As a result of a death in the family, I came into possession of a house in a lower middle class neighborhood in the city. This was in June 07. The house was a 2 story older brick and the real estate agent said she was going to list it for less than the appraised price for a quick sale. Sure enough, we got a contract, but it fell through.
After that, interest in the house began to slow. In the meantime, me and my adult son worked and sweated like crazy to give the house more appeal. Interest picked up, but no contracts.
Time passed, the house began to deteriorate; and I didn’t have the money to make repairs. At the same time, the neighborhood was beginning to go down. It went down in “invisible” ways before visible manifestations occurred. First there was an increase in crime and dope peddling at night. Next, the upper middle class residents in the big houses one block over simply left without selling their houses.
Although my primary concern was getting that house sold, I felt deep pain for the people who couldn’t leave. I knew them as neighbors many years ago when I lived in that very same house, at a time when I thought that was one of the best neighborhoods in the city.
My personal finances went down hill and I needed money, so I contacted a “bottom feeder” and sold the house at a fraction of it’s worth. When we went to the closing, just recently, the lady at the title company had a sad empathetic expression on her face when she gave me the pen to sign the papers. “I’ve seen a lot of this lately,” she remarked. I was shocked, and at the same time relieved that, “The Gods were not urinating on me personally.”
My “tale of woe” would be just that, if it were not for the fact that it’s this countries “tale of woe;” one that was man made, and is constantly being repeated.
I’m going to parallel my “tale of woe” with some graphics and dates. In June of 07, that neighborhood was stable. In June of 07, corn was $3.00 a bushel, and gasoline was just over $2.00 a gallon. When we closed on that house, corn had gone to over $7.50 a bushel twice; once in 2008, and again in 2011. The price of gasoline had gone to $3.50 three times: once in 08, and twice during the Obama Administration; it hit $3.50 in 2011 and again in 2012. $3.50 in the commodities market translates to over $4.00 a gallon at the pump.
What does the price of gasoline have to do with “My tale of woe?” Normally, that house would have sold within 3 months or less after it was listed. It was in a stable neighborhood in the city that had been that way for my entire life, and people need a place to live. When the price of gasoline went higher than it’s ever been in the history of this country, and food more than doubled; that affected the lower middle class more than any other group of people, and that’s where this house was.
People who are living from one paycheck to the next, don’t have much wiggle room in the best of times. After food and gas more than doubled, that put pressure on them in more ways than I can imagine; buying my house was the last thing on their minds. Their neighborhood had changed more in 5 short years, than it had in my entire lifetime.
These higher than ever commodity prices are not the result of inflation. That occurs when there is increased demand and decreased supply. Demand increases when there is full employment and wages are rising. During those times, the prices on houses go up, never down.
In regard to food, there was a storage problem with corn; one farmer had so much corn in his bin that when it burst, it destroyed his house, and almost took his life. Corn is synonymous with food.
If we are not in an inflationary period, then why are commodity prices going higher than they have ever been in the history of this country? The answer is commodity market manipulation. In the past, the CFTC protected us from commodity market manipulators. Then why isn’t the CFTC protecting us now? I’ll give you a clue to the answer to that question. Almost all of the commodities bottomed in January of 09, during the last days of the Bush Administration. Next, they went right back up after President Barack Obama took office.
Now the prices are going down, just like they did in 08. Market manipulators make money when the price goes down by selling short. They can make the commodity market go any way they want it to go. They do this by buying or selling enough contracts to move any commodity market they choose in any direction they choose. They are a consortium which is directed by a master market manipulator. Sounds like science fiction, doesn’t it. But if you notice, these “unrelated” commodities move in harmony, they go up and down at the same time. How do you explain that?
The unemployment rate was at 3.5%, and gas cost about $2.00 a gallon when that house went on the market in 07. The unemployment rate was over 8% and gas cost $4.00 a gallon when I sold that house. Does anyone have a problem understanding how the price of gas and the unemployment rate affected the sale of that house and that neighborhood?
Go to this website and click on the charts for more detail.