The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Giordano Bruno who wrote (298798)	12/18/2010 1:13:41 PM
From: John McCarthy	Read Replies (2) of 306849

This Unemployment Situation Worsens as Seasonal Jobs Disappear just about says it all ..... while ... In today's Barrons [pg 52] Jan Hatzius - chief econonomist for Goldman Sachs explains why QE2 should go for - 1 or 2 trillion - IOW - whatever it takes ..... AND it is NOT inflationary due to * under utilization * high unemployment * and all the rest he goes on .... to get back to a normal 5.5% unemployment rate takes an average 2% of GDP - above norm 2.5% - for in the simple case at least 21/2 years and probably 5 years. And thats what QE2 buys us ..... What confounds me is simple: - Mish has published charts showing that at -0- SHORT TERM interest rates - the velocity of money is ALWAYS ZERO ... so no umph is generated when short term rates = 0 Ben has to know this .... - (We the people) are trying (aggregate) to reduce debt and not spend ..... so who can the banks target to give credit to - Not in any equation is the reduction of bank reserves due to the enevitable mega-rampage of foreclosures out there in the future somewhere as well as the concomitant future reduction of housing prices and increase in mortgages under-water. regards John

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