{"id":14492,"date":"2011-04-27T20:17:29","date_gmt":"2011-04-28T03:17:29","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=14492"},"modified":"2011-04-27T20:17:29","modified_gmt":"2011-04-28T03:17:29","slug":"the-stick-the-carrot-and-the-men-behind-the-curtain","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14492\/the-stick-the-carrot-and-the-men-behind-the-curtain\/","title":{"rendered":"The Stick, the Carrot, and The Men Behind the Curtain"},"content":{"rendered":"

Monday, I talked about how real estate is better described as a store of value rather than an investment<\/a>, referencing the work Reason’s Anthony Randazzo published<\/a>.\u00a0 Randazzo really hit it out of the park because he showed, without a doubt, how the residential real estate bubble started right after 1992.\u00a0 Look at the second chart (Case-Shiller Real <\/em><\/strong>Housing Price Index).\u00a0 That chart shows the adjusted for inflation index.\u00a0 It looks like an EKG after a jolt from defibrillator paddles.\u00a0 Every curious person would want to know what<\/em><\/strong> those defibrillator paddles were.:<\/p>\n

Only once the so-called 1992 Government-Sponsored Enterprise (GSE) Safety and Soundness Act opened up the floodgates of federal subsidies, later to be caffeinated by the Federal Reserve’s loose monetary policy in the early 2000s, did prices double nationally.<\/p><\/blockquote>\n

ZAP!!!<\/strong> The 1992 Government-Sponsored Enterprise (GSE) Safety and Soundness Act<\/em> which turned out to be an oxymoron.<\/p>\n

One commenter didn’t buy the results of the EKG and said<\/a>:<\/p>\n

Seems to me that America has had a succession of bubbles, market manipulations and public speculations since the mid 80s. Gold\/Silver in the mid 80s, the Saving & Loan scams later, then the tech stock mania, then the real estate bubble and now we\u2019re seeing gold\/silver mania again as well as two recent bouts of crude oil speculation.<\/p>\n

And these things were caused by activist government planning? No, these things were caused by BIG, BIG money jumping from place to place and \u201cmaking the market\u201d.<\/p><\/blockquote>\n

I asked a leading question:<\/p>\n

What makes it \u201cjump\u201d?<\/p><\/blockquote>\n

I should have pointed out that there was a commodities bubble in the late 70s (remember the odd and even days at the pump?) but, let’s add that 70’s commodities bubble, to the many asset bubbles cited by the commenter, and ask “Is that normal?<\/em>” and, if it isn’t (by the way, it isn’t normal<\/em>), we must wonder, did anything happen in the 1970’s which would cause money to move quickly in and out of asset classes?\u00a0 Isn’t there some asset standard to which our dollar could be pegged?<\/p>\n

The answer is like a bar of gold, hidden Read more<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Monday, I talked about how real estate is better described as a store of value rather than an investment, referencing the work Reason’s Anthony Randazzo published.\u00a0 Randazzo really hit it out of the park because he showed, without a doubt, how the residential real estate bubble started right after 1992.\u00a0 Look at the second chart […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26,6,5],"tags":[],"class_list":{"0":"post-14492","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"category-marketing","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":14488,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14488\/housing-might-not-be-a-good-investment-but-its-not-a-bad-hedge-against-inflation\/","url_meta":{"origin":14492,"position":0},"title":"Housing Might Not Be a Good “Investment” But It’s Not a Bad Hedge Against Inflation","author":"Brian Brady","date":"April 26, 2011","format":false,"excerpt":"Debra and I had the good fortune to met Anthony Randazzo at a Reason Foundation dinner last week.\u00a0 Mr. Randazzo published an article today, about real estate as a \"store of value\" (which was consistent with what we've been talking about here on BloodhoundBlog). Few people will dispute that more\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10351,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10351\/another-25-ouch-thats-going-to-leave-a-mark\/","url_meta":{"origin":14492,"position":1},"title":"Another 25%? 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