by John Rubino
Dollar Collapse
Financial history includes plenty of extreme years. That’s not surprising, since we’re emotional beings with short memories. Combine those two traits and you get cycles, many of which end with a bang.
Even so, this one stands out. A full accounting of the ways in which today’s financial markets have exceeded previous bounds of rationality would tax the average reader’s attention span. So let’s just hit a few high points.
Home prices up 14% during a recession
In a typical downturn, housing tends to either stagnate or contract, depending on what it did in the preceding expansion. This time, home prices had been rising for a solid decade, to levels comparable to the bubble year of 2007. Then came the pandemic lockdowns and a deep recession … and home prices spiked. 14% in one year is epic when you consider that most houses are financed. If you put down 20% on something and it then rises by 14%, the return on the money you actually risked is 70%. In one year. While you’re living in it. Almost unprecedented.