Those pesky savers
According to a report from the Washington Post and The Columbus Dispatch, the genesis of the housing market bubble was global wealth; not excess meaningless paper, but true wealth.
So the bubble was not caused by the FED, the bubble occurred because "a growing amount of savings, particularly in developing countries, fueled an investment bubble." But wait, wasn't the savings just excess meaningless paper printed by our old friends the FED? Hmmm.
Comments (3)
There were a lot of countries putting their money into American real-estate, but that was only made possible by the huge US Dollars they are holding.
As Peter Schiff mentions in his latest europac commentary:
«The Treasury only has about $75 billion in foreign currency reserves with which to intervene. (...) To put this number in perspective, Poland has $77 billion, Turkey has $78 billion, and Libya has $79 billion. On the other end of the spectrum, China has $1.7 trillion (not counting Honk Kong’s 150 billion) Japan has $1 trillion, Russia has $550 billion, India and Taiwan each have about $300 billion. Singapore, a nation with fewer than 5 million people, has $175 billion. In fact, the United States holds just about 1% of the world’s $7.6 trillion of foreign currency reserves, and our total position amounts to just 2.5% of the total daily volume of foreign exchange trading.»
Published: July 1, 2008 1:50 AM
This is simply another attempt to divert blame for the economic mess the US and the rest of the world is in from the central banks to other nameless and faceless people. In this case the nameless and faceless ones are Speculators and Hedge Fund Managers who without a real mechanism manage to ruin a perfectly good economy.
This is almost as good as the foreign policy side where Iraqis and Iranians are the nameless and faceless ones who cause terrorism and instability around the world and not agressive western countries.
Published: July 1, 2008 7:52 AM
The planet is papered in Fed-issued fiat and
supported by their debt issue.
All other "causes" are a distraction.
Jim has an immutable point.
Published: July 1, 2008 8:38 AM