Review & Outlook: Bailout of First Resort - WSJ.com
Let's see?
The housing bubble was fine and dandy as long as prices kept going up even though incomes didn't. Eventually it burst to the downside - and, we're still in a correction phase.
Likewise, the government debt bubble all seems fine and dandy as long as interest rates stay low. But, no one has an incentive to save with negative real interest rates (the equivalent of the incomes to support house prices). So, as long as the printing presses don't really ignite inflation, all is halcyon.
But, when the sovereign debt bubble bursts - as is almost happening (and really happening in some places) - the choice will be the housing bubble equivalent - of course opposite direction - i.e. much higher interest rates and/or a flood of debt-devaluing-money-printing the ensuing inflation.
Tick-tock, tick-tock...
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