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To: Real Man who wrote (395378)	10/6/2009 1:12:00 PM
From: Trumptown	1 Recommendation Read Replies (1) \| Respond to of 436258

Trouble in paradise... Back to Schiff: <<Question: Your Washington Post op-ed last year was a "don't give up on capitalism yet" call. But if the Treasury and the Fed and even the White House hadn't done what they did, wouldn't we have been facing deflation, and isn't that a lot scarier? Answer: The prices that would've come down would've been real estate prices, stock prices. We wouldn't have had a big drop in food prices and clothing prices and health-care costs. So when I'm talking about a deflation, we're talking about the deflation of an asset bubble. Real estate prices are much too high still. The government is still trying to keep them from falling. Interest rates are in the zero range right now in order to artificially levitate asset prices, but this is causing real problems underneath the economy. Interest rates can't be zero. That's not right. But the problem is that to have interest rates at the level that's appropriate would bring down housing prices, which would bankrupt a lot of financial institutions that have real estate as collateral. But we have to let that happen. We can't try to preserve artificial prices in a market economy.>>