When Congress is in session.

The housing bubble is currently leaking, but it is susceptible to bursting because of an event out of most people’s control. Some event will occur, seemingly unrelated, that will cause housing prices to stop trading up, or even side ways and instead make prices trade down. Everyone armchair economist cites higher interest rates as a catalyst for maybe tanking the real estate market, but the spark that pushes interest rates higher also requires a catalyst.

Thanks to the Chinese buying our government bonds to peg their currency, our interest rates have stayed at historically very low levels. One would think that Congress might want to refrain from giving the Chinese a reason not to by our bonds. Unfortunately, some in Congress would prefer to score political points and try and take a less diplomatic route.

When the Chinese can no longer make worthwhile profits shipping us their manufactured goods, they will also be unable to buy our government bonds, an interest rate will automatically go up.