The above graph depicts the exponential growth of GDP and also the US 
   Housing Valuation, both in Trillions of USD.

           Source : Federal Reserve : Flow Of Funds

      A larger scale graph below, shows that the linear growth started turning
   exponential in 1965 for GDP, and a year later in 1966 for Housing Valuation.

      Such a close relationship between the two is not just a coincidence. Rising
   home values have made Americans feel wealthy. And tapping into the Home Equity
   has been the source of purchasing power. Fuelling consumption and GDP growth.

      Since 1980 the Housing Valuation has exceeded GDP.

      Since 2000, it also appears that The Housing Bubble has not been pushing up 
   the GDP as much, and the Gap between the two has been rising.

      May be the Housing Bubble is no longer effective in pushing up the GDP as
   much. 
  
      This may well be it's final sprint before busting after a 40 year expansion.

      Why do I call this the Housing Bubble?

      Propping up this Bubble has been the most lucrative investment the US could
   have ever made.

      A small percentage of all homes are sold every year. In the year 2004, about
   6.78M houses were sold per NAR. Census Bureau puts the estimate of Housing Units
   in the country at 122.6M for 2004.

      That is just about 5.5% of all the homes. This is a record, for an average 
   year this would be much less. Say 5%, just for the sake of this discussion. 

      Now if the sale prices of these 5% homes could be inflated by X percent. Then
   the market value of the remaining 95% homes also rises by X%.

      You get a 1900% (95/5=19) return on your investment in just one year. 

      This is The Best Investment Ever.

      How did this get started?

      It was in the mid sixties that the US started creating more dollars than it
   had the gold to back them up. To fight the Vietnam War and also support the 
   massive welfare programs at home.

      Now the Fed could print as much money they wanted, as they were practically
   off the gold standard. M3 exploded. Officially, the dollar was delinked from 
   gold only on Aug 15, 1971.

      Why stop with just Govt. spending. If this newly created money could be
   handed directly over to the consumers, they would spend it and fuel economic 
   growth.

      This along with the low interest rates of the Mid sixties, gave birth to 
   the Biggest Asset Bubble ever. Home Equity extraction began, and has continued
   as of today. 

      For Americans, their home was not just a shelter any more. It became a 
   way to create wealth.

      The Fed also makes insane amount of money available to home buyers. Who keep 
   bidding higher and higher to get into a home, further inflating home values.

      This has been happening year over year for nearly four decades. The 1945-1980
   graph also puts the birth of this bubble pretty much around 1965.

      So how much Home Equity have Americans extracted from their homes since 1945?

      Graph Of Home Owners Equity vs Mortgage

      This phenomenon has gotten out of control since the Fed started lowering the
   interest rates after the 2001 recession. The results, the graph speaks volumes.

      This is no different than Milton Friedman's infamous "helicopter drop" 
   of money. Except, you just need to apply for a home equity loan.

      This Giant Bubble has transformed the US into an Economic Power House.

      The World's Largest and most Robust Economy is nothing but One Gigantic 
   Housing Bubble.

      The last real estate boom of late eighties and the resulting recession, merely 
   look like a small bump on the graph. 

      Those who think that was a bad recession, we are yet to see an actual decline
   in the Housing Valuation. What will that be like?

      I think what we have seen in the last five years, is the blow-off top of a 
   bubble, which has been expanding for nearly 40 years.

      When this bubble pops, so will end the US dominance of the world.

      That begs the question, Is Depression Next?