The Keystone Speculator's Housing Market Indicator; United States Is in a Housing Recession for 20 Months and Counting

Times are truly different this time around. Anytime that the housing market dipped into recession, an overall US recession quickly followed. Not this time. Decades past, life was simpler. No tech wizardry, just folks going to work each day and then having plenty of leisure time each evening and on weekends. All that mattered was the housing and auto industries. When they went south, the US was in recession. Not anymore.

Computer technology arrived on the scene in a big way through the 1980's and 1990's many of us starting with the old amber screens and floppy discs that needed formatted using the DOS program. Chips run computers. Thus, as the railroads opened the door to an economic boon, especially in the Midwest and Western US a century ago, semiconductors, chips for short, fuel the economic path forward for the last 30 years and ahead with NVIDIA's Jensen waving his AI chip in the air.

The US is in a housing recession for 20 months, an ongoing manufacturing recession for over a year, and a labor recession that will be one year old next month. Housing Starts peaked 2-1/2 years ago and have dropped to the lowest in 4 years. How could the United States not be in recession? One reason is the tech industry and chips but there is a second reason; the Federal Reserve.

The Fed's money-printing since 2009 is so obscene it would make Caligula blush. It enriches America's wealthy class to stupendous heights while screwing common folks that do not own any stocks. Further, once the COVID-19 pandemic hit, the Fed fired another huge money bazooka of monetary stimulus, and then Congress stepped in with fiscal stimulus, showering the rich Americans with more free money, manna from heaven. Folks, that dough goes into the stock market driving asset prices bigtime higher and the upper middle class and elite privileged are the ones that own stocks. It is a great racket if you are rich and part of the club, but you ain't part of the club, as the notable scholar George, ahead of his time, said. It will never get fixed.

It is enough to make you vomit. Look at the chart above. The housing market takes off higher with the Fed's and Congress's thumbs on the scale. Obviously, capitalism does not exist. America is a faux free market crony capitalism system on its last legs. Human greed destroys everything throughout man's 'civilized' 5,000 year existence.

Anyhoo, the joy in tech and semiconductors, and the enormous wealth effect felt by America's wealthy class, and the upper middle class sycophants that service the filthy rich, are keeping the US economy afloat over the last year and avoiding overall recession.

Retail Sales earnings and data are important in the week ahead but generally speaking, the top 20% wealthy Americans are accounting for about one-half of the spending currently. Say no more. The middle class is gonzo. America's now lower middle class, disabled, homeless, minorities, and working poor do not have a pot to p*ss in working two jobs and still unable to make ends meet. Meanwhile, America's wealthy, in bed with the Federal Reserve, enjoy vast riches due to the enormous stock market gains. They are still spending money preventing recession and asking why everyone is so glum?

Even the wealthy stop spending eventually. How many brand new $800,000 McMansions, $90,000 Mercedes convertibles, and $5,000 refrigerators do you need? And on the chip front, what happens when the consumer sales for gadgets go south and tech companies have less money to spend on developing the new chips and gadgets? Everything slows down of course; it is called recession.