There is no housing bubble

.....from 2005....

For the last several years as housing prices have increased all across the country we have heard incessant warnings from analysts and commentators that Americans are becoming irrationally exuberant in snapping up new homes at ever-higher prices.

The "housing bubble," as it is now called, may be about to pop, the same doomsayers predict. Paul Krugman of the NYTimes, one of the worst prognosticators in the business with a Ph.D. in economics, now sees sure signs of the bubble leaking air, or "hissing," as he terms it, because homes that not long ago were selling in 24 hours after they came onto the market are now sitting there for two or three weeks before being snapped up!! Holy Smokes!!

Of course we should be reaching a new equilibrium in housing prices, but unless Greenspan & Company drive interest rates up in order to induce a housing recession, there really is nothing to worry about.

Every now and then in this "free space" I provide for my memos on the margin and Supply-Side University lessons, I reprint a letter I have previously sent to my Wall Street clients, who pay me as much as $25,000 per year, not including bonuses, for the independent research Polyconomics provides. I'm sure my clients will not mind me sharing my June 15 letter with you -- as they know I am doing my best to influence our government policy makers to follow my advice. As far as I know, Poly has been the only outfit in the business that has correctly identified the reasons for the several trillion dollar increase in real property dollar prices in recent years. If you noticed, on the left side of this website, there is a new box advertising the client newsletter we have for ordinary people, at an affordable cost. Check it out