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[Gene GeRue <genegerue AT ruralize.com>]

Present economic policies seem foolish to me. I know little of high-level 
finance. I do know real estate so I will only comment on that. The article 
included this:

> The United States weathered a sharp decline in the stock market just a few 
> years ago, in large part because of the housing market's strength. But a 
> sharp rise in interest rates would literally hit home. For new home 
> buyers, or for people with adjustable rate mortgages, 200 extra basis 
> points of interest on a $400,000 mortgage would represent $8,000 a year in 
> extra payments. If mortgage rates were to rise sharply, housing prices 
> would level off and perhaps do the unthinkable: fall.

If you would understand housing prices, study an area of rising 
population--Southern California--and an area of declining or wavering 
population--South Dakota and Iowa come to mind. People need a place to live 
and they will pay whatever it takes to put a roof over their families.

Southern California has in fact experienced falling real estate prices. But 
over the years, on a much steadier course than any Wall Street stock, real 
estate prices have risen faster than wages and faster than inflation.

As for a "sharp rise in interest rates," while possible, the likelihood is 
slim. I know that Alan Greenspan is keenly aware of the value to the 
economy of consumers using home equities for general purchases because the 
broker of our company, Realty Executives, was among the Realtors quizzed 
closely by Greenspan on just that subject.

Interest rates are most closely tied to the bond market, not the overnight 
Fed rate. Investors choose income-producing securities based on total 
return and security. Earlier in the article was the statement, "Throw in 
rising interest rates, warnings of a housing bubble and the potential for 
higher inflation and slower growth (a k a stagflation) - and you can 
understand why some economic analysts may be plumbing the New Testament for 
inspiration."

The article author is here not reporting news; he is attempting to create 
news with hyperbole. Interest rates are in fact not rising. They have been 
mostly around or below six percent for the last three or four years. Slight 
rises have been followed by slight decreases. I expect rates to rise this 
year to less than seven percent, still a historically wonderful mortgage 
interest rate. And as I have noted before, the "housing bubble" is mostly a 
fabrication of writers and speech makers who reflect the growing media 
fixation on extremism, just one of the reasons why journalists are held in 
lower regard than members of the DC Whorehouse.

Yes, last year's over-50 percent appreciation in Las Vegas is unsupportable 
and that insane place will experience price adjustment. In most areas of 
the US, housing prices are doing what they have always done: reflecting 
supply and demand. FWIW I have sold houses with sixteen and eighteen 
percent interest loans.

Resist strongly those who would manipulate your brain with movie-title 
leads. There is no economic perfect storm abrewing. The sky is not 
falling.  Conduct your personal financial affairs prudently. Do not look to 
our over-hyped leaders for direction.

Buy a house. If you have a house, buy land. Pay for the land with city 
jobs, prepare your family for a rural lifestyle, accumulate tools and 
skills. When the land is free of debt sell the city house and go make a 
good life.