If your minions are under water you want them to go slightly above to keep churning for you.
In the mean time you inflate until they feel "responsible" to pay.
In the mean time you inflate until they feel "responsible" to pay.
Quote: (05-18-2013 01:24 PM)Dexter Morgan Wrote:
Quote: (05-18-2013 11:30 AM)WestCoast Wrote:
Hahaha at all the guys talking about real estate bubbles again, that means they don't understand what the govt is doing.
LOL. Please explain how QE3 (or is it 3,000; I've lost count) is NOT potentially contributing to an asset bubble. I say potentially, because the macro-economic environment is a dynamic one and there are multiple factors. But generally speaking, inflating the money supply (or more accurately, the supply of credit) while simultaneously keeping the short end of the curve low forces people to seek yield elsewhere, and that usually results in inflated asset prices. As it did with housing in the early part of the century. I.e, we've seen this movie before! LOTS of people made the case that housing couldn't be over-inflated then, but anyone who could do a simple mean-variance analysis (and who knows the difference btwn a mean-reverting market and one that isn't) could have predicted what happened.
Now, I don't think asset values are anywhere near as inflated as they were in say 2006....we're more at 2002 levels. But "hahaha" and "doesn't understand what the government is doing"? Why don't you help us "understand" what the government is doing, and how it differs from what led to the real estate crash and the credit crash of the last decade. Because it looks like a similar expansion of the supply of credit to me! And every time I've seen an expansion of credit, I've seen a subsequent unwind of credit. As this is the largest expansion of the money supply in U.S. history (the Fed wasn't even allowed to buy the sort of assets it now buys until a few years ago), i'd like to know why a bubble in real estate couldn't happen again.