First, they broke the capital markets [9]. Then, the money-printing central-planners broke the housing market too. Here, in under 200 words, is a real-life case study of just how they did that.
The surge in home prices across Sydney has come even as the supply of properties for sale expanded, according to RP Data Pty. About 70 percent of homes that go to auction each week are sold, the researcher said in a Nov. 3 statement.
The boom, coming amid weakness in other parts of Australia’s economy, poses a quandary for the central bank. The nation’s unemployment rate was at 6.2 percent in October, the highest level since October 2002, and gross domestic product rose 0.5 percent in the three months through June, compared with a 1.1 percent gain the previous quarter, according to the statistics bureau.
“The housing recovery has come through even more quickly than we forecast, pulling some growth into 2014 at the expense of 2015,” Morgan Stanley economists led by Daniel Blake said in a Nov. 5 report, adding that the economy needs more stimulus from monetary or fiscal policy to avoid a recession. “The risk we see is that conditions almost certainly need to deteriorate before this will occur, given the corners that both monetary and fiscal policy makers find themselves in.”
"Cornered" is right, because there is no longer a way out.
Source [10]
