record amount in the first quarter with the average monthly payment climbing to an all-time high of $474.

 

Not only that, buyers also continued to spread payments out over a longer period of time, with 24.8 percent of auto loans now coming with payment terms between six and seven years according to a new report from Experian Automotive.

 

That’s the highest percentage of 6 and 7-year loans Experian has ever recorded in a quarter.

Didn't the last financial crisis teach us about the dangers of being overextended?

During the first quarter 0f 2014, the size of the average auto loan soared to an all-time record $27,612.

But if you go back just five years ago it was just $24,174.

And because we are taking out such large auto loans that are extended out over such a long period of time, we are now holding on to our vehicles much longer.

According to CNBC, Americans now keep their vehicles for an average of six years and one month.

Ten years ago, it was just four years and two months.

My how things have changed.

And consumer credit as a whole has also reached a brand new all-time record high in the United States.

Consumer credit includes auto loans, but it doesn't include things like mortgages.  The following is how Investopedia defines consumer credit...

Consumer credit is basically the amount of credit used by consumers to purchase non-investment goods or services that are consumed and whose value depreciates quickly. This includes automobiles, recreational vehicles (RVs), education, boat and trailer loans but excludes debts taken out to purchase real estate or margin on investment accounts.

As you can see from the chart below, Americans were reducing their exposure to consumer credit for a little while after the last financial crisis struck, but now it is rapidly rising again at essentially the same trajectory as before...

Consumer Credit 2014

Have we learned nothing?

Meanwhile, America also seems to continue to have an insatiable demand for even larger homes.

According to Zero Hedge, the size of the average new home in the United States has just hit another brand new record high...

There was a small ray of hope just after the Lehman collapse that one of the most deplorable characteristics of US society – the relentless urge to build massive McMansions (funding questions aside) – was fading. Alas, as the Census Bureau today confirmed, that normalization in the innate desire for bigger, bigger, bigger not only did not go away but is now back with a bang.

 

According to just released data, both the median and average size of a new single-family home built in 2013 hit new all time highs of 2,384 and 2,598 square feet respectively.

 

And while it is known that in absolute number terms the total number of new home sales is still a fraction of what it was before the crisis, the one strata of new home sales which appears to not only not have been impacted but is openly flourishing once more, are the same McMansions which cater to the New Normal uberwealthy (which incidentally are the same as the Old Normal uberwealthy, only wealthier) and which for many symbolize America’s unbridled greed for mega housing no matter the cost.

There is certainly nothing wrong with having a large home.

But if people are overextending themselves financially, that is when it becomes a major problem.

Just remember what happened back in 2007.

And just like prior to the last financial crisis, Americans are treating their homes like piggy banks once again.  Home equity lines of credit are up 8 percent over the past 12 months, and homeowners are increasingly being encouraged to put their homes at risk to fund their excessive lifestyles.

But there has been one big change that we have seen since the last financial crisis.

Lending standards have gotten a lot tougher, and many younger adults find that they are not able to buy homes even though they would really like to.  Stifled by absolutely suffocating levels of student loan debt, many of these young adults are putting off purchasing a home indefinitely.  The following is an excerpt from a recent CNN article about this phenomenon...

The Millennial generation is great at many things: texting, social media, selfies. But buying a home? Not so much.

 

Just 36% of Americans under the age of 35 own a home, according to the Census Bureau. That’s down from 42% in 2007 and the lowest level since 1982, when the agency began tracking homeownership by age.

 

It’s not all their fault. Millennials want to buy homes — 90% prefer owning over renting, according to a recent survey from Fannie Mae.

But student loan debt, tight lending standards and stiff competition have made it next to impossible for many of these younger Americans to make the leap.

This is one of the primary reasons why homeownership in America is declining.

A lot of young adults would love to buy a home, but they are already financially crippled from the very start of their adult lives by student loan debt.  In fact, the total amount of student loan debt is now up to approximately 1.1 trillion dollars.  That is even more than the total amount of credit card debt in this country.

We live in a debt-based system which is incredibly fragile.

We experienced this firsthand during the last financial crisis.

But we just can't help ourselves.

We have always got to have more, and society teaches us that if we don't have enough money to pay for it that we should just go into even more debt.

Unfortunately, just as so many individuals and families have found out in recent years, eventually a day of reckoning arrives.

