This was all part of the recent bubble economy caused by lowering interest rates so low that people who should have been perpetual renters, turned into home buyers. The economy drove like mad and prices skyrocketed.
Now, the prices of homes are falling back to sanity, and demand for new homes and new everything else is falling off a cliff. The producers of 'stuff' are reducing their output drastically, and soon the prices of 'stuff' will follow demand right back down to where the prices were before the bubble began inflating.
There will be less demand for borrowing large amounts of money to build equipment to make stuff. This leads to less overall money in the economy, otherwise known as:
Deflation.
Leading to lower prices for everyone. Somehow, it doesn't seem like a terrible thing that prices of milk, cheese, corn, wheat, gasoline and natural gas are all going to fall to what they were 5 years (or more) ago. Until you consider that the gains made since then created jobs that are currently being lost in their hundreds of thousands in the USA alone.
Too much of that sort of thing will turn the nasty recession we are already in into a genuine Depression.
Which, if you had been reading Mish for the last, oh, couple of years, you would have known was coming. To the laity at CNN it comes as a surprise.
Look for more stories in the same vein as that CNN story in the coming months, along with lower prices on pretty much everything you need to buy to keep living, and remember:
I told you so.
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When the Fed started making noises about printing 2.5 TRILLION new dollars to
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