In 2007 the US housing sector and all the exotic securities than hang off dodgy valuations, falling prices and going broke homeowners smothered the US financial system and economy, producing the 2008 crash and crunch.

In 2011 the US housing sector remains broken and is in danger of smothering, or at best severely retarding America's stuttering economic recovery.

In its post meeting statement this week, the Fed was generally more upbeat about the state and direction of the US economy than it has been for several years, with the notable exception of housing, which it said was still depressed.

A day later a shock fall in building permits to a new all time low, and a bigger than expected fall in actual starts (both for February) confirmed the Fed's reading and got analysts wondering if the housing slump could again break the economy.

When you look at the rising impact of petrol and oil prices (which is boosting headline inflation, but not yet core prices) and the