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Strategies & Market Trends : The Residential Real Estate Post-Crash Index-Moderated -- Ignore unavailable to you. Want to Upgrade?

To: bustersmith who wrote (26806)	6/24/2011 11:37:28 AM
From: tejek	Respond to of 119360

The larger economic lesson here concerns the sources of long-term growth and the limits of monetary policy. Easy money can help in a crisis, and it can raise asset prices for a while. But it cannot create a durable recovery, and to the extent it leads to bubbles and higher prices it undermines future growth and erodes middle-class incomes. Economic modeling is still more an art than a science. Just as China is trying to pop its property bubble and to lower its inflation rate by reducing bank landing and raising interest rates, Bernanke was trying to goose the US economy with lots of liquidity. Now that the recovery is in place the US has to transition to a place where long term growth is possible. That is made particularly hard by the political gridlock that has gripped DC.