An Economic Recovery Driven By Foreclosures? Interesting idea…

In roaming through my research sites, a fascinating possibility was offered up to account for the “green shoots” and “economic recovery” that we have heard so much about lately.

The theory starts with the millions of foreclosures in the United States which have created millions of home owners that are living in their homes for free.

Well, if you are not paying a mortgage, interest, property taxes, HOA dues, Association Fees, home owners insurance, PMI or maintenance costs…then all of that money you are not spending, can be spent on new cars, new televisions, new gadgets, vacations, new furniture, new boats, new ATV’s, new motorcycles, paying off credit cards and student loans, invested in the stock market, buying gold, etc…

It may well be that this “economic recovery” we are experiencing is nothing more than foreclosed home owners spending the mortgage money on “stuff.” This would look like a recovery driven by “consumers.” This would be false.

If this theory is true, then this “recovery” is headed for a cliff. Again.

Categories: Economy, Government Failures, Housing Market

Tags: , , , , ,

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