Where I am currently riding out the winter, waiting for good days of spring, I can not help but notice the odd things that have taken hold in this country in just a few short years. Now the younger guys and gals must take a breath and realize a short time for me is half your life time, but let me try and describe the picture I see being painted. I do not see a beautiful completion. But I know, I could be wrong. So please help with the need correction in my vision. I am currently in Channel Islands Harbor, Oxnard California, Ventura county. The Cities in this county and the neighboring county, Santa Barbara, range from very wealthy residential to rural agricultural quite poor. Some areas are by their estimates 25% illegal immigrants. Property values range wildly depending on the specific area and the residents of that small local area. A small modest home in Oxnard may be valued at 250k while the same maybe 600k in Ojai or even 800k in Santa Barbara. These values have doubled and even tripped since the mortgage crisis of 10 years ago. But is this reality, or just a bubble here in this time. Most of these people can not afford to live here even in the lowest valued homes, as it is now. What happens when interest rates return to something near normal. Like a traditionally moderate 6%? Forget about the inflation busting days of 18% even 20%. Do we return to the mortgage crisis days again? All over again?
Or to translate, interest rates can not rise. People can not count on retiring and living on interest. So who provide the money to the lenders in the future? I can not see a clear design. We had a course of action for inflation in the past, but it may not be available again.
>With the deregulation of banking recently passed, your probability of crisis has substantially increased. The Congress is in another zone and the Mortgage companies are blood sucking animals. In NJ, from one town to another, one county to another, people are strapped into financial bleak or living the live of financial stability. In the north counties like Bergen county, millionaires are enclaved on streets with million dollar price tags while down south, counties like Cumberland or Salem have people that live paycheck to paycheck. A financial crisis would affect them and the unfortunate souls in the inner cities too. NJ would be the true indicator of crisis. It is really expensive to live in the "garden" State.
A citation for your article quote would be nice. Though I read something similar about NJ and it's massive tax increase proposals and giant hole it dug for itself with its overly generous pensions for govt. workers.
As long as it is accompanied by a raise in everyone’s paycheck, everything will be fine. So, basically, we are fucked.
So basically, with the Federal reserve setting the interests rates so low for so long in order to stimulate us out of a prolonged recession, it caused the next problem. With such and increase in population with increased demand for housing we already have the next bubble ready to burst with a slight increase in inflation, causing the Fed to move the rate up. Shall we bail the lenders out again, or let chaos have it's way? I don't think whether we have Dodd/Frank restrictions on banking has zip to do with what is happening or where we go.
