Don’t Get Excited About CPI and Housing Data

The more economically savvy I become – the more difficult it is to believe many of the government’s statistics that are quoted as fact.  Or maybe it has become easier to understand how and why the statistics are manipulated by various stake holders.  For example, it doesn’t take a brain surgeon to realize that there is a glut of housing inventory. I am amazed at how many houses are for sale as I drive around town.  However, there are new homes being built on every vacant green patch of land.  If the following assertion by Peter Schiff is true – there will be some CEOs wearing striped suits. 

“Either home builders do not appreciate the gravity of the supply and demand imbalances, or they are simply building in order to convince stockholders that the future earnings picture looks bright. Company insiders can only continue selling their shares if they convince investors to keep buying. A sharp reduction in starts would confirm just how dire the housing situation really is, and jeopardize many executives exit strategies.”

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