Below is an excerpt from a very informative article written by Jeff Nielson on Sprott Money. This is a must read for anyone following my site. Back in 2005-2006, I told friends and family, actually anyone who would listen to me, that housing prices were being artificially inflated and this would end badly. As we all know, the housing market crashed in 2008. Hundreds of thousands, if not millions, of persons lost their homes through foreclosure. This has been termed as the biggest land grab in history.
In the past couple of years, I have seen the same trend that was happening in 2005-2006. Once again, housing prices are skyrocketing. Because we have not fully recovered globally from the Great Recession, the results this time will be far more catastrophic.
We already saw that having only one buyer in the market meant that real estate prices would go as low as they could possibly go. Thus having “everyone” in the market (at first) obviously means sending prices as high as they could possibly go – ever. (Can you say “bubble?”)
Now observant readers should begin to see the “fraud” previously mentioned taking shape here. Knowing that the lowest, possible mortgage rates guarantee the highest possible prices, our governments – more specifically, our central banks – took interest rates as low as they could possibly go, and froze them there.
The central banks have taken interest rates as low as they could possibly go, to deliberately create real estate bubbles, all across the Western world. Then they froze these ultra-low/ultra-extreme interest rates, so that these bubbles could grow to their maximum, possible size.
How do we know this was deliberate fraud, and how do we know that our (corrupt) governments are willing partners (actually servants) in this fraud? Simple. To begin with; the central bankers themselves already proved that ultra-low interest rates don’t work. That case study is called “Japan”.