I agree.
I suspect that one or several of the following things is going to happen in the next several years.
A: Housing (or more generally, debt) focused inflation (increases in aggregate nominal effective demand) such that it undermines savers and put borrowers on a better footing. Hopefully more of the latter than the former.
B: Statutory relief from debt. In other words, a rollback of the regressive BK laws of the early 2000’s and probably some new laws that dramatically limit lender recourse on a national scale.
C: Some government-originated debt purchasing entity with a broader mandate and (at least initially) tighter controls on risk.
Barring some combination of these, I see this credit crunch continuing half as long as the economic expansion (which has been continuing since the 40’s).
