Tuesday, October 28, 2008

More Agreement (with me)

Yeah, I know. Even a stopped clock is right twice a day. Still, I'm not saying I'm pleased with our economic collapse, just that it validates me.

Anyway, I've been saying for a while now, and on this blog for at least a year, that housing prices will fall 70 % from their peak to 1997 levels. And what's the money quote today?
Peter Schiff, president of broker-dealer Euro Pacific Capital... said... "After a decade-long spending orgy, market forces are finally trying to restrict consumer spending and dampen credit. But the stimulus looks to provide a new source of funds after savings, income, and credit have been exhausted. Our imbalanced economy is in desperate need of retrenchment, but stimulus plans will effectively hold the firemen at bay while throwing gasoline on the flames."

Additionally, said Schiff, easy credit means people will spend more on consumer goods and they'll have less to spend on housing. As a result, he expects home prices to fall a lot more.

"They'll surrender all the gains they made in the past 10 years," he said, "and be even lower than they were 10 years ago."

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