LKSteve

Should We Force a Housing Bottom?

The housing bubble is not just an American problem, although the mania of the last few years started in the U.S. The problem has spread globally. Easy money pumped up the bubble & millions of people piled in. Those in early made a bundle as values ballooned. The suckers, the last ones in had the door slammed on them & are now up the creek without a paddle. The financial system is the culprit. Government bailouts & sovereign-fund liquidity injections only delay the day of reckoning & pump up inflation. My suggestion: Let the banks that fuelled this monster sink. This will restore the value of financial prudence. As things stand the global financial system has become blatantly corrupt & self-serving & every time it makes a cock-up it gets a slap on the hand & a bailout. The author’s wry comment about gun-shy politicians is on the money. We may as well wait for the cows to come home as expect them to make unpopular decisions.