0% interest, 600K “free money” are all fun to talk of; but the way the cookie will crumble, in my opinion, is through a robust and sustained inflation (helped on with robust and sustained devaluation of $). By eventually creating a perception that US $ has doubtful value, people will be forced to go back and buy up real estate to lock in whatever wealth they may have. This is Bernanke’s monetary philosophy and he has been truthful to his belief so far. His mantra – “Full steam ahead, inflation be damned”.
BTW, if anyone thinks I am cynical etc., I completely agree with BB on this! The most rational solution to our national problem now is a dose of robust and sustained inflation so that our debts, public and private, become lower in real value. This will also make our products and factors of production internationally competitive. Just ask yourself – how many of you will buy a Honda or Toyota when it costs $50K, $100K …. How many will buy a BMW or MB when it costs 100K, 200K ….
