First the good news

[slamlander]

The good news, for me, is that I was correct and yet another prediction has come to pass.

The US Dollar is now worth only 84.7 centimes or 0.847 Swiss Francs.

Contrary to what this sounds like, it isn’t good news for the US economy. In fact, it is a leading indicator for Gonzalo Lira’s Hyperinflation scenario and this happened about 4 months sooner than I thought it would.

Now for the bad news;

An index of home prices in the nation’s largest American cities plumbed new depths in March, pushing past a low set during the worst of the Great Recession.

The reasons for this is

The housing market appeared to be headed toward recovery last year, but those gains were largely driven by a popular credit for buyers. Sales and prices have been weak since then.

The problem is that while a lot of those sellers had stopped the losses for those buyers, they have now signed up, in full, for all the losses going forward.

"This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation," said David Blitzer, chairman of the S&P index committee, said. "Home prices continue on their downward spiral with no relief in sight."

In other words, the bubble is still deflating. Some of them are facing losses as high as 60% from their original purchase price. Any foreseeable appreciation is too far down the tracks for a reasonable recovery.

Some economists would agree, predicting that a full recovery in parts of the West’s "foreclosure belt" — California, Nevada and Arizona — won’t occur until at least 2030.

In fact, that’s an optimistic view. There will not be any recovery until the current bottom is found and it is nowhere in sight nor is it expected to be seen soon. In this case, it could be well into the last half of this century. What these unfortunates need to do is file bankruptcy while they still can, get a complete discharge of their debts, and start over. After all, that’s why the TARP was paid to the banks, to indemnify them against those sorts of losses.

Of course, the banks should really be writing those mortgages down to reality and taking the losses that they were already paid to take by the TARP. However, it doesn’t look like that’s happening. Maybe, we should have just let those banks fail.

The only ones that are doing well are my friends like DessertRat, whose house is paid off with no liens. I am sure that he is enjoying the reduced property taxes. He may be taking a paper loss but it isn’t a real loss until he tries to sell it.

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