A new housing bubble is clearly visible when the real home price takes into account the effects of inflation and therefore allows for better comparison over time.

The ratio in the chart below divides the Case-Shiller Home Price Index by the Consumer Price Index (CPI). The Case-Shiller Home Price Index seeks to measure the price of all existing single-family housing stock.

Based on the pioneering research of Robert J. Shiller and Karl E. Case the index is generally considered the leading measure of U.S. residential real estate prices and reveals a new housing bubble.

Market Cap -GGP Ratio

When inflation is high, prices as measured by the CPI increase, and the purchasing power per unit of currency decreases. The Case-Shiller index has a base of Jan 2000=100 while the CPI has a base of 1983=100. Therefore, it is the trend over time that is significant and not the absolute ratio values.

As you can clearly see in the chart, when the ratio gets near .6 a new housing bubble is achieved and real estate prices head down. The higher the ratio, the faster prices they head down.

Just look at the prices and how they have risen…

housing-bubble-2-0_orig

The charts above and the one below are clearly telling you that a new housing bubble is closing in on us now and is ready to pop.

housing-bubble-2-0_orig

Do you remember what hit in 2008, because this one will be much larger with sustained reach?

The Case Shiller Index is now 160% higher than in January of 2008. And as history showed us, since 1890, a decline of biblical proportions is coming.

When you add the New Housing Bubble to the Money Supply Chart, to the Market Cap to GDP chart, to the Dividend Yield Ratio, to the Market Cap to GDP Ratio,  to the Screaming S&P500 Dividend Yield, and to the current S&P500 P/E Ratio, you better be prepared for a long-term sustained deep economic crash. This will be a stock market and real estate crash will dwarf 2008.

No one can afford to live through a 7 to 15-year depression, so please prepare now because the warning signs are now clear.

We are so concerned that is coming or may have already started, that we are offering all new subscribers a 25% Promo codeWealth25” that will lock in for life. The discount is available immediately and includes our private member’s blog.

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