I have no doubt that the blame for the inflated property prices we see today is compliments of Fed Chairman Greenspan's low interest rate policy. Greenspan brought interest rates down to a 46-year low. And the thought-process that consumers developed became "how much can my monthly payment buy," as opposed to "how much does it cost?"

Case in point: According to the National Association of Realtors, the monthly median mortgage payment, including principal and interest, rose to only $793 in 2003 from $789 in 2001. Now, we all know real estate prices rose more rapidly during that time frame, but falling interest rates kept mortgage payments low.

An excellent study by the Wall Street Journal examined rising property taxes. These are local municipal taxes that fund their respective police, fire departments, schools and government offices. The study concluded property taxes are going through the roof.

Increased local government costs and slashed state and federal funding are forcing property taxes to rise. While the average increase from 2001 to 2003 has been only 10%, the increases are much steeper in areas where property values have been increasing.

Property tax increases between 20% and 50% over the past three years are very common. This is the real "hidden" and rising cost of owing a home. Add in rising electricity, water, and natural gas costs, and the total cost of owning a home, excluding the mortgage payment, is rising about 15% per year.

Again, excluding mortgage payments, at this rate the cost of operating a home will double in the next five years. But will the income of consumers double in five years? Of course not.

Today we have another problem: rising interest rates. Just one year from now, I believe we will be able to look at statistics from the National Association of Realtors and see the monthly median mortgage payment, including principal and interest, rising substantially in 2004 over 2003 because of higher interest rate costs.

For products we import from outside the United States, inflation is dead and deflation is the norm. But for home-grown American goods and services, like the services we need to operate a home, inflation is very much alive.