Housing Market Rebounds, Economy Stinks- Something is Rotten In Demark

The FED is committed to keeping mortgage rates low in an attempt to stimulate the housing market. Sales of new home, and construction on new homes, rose from June to August. This come in light of the FED’s recent decision to buy mortgage securities.

Anyway, that is the gist of things, but I am not writing this to report the great economic news, this is a warning. The government, and capitalists are up to the same old tricks. The major fallout from the economic downturn for middle class citizens was a reduction in the value in their investments (401k’s ect..) and the devastation in the value of their primary asset, their home. People’s money were mostly tied into the value of their real estate, and although not liquid, the general consensus was that real estate always goes up. Well it doesn’t and “we know that now”. The housing bubble allowed people to borrow against their homes, bringing us into the foreclosure crisis that we have not yet solved. In the last couple of years people have restructured the way they operate. Gone are the days of buying cars with home equity loans; people have begun to be more aware of credit card balances, in other words frugality has become prudent.

The policies of the FED, designed to bolster housing prices and stimulate the economy do not address the primary issues. Home prices are not realistic compared to the mean wage of middle income people. The adjustment of the housing prices was the natural adjustment to what people can actually afford. Current policies are not allowing the prices to settle into a natural balance based on supply and demand. Low interest rates are keep the inflated prices of these homes steady. The government is hoping that this will coincide with another stock market bubble and economic upturn.

The Dow-Jones hit an all-time high recently. I saw some articles from Reuters titled “Why are stocks soaring when the economy plods?” or something like that. The answer is that they shouldn’t. Stocks should rise when a strong economy, that exports goods and services at a rate lower then it’s deficit, emerges. And yet stocks rise for companies who do not pay their fare share of taxes and employ more people in other countries. Companies, who are no longer American companies, determine the value of American 401k plans without having an interest in the America at all. There is something wrong with that no?

Rising stocks are not in the interest of the American people. When stocks rise, inflation set’s in. That would be great except middle and lower classes wages do not keep up with inflation. In fact the have lost considerable ground in the last 30 years. When stocks rise, the price of oil, food, water, clothing and innumerable other products go up. Are your salaries rising when stocks rise? What does rise is your 401K, but if your paying attention, the mega rich will pull all their money out the stock market before it implodes, and your 401K will continue on its valueless roller coaster ride. The money in a 401K is not your money until you take it out, it isn’t real in any sense in a similar way to the value of your home. It is not money in the bank, because it’s value is not based on your decisions, but on the decisions of .1% of the American population. It’s supposed to represent your hard work, but the value of your handwork depends on the amount of money that billionaires take for bonuses at the end of the year. The stock market isn’t for middle class people, it’s been dressed up for middle class people like The Wizard of Oz standing behind the curtain. It’s a sham, a facade, a way to bring in investment dollars from an entire nation to line the pockets of the very few.

I didn’t start out writing this to be a rant, I hope I didn’t get off topic too much and that was insightful to some of you. I thank you for considering my words.