Friday, May 13, 2005

Real Estate Bubble

Safe Haven | Real Estate Bubble
The Asian currency crisis in 1997-98 caused housing prices in Indonesia as well as other regions, in dollar terms, to decline some 80% virtually overnight. Currency instability is one of many external factors that can contribute to a Real Estate bust, and the United States is certainly not immune to financial crisis of that sort!

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"In the United States before 1960, people were living in a less avowedly capitalist economy, and they were not primed to believe that their well-being depended in large measure on their property. Today, with good public information about prices & widely available, our increasing public commitment to market solutions to economic problems has led people to worry more about home prices, and hence to make them more prone to the kind of feedback that generates bubbles.

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