I view of a related discussion on the ‘UBC housing’ thread yesterday, we note this timely Australian article today [from 'Are economists ignoring Australia’s property bubble?', Philip Soos, theconversation.edu.au, 20 Sep 2011].
“One aspect of housing and stock market bubbles continually repeats: the vast majority of economists either miss or deny their existence.
In recent years, enormous asset bubbles have burst in many countries.”
“In Australia, our $2 trillion housing bubble has seen prices rise by 127% from 1996-2010, and every fundamental indicator is off the chart.
But while it seems logical to conclude that Australia’s property bubble will inevitably burst, very few observers seem willing to do so.”
“By definition, an asset bubble requires the vast majority of the public and economists to participate in the mass delusion that prices will endlessly rise.”
“Many leading economists whose analysis and commentary the public relies upon have so many conflicts of interest it would fill a small book. Consultancies, university chairs, endowments, six-figure salaries, and industry directorships comprise part of the package that ensures economic “thought leaders” within government, industry and universities speak the words pleasing to the rich.”
…and, one might add, in Vancouver, we’re ALL ‘rich’.