High housing mortgage costs are a risk to whole economy

It should sober everyone, that the number of applications for new mortgages or houses, is at the lowest level since 1996. Think about that, the lowest in 27 years. Now, what does that tell us? It tells us that the Federal Reserve approach, which is a demand side, punish the consumer, punish the American worker is beginning to work, because of course, it’s punishing people to a point in which they can’t afford to buy a house. Now, what’s the effect of that? Well means, first of all, if you’re a young person, your chances of buying a home just got a lot worse. To me. Second, if you’re somebody who has spent your lifetime paying off the mortgage on your house, and that was your plan for your retirement, the value of that house just dropped, because people can’t afford to buy it. There is a direct relationship between the price of mortgages and the price of houses, the more expensive the mortgage, the less you can afford to buy as a house, the cheaper the mortgage, the more you can afford to pay for the house. And so the Federal Reserve has followed a demand side approach to punishing demand by raising interest again, and again. And again, because they’re terrified of inflation. They haven’t defeated it. And frankly, the way they’re going right now, they’re not going to defeat it, because they’re driving down supply, at a rate faster than the supply of money. So the price of gasoline is going back up, the price of food continues to go up. President Biden already has the worst presidential inflation rate since Jimmy Carter, no president since World War Two, except Carter has had a worse record on inflation than Joe Biden. And it’s going to continue to be bad. And the Federal Reserve’s answer to that is to punish the American people, by making it so expensive. They can’t afford to buy anything. That of course, has a huge effect downstream. If you can’t afford to buy a house, that means nobody’s gonna go to Home Depot and buy anything for the house means nobody’s going to be manufacturing dishwashers, or refrigerators, or furniture, or carpets. So all the way down the line, there’s a ripple effect on housing gets sick, the whole economy starts to get sick. I think you have to watch carefully and be and really be cautious in the next year or two. Because the very approach they’re using is an approach which is guaranteed to hurt most Americans. And they’ll tell us, the medicines good for us. Frankly, I think we need a lot better approach, a supply side approach that says, Let’s encourage jobs, let’s encourage production. Let’s mop up the inflation with more goods and services, not punish the American people. And let’s get government spending under control. So the government’s not pouring trillions of dollars of paper into the economy, which is now I believe, the largest single cause of the inflation we’re living through. The time to act is now the price of the mortgage. And the collapse of mortgage demand is a signal that we really need to change what we’re doing and get serious about getting a healthy American economy back