And a day of reckoning is coming for the nation as a whole at some point as well.

 

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Wed, 06/04/2014 - 20:51 | 4825263 world_debt_slave
world_debt_slave's picture

SuperSize Me!

Wed, 06/04/2014 - 20:53 | 4825267 I MISS KUDLOW
I MISS KUDLOW's picture

and nobody owns anything, i guess it will take 160 years to unwind

Wed, 06/04/2014 - 21:08 | 4825279 Dr. Engali
Dr. Engali's picture

No, once the great unwind really kicks in high gear it will be very quick.

Wed, 06/04/2014 - 21:12 | 4825310 max2205
max2205's picture

Go large rates will never be this low again....right

 

Can't buy overpriced stawks on margin.....buy a death trap from GM...recall is our middle name

Wed, 06/04/2014 - 21:12 | 4825311 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

The Central Bank of DoChenRollingBearing has an insatiable demand for the below hard assets:

1) Au

2) Pt

3) Pd

4) Bitcoin

5) Highly engineered products made of 52100 steel

6) Maybe a little more Pb

Thu, 06/05/2014 - 01:02 | 4825808 zaphod
zaphod's picture

This is a great list. What do you plan to do with #5 though, that stuff is a bit beyond a home forge I thought.

Wed, 06/04/2014 - 21:28 | 4825353 Yes_Questions
Yes_Questions's picture

 

 

It'll be interesting to see who brings up BK reforms in this election cycle during his/her campaign, and if any of the sheep lift their snouts to listen.

 

Unless, the Great Unwind will somehow translate into better pay for the JOB DOERS, the system needs to relax the rules on BK (debt discharge of all kinds for humans) or we may instead get to see a Great UNGLUED and for that, there is Master Card.

 

 

 

 

Wed, 06/04/2014 - 20:55 | 4825270 Seasmoke
Seasmoke's picture

Keeping up with The Jones' got very very hard to do !!

Wed, 06/04/2014 - 21:13 | 4825313 Oldwood
Oldwood's picture

There is no reason for people to pull back on credit. They see the whole world as immune to risk. The stock market is to the moon and no one has fear of accountability for anything. In an attempt to keep this thing afloat the have destroyed what little remaining morality we had left.

We are all in it for ourselves now. No illusion of the common good or for the sake of our country. Its all about me now brother. Run up the credit cards and party like there is no tomorrow, cause no one thinks there is.

Wed, 06/04/2014 - 21:00 | 4825272 Dr. Engali
Dr. Engali's picture

So, what's your point? It's old news and it won't change until the system collapses. Then after a time, it will start all over again with a different set of players.

Wed, 06/04/2014 - 20:57 | 4825277 fonzannoon
fonzannoon's picture

If by "America" he means wealthy Asian and Saudi and Russian money pouring in buying huge homes, then yes, American's are buying bigger homes than ever.

Wed, 06/04/2014 - 21:06 | 4825296 Cugel
Cugel's picture

I wish that was true, but based on my day-to-day experience with Americans they are fully complicit in this.

If the were going to switch to borrow-to-consume from produce-to-save in a generation, why did it have to be my generation?

Wed, 06/04/2014 - 21:28 | 4825320 NoDebt
NoDebt's picture

Nobody's building small homes any more.  No money in it.  Only the bigger ones are going up in value.  

If I get a chance I'll shoot you a pic of the CASTLE some guy is building literally around the corner from my place.  Your eyes will fall out.  Mine did.  The 5-10,000 SF McMansions they put up in a neighborhood behind me back in the real estate boom weren't big enough, apparently.  No, this dude needed an 18,000 SF house.  That includes the servants quarters, of course, which themselves are much bigger than my own house.

My house is a 50 year old, 1300 SF rancher and his house is a long Par 3 from my place.

This is getting a little crazy, and I'm fairly accustomed to crazy.

Wed, 06/04/2014 - 21:33 | 4825367 Yes_Questions
Yes_Questions's picture

 

 

WOW, big servants!

 

inflation is hitting the bottom line in the least expected ways..these....days.

 

Wed, 06/04/2014 - 21:34 | 4825368 fonzannoon
fonzannoon's picture

I think we are missing one area that has been one of the best investments going and probably still has a bright future

http://www.bloomberg.com/news/2014-04-10/trailer-parks-lure-investors-pu...

