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Tuesday, March 26, 2013

American Dream Is Back But Nothing Has Changed

The American Dream based on the illusion of easy money is back.  Unfortunately, the Dream's back but plagued by the same old problems of rising debt, falling standard of livings, and the growing disconnect between illusion and reality.

Easy money provides not a foundation of strength (stone) to support but rather weakness (sand) to destroy.  As the recovery progresses, the weight of the debt needed to sustain the recovery overwhelms the foundation built on sand as the economy enters a weak cyclical period.  This means the American Dream will be once again shattered just as the public embraces the old, repackaged as new, economic paradigm called the plateau of prosperity.

Chart:  S&P Homebuilders (HB), HB to Gold Ratio (HBGOLDR) and HB Cycle Z Scores (HBC1 & HBC2)


American Dream Is Back, So Are Stocks: CNBC Survey

Key measures of the nation's attitudes toward their homes and the stock market surged in the latest CNBC All-America Economic Survey to their highest levels since the beginning of the financial crisis.

The percentage of Americans who believe their home prices will increase in the next year rose 9 points to 33 percent in the March survey compared to November, the biggest jump in the survey's six-year history. It hasn't been this high since December 2007, although it remains below the high-water mark when the survey began in March 2007 and 48 percent of Americans believed their home prices would increase.

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