Poliblogger notes that Greenspan is bullish on mortgage debt. As I've noted before, secular trends in rising real estate prices can be upset by shrinking populations. If a new black death were to sweep the world, dropping worldwide population by a third, housing prices would crater for a long, long time as excess housing stock was absorbed.
But plague and war are not the only way that population can drop as the EU is finding out with it's sub-replacement fertility rates. Greenspan's a very bright fellow but I think that he might want to make the implicit assumption in his analysis explicit. The growth of mortgage debt is only a good thing if the US does not fall into negative population growth.
Posted by TMLutas at March 16, 2004 11:52 AM