Cars vs. homes

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Micheal Pas­coe wrote a great arti­cle yes­ter­day enti­tled; Throw­ing mon­ey at hous­ing is no cure for fear. He did a poet­ic job of con­trast­ing recent record car sales to the con­tin­u­ing stag­na­tion of the hous­ing mar­ket. Michael ref­er­enced ‘the warn­ing issued by the Reserve Bank two years ago about rely­ing on res­i­den­tial real estate for­ev­er ris­ing.’ To recap, Glenn Steven’s offi­cial state­ment was:

 “I think it is a mis­take to assume that a risk-less, guar­an­teed way to pros­per­i­ty is just to be lever­aged up into prop­er­ty”

Unfor­tu­nate­ly the footage is still not avail­able through the Yahoo 7 web­site. Hav­ing watched the inter­view short­ly before join­ing Steve on his Keen­walk, I anx­ious to watch it again two years after the fact, when the Hous­ing mar­ket has offi­cial­ly slipped off its stilts. This inter­view will undoubt­ed­ly go down in his­to­ry as one of the most indica­tive RBA broad­casts ever!

David Law­son

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.