Wed, 06/04/2014 - 22:00 | 4825453 RafterManFMJ
RafterManFMJ's picture

I've idly wondered how effective it would be to stack trailers into a big cube and rent them out; central sewage and water - savings!

Less land needed as well.

Of course you'd have built a tornado magnet; it'd likely get hit 2 or 3 times a season.

Wed, 06/04/2014 - 22:10 | 4825488 SmackDaddy
SmackDaddy's picture

I can picture the sign now... Heli-crate Tower Acres

Wed, 06/04/2014 - 21:59 | 4825444 SmackDaddy
SmackDaddy's picture

Fucking-a.  Theyre building $600k homes (central Ohio) practically under high tension power lines near me.  An trendy aparment complex in an industrial area.  I mean, who finances this shit? 

Wed, 06/04/2014 - 23:56 | 4825714 cynicalskeptic
cynicalskeptic's picture

Who LIVES in this shit?   morons......  

They put up an apartment complex in what used to be the old 'gasoline alley' neighborhood in the town I grew up in... Gas stations, Auto Body Shops, repair shops and a few junk yards - all viable and long time businesses.  Most were forced out but a few that owned their buildings wouldn't sell and stayed.   Now the new residents are bitching about the smells from the paint and noise from the repair shop..... WTF?  

We destroy viable businesses so fools can build unneeded and unwanted projects in places they shouldn't be.....

Same crap going on in Queens near Shea ----oops....'Citi Field' - businesses that they didn't WANT anywhere else being forced out (of business) to benefit connected developers that want to grab the land oto build more of the same old crap which is NOT needed.

Thu, 06/05/2014 - 00:38 | 4825786 cape_royds
cape_royds's picture

Because of the debt-fuelled real estate boom, which in Canada has not yet corrected, the entire City of Vancouver is getting slowly transformed into a massive bedroom community. A real estate developer even tried to buy up the Port of Vancouver to try to turn it into condos. The universities here are tearing down classrooms and laboratories so that they can build more condos to sell.

You can't make this shit up. If Juvenal showed up today, he'd either jump off a bridge, or go postal. But there's no way that poor bastard would be able to write satire.

Thu, 06/05/2014 - 01:45 | 4825860 Wile-E-Coyote
Wile-E-Coyote's picture

Yeap the other day I drove through an industrial estate to find at the end of the road a plush complex of apartments, the context was astounding, I asked myself who the fuck would want to live there, when the only access was a drive through a really shitty industrial area. I actually caught myself saying WTF.

Wed, 06/04/2014 - 22:29 | 4825543 Dead Man Walking
Dead Man Walking's picture

My house is a 50 year old, 1300 SF rancher and his house is a long Par 3 from my place.

This is getting a little crazy, and I'm fairly accustomed to crazy.....

 

NoDebt, this one is easy.  Put a red metal flag in your front yard, and your house can be their mailbox !

Thu, 06/05/2014 - 00:28 | 4825767 alexcojones
alexcojones's picture

Go Big or Go Home, right America?

The bigger the castle, the harder to protect, when TSHTF.

Wed, 06/04/2014 - 21:01 | 4825281 GooseShtepping Moron
GooseShtepping Moron's picture

That chart would seem to validate my subjective assessment that 1993-94 was the beginning of New Wave Bobo Consumerism and that it radically altered our society.

http://www.zerohedge.com/news/2014-06-04/steve-liesman-debt-bridge-working-hard-playing-hard-america#comment-4825072

Wed, 06/04/2014 - 22:16 | 4825515 SmackDaddy
SmackDaddy's picture

you're right.  but you're making people our age sound like fags.  

you must set the example.  demonstate there is an alternative.  

a lot of people around here talk like they are better than everyone.  those people seem like they are detached from reality and dont really have influence over anyone in their lives.  

each and every day, people never cease to amaze me.  both good and bad.  and sometimes its hard to predict the ones who are going to step up in face of real adversity....

Wed, 06/04/2014 - 21:02 | 4825286 Yen Cross
Yen Cross's picture

 I'm searching for another country.

Wed, 06/04/2014 - 21:09 | 4825301 Moe Hamhead
Moe Hamhead's picture

Try Texas.  No income tax, easy to get to and from (2 airports), and not far from the tropics or the mountains, or the left coast.

