In truth, the flight to the real signaled a rush to consumption (housing is consumption) at the expense of the productive economy.
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Encouraging signs, like improved housing markets and consumption, appear offset by stagnant labor markets and signs of structural unemployment.
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The Bank of England has argued for some time that the link between the housing market and consumption has attenuated.
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Foreigners are going the other way, recognizing that aging shifts the world's largest per capita stock of individually owned assets toward better housing, more consumption and greater risk-appetite for investment opportunities.
Last year Mr Greenspan gave several warnings that a slowdown in the housing market could hurt consumption.
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In place of consumption and housing, the report says, business investment will expand.
Moreover, relying on housing wealth to fuel consumption might create a property bubble.
The result has been a housing boom that has kept consumption afloat, because people have felt richer.
This includes both residential fixed investment and consumption spending on housing services.
Since the beginning of July, which is what the Beige book covered, housing data has improved and consumption seems to have picked up.
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Although the housing market may be slowing, consumption is booming and companies' investment has picked up.
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And if the productive economy of the mind flourishes, consumption of existing and future housing stock will surely take care of itself.
For example, a drop in Treasury yields would lower borrowing costs for consumers and businesses, helping to stimulate consumption, business investment and housing.
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Autos and housing are two of the largest items of consumption in any economy.
Cash extracted from housing in this way appears to have fuelled consumption directly during the past year, as other sources of income growth and wealth have fallen away.
What we should look at is what's happening to consumption, what's happening to housing, what's happening to big sectors like autos.
With consumer debt at a record high and the housing market fragile, the downside risk to household consumption could be higher than the Bank is contemplating.
Consumption figures also exclude spending on residential housing.
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They may also spend more, but this extra consumption would not be caused by changes in housing wealth.
Housing, though an essential good, is ultimately an item of consumption as opposed to an economic stimulant.
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As a result, consumption should take less of a knock from the downturn in the housing market.
Personal consumption grew a puny 1.3% in Q2, and housing construction, as you might have guessed, sank 7.5%.
What Russians don't seem to be shelling out for is shelter and power--the combination of housing, water, electricity, gas and other fuels merits just 9% of Russians' overall consumption--thanks in part to lingering Soviet-era subsidies.
Owing to the basic truth that we produce in order to consume, and that consumption of shelter is a given, the best path for the government to take in order to save housing would be to de-emphasize its ownership, or at the very least make it equal in the eyes of the law with regard to other investments.
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