The housing market has been on upswing over the last year.US real estate prices are back to the 2008 days.Seller's who bought their property at the peak of the bubble around 2004-2006 period had to wait a decade to back their equity.
The question is whether the rise of the US economy this time is for real.Critics like Jim Rickards have criticized the Fed heavily and strongly believes that another stronger,longer recession is around the corner. Rickards points out that the FED has been indiscriminately pumping in cash to keep the inevitable from happening.Another possibility that he points out is that the next global recession could be triggered with the collapse of the Chinese economy and not from home grown market forces.The Chinese -US economic tango is well documented.China holds majority of the US stock to keep the yuan low and hence keep its position of a manufacturing hub intact.If a scenario occurs where the Chinese does a massive sell of the US foreign debt, the markets could tailspin into panic mode and would prove to be a domino effect too strong to withhold.
In between,buying in the US market has gone on an upswing with the employment rate looking good.Critics like Rickards again point out that the jobs that are created are part time jobs not full time stable jobs.
People prefer to buy rather than rent.Most people in US would be happy to see their house prices appreciate close to 1 to 3 %.Gone are the crazy expectations of massive increase in real estate value after the hard lessons of the recession.Statistics of properties sold show that the high sales are in the range of 350 000 $ to 450 000 $ in a place like Minneapolis which could be considered a upper middle class range.This again does points out that the real definition of middle class in US needs to be clearly defined.Families earning 200 000 $ per annum consider themselves middle class in US.Considering that the average family income of a US family is 56 000 $ , this does not make sense.
The rise of Bernie Sanders in the upcoming elections is a clear indicator that the middle class is increasingly feeling isolated from mainstream.Democratic socialism is making waves in US.With most of the democracies going right wing across the world,it would be interesting to see how Right wing conservatism from the likes of Donald Trump would come out in the election.
Accepting Syrian refugees & Islamic terrorism is again a hot area of debate on the election trail.The Democrats have been continually refusing to use the work "Islamic terror" and argue that forming a coalition and air strikes are the way forward.The Republicans on the other hand have been blowing the fear trumpet.Tedd Cruz and Trump have come heavily on Obama for the Iran deal and for not sending in ground troops.However Cruz and Trump have not explained on how they plan to finance another US ground troop invasion.
Europe is struggling with the biggest exodus of immigrants after the World War.Recent incidents of sexual assaults on women by refugees in Cologne on New Years' eve has led to the popularity ratings of Angela Merkel falling.David Cameron has called for more purposeful expression of liberal values.With the Euro in a crisis,it would be interesting to see if Britain chooses to remain with the EU or drop out of it in the days to come.France has joined the US led airstrikes after the attack in Paris.
Putin has snatched the initiative from the West with Syria.He has made it clear that keeping Assad in power is the best option at the point.Putin has realized that the US hegemony after the double blunders of Iraq and Afghanisthan is on the decline.
Meanwhile in India,Modi government is trying to push through key reforms like GST with a disruptive opposition like Congress playing spoiltsport.It would be critical for a Modi let BJP government to assume power again in 2019 if the key initiatives like Make In India,Digital India and financial inclusion of the poor are to take place.
2016 would be a key year to watch.
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