Global Warming Examiner

How Ivory Tower Economists Created the Housing Bubble

The Fed is printing money and the government is going to start pumping large amounts of cash into the economy in May. This and low interest rates will cause an expansion of credit and inflate our economy. Prices for all fixed assets (like houses) will rise and bail out homeowners and the banks.

The question is: Who will the losers be? The simple answer is all the people that own debt like money market funds, bonds, annuities, and people on fixed incomes like retirees. BTW - this includes all of the foreign holders of US debt, who have been keeping their currencies artificially low to promote exports to us. They also hold a lot of the paper backed by mortgages as this was a way they could recirculate their dollars and earn returns higher than the low US government rates.