Senate Candidate Peter Schiff Vs. Chris Dodd on Fannie Mae and Freddie Mac over the years
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One dynamic that Mr Schiff doesn't talk too much about is the role of restricted supply development on supporting the property bubble.
ReplyDeleteIn New Zealand, my home country, this has been fundamental in co-providing for the conditions for our bubble (we've had similar problems to America - though not to your country's diabolical extreme).
I will explain my point simply: If people could build a new house on the immediate outskirts of their city for, say, $200k, then why would they pay for the equivalent for a $400k established house? The truth is they would not. Supply restriction is and has been a supporting policy for this disaster.
Policies for supply-restriction have been integral in New Zealand, and I understand there is a strong relationship with this within the American market too. You might like to try this link:
http://www.demographia.com/
And also my own straight-forward explanation relating to the New Zealand scenario:
http://andrewatkin.blogspot.com/
Andrew Atkin
(Great Schiff bog - thanks for your efforts. I have been enjoying it.)
Just to add from my first post;
ReplyDeleteHere is the a more specific link from the demographia website, relating to America's property market and the role of restricting land supply for development, so as to create the bubble.
http://www.newgeography.com/content/00369-root-causes-financial-crisis-a-primer
Andrew Atkin