I have been profoundly depressed lately. As I do more and more thinking, I have come to the conclusion that the whole concept of a "housing bubble" has been very costly to me. When I decided two and half years ago that I should rent, because the cost of ownership became too expensive, I had no idea that it would become so much more expensive. All the financial books I have read which told you to save as much as you can, don't go into debt, buy on the cheap, etc....they have all served me poorly up to date. The more I think about it, the more I realize that there has been a tremendous tranfer of wealth in America, from savers to borrowers. From the deleveraged to the leveraged. Those of us who are uncomfortable with high debt loads have been crushed by people who have no such fears. I now believe there will be no "bust" in real estate. The only thing that will happen is inflation eating away at the gains. Perhaps there will be a 10-15% "correction". So much money has been made in the last 5 years, that people can last for another 5 years without having to drop prices. It seems to me the government will do everything in it's power not to allow asset prices to fall, as we are now an asset based economy. One could argue it is a matter of national security, since our wealth is on of the two things that separates us from the rest of the world (the other being our military). And, our wealth now is largely asset based as we really have a very weakened manufacturing sector. Furthermore, even if the value of housing erodes over 3-5 years, is one really prepared to wait it out? Well, if you are in your 20's, perhaps it's possible. But, those of us with kids can't really wait that long. What is the point of buying a house once your kids are in college? It is extraordinarily sad that many of us will have to grossly overpay for our house, and watch it's value erode, even though we didn't enjoy any of the so called "equity cushion". I don't know if Greenspan was right, and I don't know if he was wrong, but he did what he felt was necessary to save the economy. Massive asset inflation obviously ensued, and those of us who live in expensive areas of the country, who were caught on the wrong side of this avalanche will have to pay a dear price. I don't see any winning strategy at this point. We will all have to pay a heavy burden for the unwinding of this rediculous exercise in Keynsean inflation, but not all of us enjoyed it equally. I hope we will all learn valuable lessons from this debacle.