The New Boom-Bust Cycle

Well this article is really great!!! Base on our knowledge and expertise we at http://www.InsideRater.com thinks that the New York City market might go down by 50% if the recession linger for few more years. we already see a decline of 20% in residential and 33% in commercial real estate. with that being said some properties are still selling.

Housing won't even begin to recover until our unemployment numbers start to turn around. Even then it will be a good ten years before housing returns to its 2007 highs.

At the macroeconomic level what we are seeing is a historic shift. In 1944 the Bretton Woods agreement gave the U.S.A the unquestioned leadership to run the world's economic engine, by using the U.S. Dollar as the only recognized reserve international reserve currency. From the ruins of World War II, from the demise of the British Empire, came a new world order based in the military, and economic might of the U.S.

Altough the arrangement made had it's flaws, it is undeniable that the power of the U.S. gave the world it's most brilliant, prosperous, and humane era in the history of our planet. But as time passed in our country , reserves, and surpluses turned into deficits, industrial might turned into industrial decline, and a new class of financial risk takers took our country down the path of unsustainable booms and busts on our economic sectors.

America is used up. Our deficits make sure of it in the present, and way into the future. I will not go iinto a blame game here, but the fact is that our nation is in trouble. And the trouble is not just getting out of the present recession. The trouble goes deep into our financial structure, balance of payment, regulatory systems, economic policies, health care system, social security, etc, etc.

As a result what I see is a long slog lasting more than a decade where just as the British Empire lost his power to influence economic events around the world, so too will the USA loose that power to countries like China with 1 billion people in the need of just about everithing. Let's face it, in the end we are a very mature economy, with a stagering amount of debt, and hardly any savings. China on the other hand is third world nation whose citizens have an enormous potential for consuming, not to mention the fact that they have money in savings, and the country has enormous reserves that does not owe money to any one.

Or in other words we are starting to look like the old tired British Empire, and China is looking more and more like the resurgent U.S.A. of the turn of the 20th century.

Yes, I agreed on your point " There will be another economic boom one of these days, but it will arrive suddenly and from an unexpected place."

However, I would like to re-iterrate that the buble economy will be a repeating event as long as there is a conflict between the out going economy & the income -economy. That is the conflict of the Landbased Economy & the Knowledge Economy of today.

The Landbased Economy have been going through the Boom-Burst cycle since the human civilization. 2001-2003 theat down turn is the 1st conflict between the said Landbased Economy & the Knowledge Economy or the dot com economy. Unforetunately, Expert are illerterate about the Knowledge economy. & the relationship about the down trend on the aging of the Boomer whom have create the boom for almost half a century.

Couple with the clever economist who used the stocks & shares derivatives to create more paper money,. With the policies of renumerations based on so call "Network Performance" & "Reward on creative Risk Taking" the wages of Have & Have-not are miles apart from the great depression of 1929.

To justified for multi-millions in profits my corporation, knowledge based jobs are farm out to Devloping countries like, China, India; Fillipine, even Africa. For the software jobs more so are in India. Then the corporate executives are asking more cheap labour to be inported to this county. So as to justified for their senior executives big fat salary based on so call "ROI" or "Profitability".

Now, looking at the Engineers, College & University lecturers, Technicians, Internet Designer, Electronics Technologist & even NASA sicientists that loose their jobs... =How could they get jobs & incomes to continue their living??

There are almost 56millions jobless that includes those entrepreneurs & part-time workers & those retirees.... That is the seriousness of what we are facing today.

The message for President B. Obama & the both houses; unless we bail out our own people-the Knowledge Capital of United State of America ( The Main Street"),that is everyone have a income job & shelter, If not; there would not be any real sign of getting our Nation torecover & lead the world in the Knowledge economy era.

Gross is generalizing. Yes, industry has undergone paradigm shifts in the past, and those shifts are often painful. I would reverse his cart and horse and say that it was the inevitable looming paradigm shift that caused the recessions as much as the recessions that caused the paradigm shifts. But not every industry that suffers decline is gone forever.

The housing bubble wasn't a bubble because housing only had imaginary value - it was a bubble because of the finance models behind it. Housing may not lead the recovery, but it's not gone forever. The fundamentals of supply and demand will make real-estate a valuable market for years to come. People are not going to stop buying houses forever because of this recession.

It only makes sense that this housing crisis is far from over. The problems began in 1995 when Congress began pushing loans to people that could not afford them. From 1995 to 2005, people financed and refinanced to purchase even more that they could not afford, all based on the bet that home values would not drop. Everyone is to blame, but I like to blame the banks, Realtor and the appraisers,. Home buyers had to trust those in the real estate industry. What do I know about home values, they all confirmed the value was worth the price.

So I think it is reasonable to assume that the home values will drop to what they were in 1995, since wages have not risen any since before 1995. And from what I can tell from home sales, this assumption is right. Low cost $150k to $200k homes are selling, higher priced homes are sitting on the market.

But unless the continued job losses subside, the prices will continue to fall. We need business, manufacturing and industry to return to our country. I believe the next administration will be the one to make that happen. God help us all.

Unfortunately, this is true, and the only solution posed by the american people is the federal government. California can not fix itself either. 49 states to go and as businesses fail, more people will lose homes, apartments and jobs. All I think is that the consumer economy is failing with nothing to stabilize any part of our economy.