The Second Housing Bubble is upon us, warns David Stockman.

According to the mainstream media, we are in a slow but solid recovery. Not a day goes by that we don’t hear some variation on the theme. Often, we are shown housing statistics pointed at as “a bright spot” of said recovery. Things are not always as they seem, however.

David Stockman, former director of the Office of Management and Budget under Ronald Reagan, calls it as he sees it: just another bubble. “In a world of medicated money by the central bank, things aren’t what they appear to be,” says Stockman, who sees “no real organic sustainable recovery.”

In short, Stockman is pointing out that the seemingly improving housing sales numbers send a false message; it is key to look at WHO is doing the buying. The lion’s share of the home purchasing in recent memory is conducted by “professional investors like hedge funds and private equity firms.”

A true recovery is marked by healthy sales to first-time buyers and trade-up buyers. The young people who would typically be doing the first-time buying are too bogged down with student loan debt and uncertain employment to make their purchases, while the boomers normally expected to be trading-up for better housing are actually trading-down on the whole, due to unwise financial decisions and lack of savings.

The sales statistics flouted as evidence of a strengthening recovery are just the signals of another speculative bubble, as investors crowd the market.

Government intervention into the housing market produces nothing but problems, and brought us such foolishness as “no-downpayment loans, liars loans, and a degradation of lending standards.” Stockman directly points to Government Intervention in the housing market as one of the main roots of our modern housing-market woes. When it comes to home ownership vs home renting in the market, Stockman succinctly quips: “Let the market decide.”

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