I just had a thought that could be fuel for all the conspiracy mongers out there.

I agree that Greenspan is not dumb AND I agree that he gave out terrible advice regarding the financing in RE. But what if it wasn’t terrible advice after all? What if Greeny KNOWS beforehand that the US will just inflate their debt problems away?

If you know that your money was about to be worth half of its current value, you would want to be completely leveraged 100% with OTHER PEOPLE’S money (i.e. China?). Then after the inflation happens, you only have to pay back the (greatly reduced) loans with the many more dollars you will be getting.