Losses arising from America�s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world�s leading economists has told The Times.Well I certainly am not arguing with that forecast. A Japanese Style Recession is consistent with what I have been proposing for quite some time.
Robert Shiller, Professor of Economics at Yale University, predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years.
Professor Shiller, co-founder of the respected S&P Case/Shiller house-price index, said: �American real estate values have already lost around $1 trillion [�503 billion]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars� worth of losses.�
He said that US futures markets had priced in further declines in house prices in the short term, with contracts on the S&P Shiller index pointing to decreases of up to 14 per cent.
�Over the next five years, the futures contracts are pointing to losses of around 35 per cent in some areas, such as Florida, California and Las Vegas. There is a good chance that this housing recession will go on for years,� he said.
When does Peter Schiff hop on board that train of thought? Please see Not Your Father's Deflation: Rebuttal or Peter Schiff Replies to Deflation Rebuttal for alternative viewpoints and a rebuttal of those viewpoints.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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