If you don't do what you wanna do, you're just bullshitting yourself.

- Carroll Shelby

Monetizing the Bubble

The housing bubble was excessively great going up, so there should be some pain when going down. The government does not like pain, no matter what the cost, so a policy of cheap money is being proffered by U.S. Federal Reserve Chairman Ben Bernanke. Cheap money will lead to inflation, which will slow the fall of housing prices because it causes inflation, decreasing the value of the dollar. This is why the dollar continues its decline. Monetization is a tax and we are all about to be taxed significantly without even realizing what the government has done.

Government is doing what they usually do, making matters worse. Instead of this being a housing bubble where those like Countrywide, who made poor loans, or those trying to make a quick buck flipping houses suffer a bit of pain, we are all going to pay significantly and suffer, even if we did not participate in the bubble's excess. The federal government's continued efforts to avoid any pain has the possibility of devastating the U.S. economy.

BTW: If people actually understood much of this they would understand why Ron Paul has gathered a loyal following in his run for president.

posted at 00:41:34 on 01/11/08 by clearpolitics - Category: Economics - [Permalink]

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clearpolitics wrote:

Headline: Consumer Confidence Sinks to Record Low

This is why we are in a recession. Consumers know when they are tapped and they are the engine not only of the US economy but the world economy.

http://biz.yahoo.com/ap/080...
01/11/08 11:12:20

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