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May 30, 2009 at 10:41 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #407749May 30, 2009 at 10:41 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #407991
patientrenter
ParticipantUsing current readings of inflation or deflation as indicators of what will happen in the next 5-10 years is as helpful as using home price trends in 2000-2007 was in judging the long term future of house prices.
May 30, 2009 at 10:41 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #408053ParticipantUsing current readings of inflation or deflation as indicators of what will happen in the next 5-10 years is as helpful as using home price trends in 2000-2007 was in judging the long term future of house prices.
May 30, 2009 at 10:41 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #408201ParticipantUsing current readings of inflation or deflation as indicators of what will happen in the next 5-10 years is as helpful as using home price trends in 2000-2007 was in judging the long term future of house prices.
May 30, 2009 at 9:29 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #407471ParticipantI want to say one word to you. Just one word. Are you listening?
Inflation.
May 30, 2009 at 9:29 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #407714ParticipantI want to say one word to you. Just one word. Are you listening?
Inflation.
May 30, 2009 at 9:29 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #407956ParticipantI want to say one word to you. Just one word. Are you listening?
Inflation.
May 30, 2009 at 9:29 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #408018ParticipantI want to say one word to you. Just one word. Are you listening?
Inflation.
May 30, 2009 at 9:29 AM in reply to: The past doesn’t repeat but it Rhymes: Lessons from Japans Financial Crisis #408167ParticipantI want to say one word to you. Just one word. Are you listening?
Inflation.
ParticipantI love the hypothesizing about what might happen if the govt (through the Fed, or Treasury, or FDIC, or FNMA, or whatever) were to simply supply cheap money for borrowers buying assets at overinflated prices.
We don’t have to hypothesize! Since summer and fall of 2007, virtually all the money used to buy homes in the US has been provided thanks to the US govt. The Federal Home Loan Bank system kicked in quietly right away, FNMA continued to pour in vast amounts of money, and the Treasury and the FDIC and FHA and so on have been the reason for $8 out of every $10 spend on housing in the 1 1/2 years.
Of course, most of these govt institutions arranged for the money to be provided via ludicrously underpriced and overly risky guarantees on the loans. Since most people aren’t smart enough to understand that lending is only “difficult” to the extent that there’s a risk of non-repayment, they don’t get it that the govt is nearly 100% responsible for the risk on these loans, and actually believe that the govt is only involved at the margins. It’s this abysmal ignorance on the part of the general public that led to schemes like the PPIP, where the govt takes on almost all the risk, but uses private money as a shield to conceal its extreme risk-taking.
Sigh, like SDR, I get apoplectic about this stuff sometimes. I will go pour another glass of el vino.
ParticipantI love the hypothesizing about what might happen if the govt (through the Fed, or Treasury, or FDIC, or FNMA, or whatever) were to simply supply cheap money for borrowers buying assets at overinflated prices.
We don’t have to hypothesize! Since summer and fall of 2007, virtually all the money used to buy homes in the US has been provided thanks to the US govt. The Federal Home Loan Bank system kicked in quietly right away, FNMA continued to pour in vast amounts of money, and the Treasury and the FDIC and FHA and so on have been the reason for $8 out of every $10 spend on housing in the 1 1/2 years.
Of course, most of these govt institutions arranged for the money to be provided via ludicrously underpriced and overly risky guarantees on the loans. Since most people aren’t smart enough to understand that lending is only “difficult” to the extent that there’s a risk of non-repayment, they don’t get it that the govt is nearly 100% responsible for the risk on these loans, and actually believe that the govt is only involved at the margins. It’s this abysmal ignorance on the part of the general public that led to schemes like the PPIP, where the govt takes on almost all the risk, but uses private money as a shield to conceal its extreme risk-taking.
Sigh, like SDR, I get apoplectic about this stuff sometimes. I will go pour another glass of el vino.
