A Happy New Year message from Peter Schiff: The value of your house is still 20% too high.
By mw | Related entries in Bad Decisions, Economic recovery, Economy, Federal Reserve, Fiscal stimulus, HousingWhen an economic bubble bursts, normalcy can only return if the price excesses created during the bubble are wrung out of the market. A recession is often a painful but necessary market mechanism that corrects the pricing distortion and consequent misallocation of capital that occurs in a bubble. When government intervention prevents the mispriced asset class from fully deflating, capital continues to be misallocated and economic malaise lingers on. This is the takeaway message from Peter Schiff’s Wall Street Journal editorial.