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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: saveslivesbyday who wrote (287959)10/31/2010 6:44:55 AM
From: saveslivesbydayRead Replies (2) of 306849
 
The sound bites coming from Washington suggest that there is still a debate as to whether Reaganomics has worked.

This bodes poorly for a constructive dialogue, as the underlying assumptions of each side are so far apart that
any discussion of policy action cannot get past theses biases

Taking the 4 elements,

1. Reduce government spending,
2. Reduce income and capital gains marginal tax rates,
3. Reduce government regulation,
4. Control the money supply to reduce inflation.

It seems to me that 1 and 2 were effective, but 3 and 4 were misguided forces that ultimately led to
financial deregulation and too much power/trust in the Fed to steer the economy in the right direction.

The Residential Real Estate Bubble/Collapse was just the "icing" on the cake which was the
culmination of a massive debt bubble fueled by deregulation and artificially low interest rates,
along with decoupling the money supply from the gold standard for good in 1971, despite 2000 years
of effectiveness en.wikipedia.org

Financial markets left unregulated are like a jungle - greed and corruption will unfortunately prevail
unless the system is regulated. And the concept of regulating themselves? Ha ha! look where we are now.

So the most recent "experiment" is really only 30-40 years old, and has led to a situation where
only 5% of the world's "wealth" is based on true hard assets, the other 95% is based on credit/debt,

Simply put, our current financial system is an unsustainable credit bubble based on a Ponzi scheme
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