Wed, 06/04/2014 - 21:32 | 4825363 Oldwood
Oldwood's picture

Yes, but we have no more control of our borders and immigration policy than anywhere else. Demographics and therefore our laws, will change.

Wed, 06/04/2014 - 21:55 | 4825431 ricky663
ricky663's picture

We are in Thailand, and quite happy.
Despite the current political situation, we live in a beautiful place with a wonderful culture... Low cost of living.
Highly recommended... Check it out!

Wed, 06/04/2014 - 22:03 | 4825468 RafterManFMJ
RafterManFMJ's picture

You know, if I bought a couple more apts. and handed off management to a local specialist we probably COULD exfiltrate to Thailand or some such place.

Something to keep in mind... A "plan B" if you will.

Wed, 06/04/2014 - 22:52 | 4825591 DerdyBulls
DerdyBulls's picture

Yes. I get misty eyed for Bangkok when I think about military coups and tsunamis. 

Wed, 06/04/2014 - 21:12 | 4825309 yogibear
yogibear's picture

Introduce 250% LTV home loans with no money down and no documentation Yellen, Evans and Dudley! Let's take this bubble to new levels.

The Federal Reserve is good at one thing, creating larger and larger bubbles each time.

Wed, 06/04/2014 - 21:12 | 4825312 Seek_Truth
Seek_Truth's picture

For everything in the world--the lust of the flesh, the lust of the eyes, and the pride of life--comes not from the Father but from the world. - 1 John 2:16

Wed, 06/04/2014 - 21:46 | 4825400 Oldwood
Oldwood's picture

The best trick the devil ever played was convincing man he did not exist.

Yet, when things go to shit, who is it we are first to blame? The devil made me do it?

Wed, 06/04/2014 - 22:00 | 4825448 Seek_Truth
Seek_Truth's picture

Amen, Oldwood.

Wed, 06/04/2014 - 21:17 | 4825321 buzzsaw99
buzzsaw99's picture

half those nice cars are leases. lololololol

Wed, 06/04/2014 - 21:39 | 4825373 cowdiddly
cowdiddly's picture

I don't know. I see people here with 1 Kid building 6-7 bedroom 4.5 baths for 3 people to live in. These are not people effuent enough to have maids and butlers to keep these things clean. I have to pay to heat and cool my house and even if I was a billionare I would not want more than maybe 2400 sq ft to maintain for just me and the wife and an ocasional visit from the kids. Maybe a 10,000 sqare shop or something. I think insanity has taken over this country.

 my meager 2000 squares here and dont want an add on. If anything I would like to downsize.

Wed, 06/04/2014 - 21:42 | 4825392 Seek_Truth
Seek_Truth's picture

These are not people effluent enough?

What, they don't discharge enough waste?

Perhaps you meant "affluent"?

Wed, 06/04/2014 - 21:47 | 4825403 cowdiddly
cowdiddly's picture

Sorry guy, typo. But yes, I think the first term was  fitting if not freudian.

Wed, 06/04/2014 - 21:54 | 4825417 Seek_Truth
Seek_Truth's picture

Yes, Freudian, indeed!

Of course Freud was full of effluence, so actually Freudian squared!

Wed, 06/04/2014 - 22:02 | 4825440 cowdiddly
cowdiddly's picture

Yea, to paraphrase, I never wanted to fuck my mother or kill my dad, so yes he was like most of acadamia: FOS2

Wed, 06/04/2014 - 22:06 | 4825475 RafterManFMJ
RafterManFMJ's picture

You didn't? Well I guess we know you're not a lawyer or bankster then?

Wed, 06/04/2014 - 21:44 | 4825398 Platinum
Platinum's picture

While everybody is going to eat it when the SHTF, the foolish people buying giant homes (and the accompanying crap to fill it with), are going to suffer the most psychologically, since they had the illusion of success.

 

In some ways, it will be interesting to see how everybody we know (or thought we did) handles what is just about here.

 

Maybe it is just me, but I'm seeing more and more glitches in the matrix.

George Carlin had a great bit on this.

https://www.youtube.com/watch?v=egRgweL12Uc

Wed, 06/04/2014 - 21:52 | 4825422 Joebloinvestor
Joebloinvestor's picture

I hope they tax the shit out of them.

