Homestead mailing list

[Clansgian AT wmconnect.com]

In a message dated 5/9/2005 11:59:07 AM Eastern Standard Time, 
genegerue AT ruralize.com writes:


> 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.
> 

OK.  I must be suffering some sort of lapse here, where 2 plus 2 is supposed 
to be 7 but somehow I keep coming up with a different answer.  I've read this 
paragraph a dozen times and every time it reminds me of the old SNL skit 
where 
someone is asking Regan about his econimic policy and he says, "Picture the 
economy like a big blueberry pie.  You cut that pie in half.  Half of the pie 
pays for entitlements.  Half the pie pays for defense.  And half the pie pays 
the interest on the debt."  

What I mean is this:  if people are using the equity in their home to make 
general purchases, then they no longer have that equity in their home, do 
they?  
Else all they are doing is making a loan to themselves.  They are kiting 
their own checks to themselves, as it were.  Seems to me that this would add 
to 
the 'perfect storm' likelihood.

James