Whether or not the recent surge in consumer price inflation will be a lasting phenomenon is subject to legitimate debate. However, by now one thing should be clear. Through its truly massive bond-buying program, the Federal Reserve has created and continues to create asset price and credit market bubbles. Based on past experience, this hardly bodes well for the US economy having a soft-landing next year when the music of ultra-easy money eventually stops playing.

Anyone doubting that the U.S. economy is now in the grips of yet another housing market bubble need only take a cursory look at the authoritative Case-Shiller housing price index. Adjusted for inflation, that index is now at approximately at the same level that it reached in 2006 at the peak of the last housing market bubble. Of further concern is the fact that U.S. home prices are continuing to rise at an annual 12 percent rate.

Anyone doubting that we are also…

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