Wed, 06/04/2014 - 21:55 | 4825430 Seek_Truth
Seek_Truth's picture

No need for hope, rest assured they will.

Wed, 06/04/2014 - 21:56 | 4825439 Oldwood
Oldwood's picture

They will but you will still be fucked.

Wed, 06/04/2014 - 22:03 | 4825462 SmackDaddy
SmackDaddy's picture

the get the fuck out of here you statist fuck.  

Wed, 06/04/2014 - 21:54 | 4825427 Oldwood
Oldwood's picture

too easy to categorize. their are trailer park people who will be on the street in their pajamas. The key is preparedness, regardless of wealth or position. I live in an oversize home on a oversize acreage and I'm not particularly wealthy, just frugal. Trust me, I'm prepared. Its never safe to assume to much.

Wed, 06/04/2014 - 21:56 | 4825438 Seek_Truth
Seek_Truth's picture

The key is to never assume you're prepared.

Wed, 06/04/2014 - 22:01 | 4825454 Oldwood
Oldwood's picture

I have had friends ask how to prepare and I have suggestions but primarily I suggest that they become mentally prepared. We have no way to know exactly what will happen or when, but preparedness is mostly the ability to act in crisis. Have thought out reactions to as many different potentials as possible. This can make you appear insane to others, but that might be part of my plan!

Wed, 06/04/2014 - 22:13 | 4825501 Seek_Truth
Seek_Truth's picture

Lol, that's as good a plan as anyone can have, just make sure you know how to trap, forage, hunt and have a good water source you can reach. But most importantly, make sure you are right with The Lord.

Wed, 06/04/2014 - 22:31 | 4825550 Oldwood
Oldwood's picture

All is unknown until the test comes.

Wed, 06/04/2014 - 21:51 | 4825416 Joebloinvestor
Joebloinvestor's picture

What do you expect from a fractional/fiat system run amuck?

The US is going to end up like the South did after the Civil War.

The currency will be worthless and no one will sell us anything to support whatever war we are involved in at the time.

Wed, 06/04/2014 - 21:54 | 4825425 Joebloinvestor
Joebloinvestor's picture

Location, location, location.......

Wed, 06/04/2014 - 22:11 | 4825491 Atomizer
Atomizer's picture

Many of these wankers don't own 9 homes free and clear of mortgage. They compete like coach roaches on one dwelling. When I was a child, it was called the smiths outgoing the jones.

Thank Edward Bernays for that load of horseshit!

 

Wed, 06/04/2014 - 22:16 | 4825494 ricky663
ricky663's picture

I have had it both ways:
7 acre ranch in N. California, 4 BR/2BA with pool, 1 "guest house," 2 7-series Beemers in the garage, motor home, trucks/trailers/tractor parked outside. Oversized income, carrying costs, and tax bills. Big mortgage.
Now I live in S. Thailand on a small lot, 4BR/2BA, 1 diesel truck (which I plan to drive the wheels off).
Little income, low carrying costs, almost zero tax bill. Everything is paid off, and we get interest income from the bank.

We don't have the same lifestyle as before, but we are comfortable (which was the plan). We don't have to work if we don't want, can play golf, eat out, travel in country whenever we want.

We like the current lifestyle.... The wife is happier. "A happy wife makes for a happy life."

How much do you need to be happy? I think having good health and happiness trumps having a lot of stuff and headaches.

Thu, 06/05/2014 - 02:03 | 4825874 Obese-Redneck
Obese-Redneck's picture

That thar Is un-Amexican thought mi amigo,
I betcha miss seein those 50 inch wide arses waddling down the village, dontcha? Speaking of which the missus just got off the dumper and I hafta go find the plunger to take care a bizness, over and out

Thu, 06/05/2014 - 04:09 | 4825944 ricky663
ricky663's picture

Last homestead was Northern Nevada.... A lot of old retired folks. We had our share of "corn fed jumbos," and "wide body L1011s" and saw a lot of ex-smokers carting green Oxygen bottles into the casinos. Not a pretty picture.
Here, most of the ladies have about the same specs: 50-60 KG, 160 cm, 80-60-85 figure (110-132 lbs, 5'3", 32-24-34 figure). A little light on the top end, but certainly pleasant to look at.