ParticipantI love the hypothesizing about what might happen if the govt (through the Fed, or Treasury, or FDIC, or FNMA, or whatever) were to simply supply cheap money for borrowers buying assets at overinflated prices.
We don’t have to hypothesize! Since summer and fall of 2007, virtually all the money used to buy homes in the US has been provided thanks to the US govt. The Federal Home Loan Bank system kicked in quietly right away, FNMA continued to pour in vast amounts of money, and the Treasury and the FDIC and FHA and so on have been the reason for $8 out of every $10 spend on housing in the 1 1/2 years.
Of course, most of these govt institutions arranged for the money to be provided via ludicrously underpriced and overly risky guarantees on the loans. Since most people aren’t smart enough to understand that lending is only “difficult” to the extent that there’s a risk of non-repayment, they don’t get it that the govt is nearly 100% responsible for the risk on these loans, and actually believe that the govt is only involved at the margins. It’s this abysmal ignorance on the part of the general public that led to schemes like the PPIP, where the govt takes on almost all the risk, but uses private money as a shield to conceal its extreme risk-taking.
Sigh, like SDR, I get apoplectic about this stuff sometimes. I will go pour another glass of el vino.
ParticipantI love the hypothesizing about what might happen if the govt (through the Fed, or Treasury, or FDIC, or FNMA, or whatever) were to simply supply cheap money for borrowers buying assets at overinflated prices.
We don’t have to hypothesize! Since summer and fall of 2007, virtually all the money used to buy homes in the US has been provided thanks to the US govt. The Federal Home Loan Bank system kicked in quietly right away, FNMA continued to pour in vast amounts of money, and the Treasury and the FDIC and FHA and so on have been the reason for $8 out of every $10 spend on housing in the 1 1/2 years.
Of course, most of these govt institutions arranged for the money to be provided via ludicrously underpriced and overly risky guarantees on the loans. Since most people aren’t smart enough to understand that lending is only “difficult” to the extent that there’s a risk of non-repayment, they don’t get it that the govt is nearly 100% responsible for the risk on these loans, and actually believe that the govt is only involved at the margins. It’s this abysmal ignorance on the part of the general public that led to schemes like the PPIP, where the govt takes on almost all the risk, but uses private money as a shield to conceal its extreme risk-taking.
Sigh, like SDR, I get apoplectic about this stuff sometimes. I will go pour another glass of el vino.
ParticipantI love the hypothesizing about what might happen if the govt (through the Fed, or Treasury, or FDIC, or FNMA, or whatever) were to simply supply cheap money for borrowers buying assets at overinflated prices.
We don’t have to hypothesize! Since summer and fall of 2007, virtually all the money used to buy homes in the US has been provided thanks to the US govt. The Federal Home Loan Bank system kicked in quietly right away, FNMA continued to pour in vast amounts of money, and the Treasury and the FDIC and FHA and so on have been the reason for $8 out of every $10 spend on housing in the 1 1/2 years.
Of course, most of these govt institutions arranged for the money to be provided via ludicrously underpriced and overly risky guarantees on the loans. Since most people aren’t smart enough to understand that lending is only “difficult” to the extent that there’s a risk of non-repayment, they don’t get it that the govt is nearly 100% responsible for the risk on these loans, and actually believe that the govt is only involved at the margins. It’s this abysmal ignorance on the part of the general public that led to schemes like the PPIP, where the govt takes on almost all the risk, but uses private money as a shield to conceal its extreme risk-taking.
Sigh, like SDR, I get apoplectic about this stuff sometimes. I will go pour another glass of el vino.
ParticipantI think it’s pretty obvious that Mr Krugman is very committed to political goals, and will use his mental dexterity and knowledge and reputation to advance those goals.
People on the left side of the political spectrum, like Mr Krugman, tend to like inflation better than deflation. Why? Because it transfers wealth from people who have consumed less than they have produced to those who have consumed more than they have produced, and the latter group tends to be more left of political center than the first group. All politics tends to devolve down to grabbing more for your own group, and this is what Paul’s game is.
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