The Case-Shiller home price index has hit a new post bubble low seen in this morning's release. Home prices fell 4.2% in the first quarter after falling 3.6% in the fourth quarter of last year.
In the mist of every city across the country now seeing a waterfall decline in home prices, there is Washinton D.C., which recorded a month over month rise of 1.1% and an annual rise of 4.3%.
The sacrifice to support his enormous paycheck must be made by the rest of the country, seen in home prices collapsing everywhere else, who must support this government spending.
This has not come in the form of higher taxes, but in the hidden tax of inflation, as the Federal Reserve purchases the debt our government recklessly borrows and spends. Americans around the country must then pay higher food, gas, medical, and living costs. It is a sleight of hand tax, unseen by the untrained eye.
By paying more for these goods, they have less to spend on other items, such as a monthly mortgage payment.
This scenario will ultimately come to an end. Those buying into a Washington D.C. housing market today are the equivalent of those buying into a Miami condo market in 2005, which was supported by.....Miami condo price appreciation. The rest of the country at some point will be unable to stomach either higher taxes or higher inflation to pay for a government worker to live like royalty.
D.C. is the last great bubble in America. It is the living symbol of the overvaluation of both our currency and our treasury bonds. The explosion will be historic, and those that take the short end of the trade will become the next subprime legends.