Wed, 06/04/2014 - 22:38 | 4825568 robertocarlos
robertocarlos's picture

Why can't we have a Ferrari in every driveway? Cars are easy to build, robots do half the job. Stick your GM cars up your ass.

Thu, 06/05/2014 - 00:31 | 4825768 WVO Biker
WVO Biker's picture

Commuter cars should last 50 years and 1,000,000 miles @ 100 miles per gallon. Special interest vehicles are a different matter, of course.

Thu, 06/05/2014 - 00:24 | 4825762 MeBizarro
MeBizarro's picture

Apparently the greed and stupidity of a lot of Boomers knows no bounds.  It saddens/angers me that so many of my parents' friends either haven't paid off their mortgage on their home yet despite being in their 60s and/or have a huge mortgage on a vacation home yet.

Thu, 06/05/2014 - 02:31 | 4825900 Bear
Bear's picture

Let them eat cake

Thu, 06/05/2014 - 00:35 | 4825783 AdvancingTime
AdvancingTime's picture

 A big shift is occurring in what consumers are buying. Recently we are witnessing a shift from general consumer goods to more purchases of autos and healthcare. The first quarter GDP just came out down 1% yet these two sectors have been outperforming the economy.  If indeed online and auto sales are roaring up double digits at the same time healthcare spending has increased 4.2% it is only fair to assume small business and someone else is getting their ass kicked. Interestingly, this is all occurring as the government continues to pour out billions of dollars each month in student loans, many of these loans will never be repaid. This can be viewed as more proof we are on the wrong path, more on this subject in the article below.

 http://brucewilds.blogspot.com/2014/05/consumption-of-autos-healthcare-a...

Thu, 06/05/2014 - 01:21 | 4825830 Seek_Truth
Seek_Truth's picture

"Healthcare" is a lie!

When will people wake up?

Answer: next spring.

any questions?

Thu, 06/05/2014 - 05:22 | 4825972 Jack4952
Jack4952's picture

Many physicians such as myself have left clinical medicine for good.

What good is your health insurance if you can NOT find a physician to treat you?

 

Thu, 06/05/2014 - 05:20 | 4825970 Jack4952
Jack4952's picture

A true story:

I lived in a suburb of about 16,000 people west of Boston, Massachusetts in a older small two-story, 3-bedroom house. When we purchased it in 1992, our realtor kept pushing far larger houses, telling us that a large home would "appreciate in value far more rapidly", etc. Our reply was that since we no longer had children living with us, we had no NEED for such a large house. Over the next decade she would stop by a few times each year argiung that, since we had no mortgage, we should "invest" in a newer, larger home. My reply was always, "This house is all we need."

In about 2000 a neighbor died and her grandson (an lecetrician) inherited a vacant lot next to us, on which he (helped by professional home builder friends) built a large new house. The woods near our house (where I had hunted) had been cleared to make way for about 40 new houses, which were all very large homes also. His plan was to sell of this new house after a few years, then build an even larger house on the other vacant he owned (on the other side of our house), which entailed quarrying away what amounted to a granite cliff. In 2005 he built tha second house and it was HUGE !!!! Two stories plus a finished basement, with an in-ground, heated swimming pool in back and a 3-car garage. Probably 4000 sq.ft minimum. To make the payments, he rented out rooms in his house to friends.

By the early 2009 his new house was for sale. His work dropped off significantly and his renters apparently could no longer afford their rents. In fact, by mid-2009 our house and only 3 other houses in the new development were the ONLY houses that were NOT up for sale or in foreclosure.

The difference between buying what you truly NEED vesus buying what you WANT.

 

 

Thu, 06/05/2014 - 07:57 | 4826029 Chuck Knoblauch
Chuck Knoblauch's picture

Economics lesson for the class of Federal Reserve crooks.

What happens to prices when the currency is devalued?

Prices increase.

The purchasing power of the currency declines.

It's INFLATION caused by the Federal Reserve.

Stop blaming Americans for higher prices.

Blaming the victim is easy.

How about a real article on the rise in real inflation as a result of Federal Reserve QE?

When did a reduction in inflation suddenly become deflation?

Status quo pigs will use fear to guide policy.

Do NOT follow this link or you will be banned from the site!