Cracks in the System - Housing

As I talk about my hopes for a better system in my series on Trusted Space - I also will occasionally post about the inevitability of the current system failing decisively. My test for inevitable failure will be the "Wile E Coyote Test". Situations where the force of gravity will finally have to prevail.

Today I saw this hidden away in a long text article in the Times on the housing bubble. Click to see full size

Too often we are offered statistics with too short a time period. This plot feels right to me - with over 100 years of data. The full madness of where house prices are is revealed. Of course underlying this is the picture for household debt in the US.

What I like about this plot is that it shows over 50 years the growing divergence of debt to income. We see not only the unnatural rate of growth of debt itself but the increasingly vulnerability of Americans to pay the piper if anything would happen  - SUCH AS A COLLAPSE IN HOUSE PRICES.

This is a system with no resilience that has focused its energies not in assets that would be productive but in a house of cards.