hanrahan, its true that central banks are tightening liquidity but the question is to what extent and what impact will that have? Despite the banks tightening, there is also evidence of reasonablely high liquidity still. The price of gold is quite responsive to levels of liquidity, for example, and thats rising again. The aussie experience of tighter liquidity indicates that this by itself, unless excessive, may not lead to an implosion in house prices. Its not a bad indicator because housing is essentially a domestic market and the aussie tightening preceded that of the rest of the world mostly. I reckon trade the market that you see atm, but pay much closer attention to risk management than in the previous three years. cheers!
