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Re-inflating the Bubble

2/28/2013

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House prices are re-inflating. We've been looking for a house since moving to the Seattle area two years ago, and are seeing it unfold first-hand. In some neighborhoods, prices are approaching peak bubble numbers seen seven years ago. This boom has been created by record low interest rates rates. And the record low interest rates has been created by the Fed (by printing money and lending it out).

Apparently, the solution to a bubble bursting is to re-inflate the bubble using the exact same methods that you used to create the previous bubble. What could possibly go wrong?
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    Ben Mathew

    Author of Economics: The Remarkable Story of How the Economy Works

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