Monday, August 20, 2007

They Figured That Out Now?

Fed vice chairman Donald Kohn has finally figured out that rising house prices will increase debt levels and suppress savings. The rest of us figured that out years or decades, but better late than never, I guess.

Now on to the next step. What was responsible for the previous rise in housing prices that created the problems of high debt and low savings responsible for the current economic problems in the U.S.? So that we won't have to wait another few years before Mr. bright Fed official figures that out, I'll give him a helping hand and spell it out right now: FED POLICY, or to be more precise, the policy from Federal Reserve of artificially suppressing interest rates.


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