- Sep 26, 2000
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If the housing market hadn't collapsed in a sea of bad loans, then much of he current crisis would have been averted.
So why did the market collapse?
No inflation.
While those with adjustable rate mortgages would have suffered, those with fixed rate mortgages would have done fine.
And the arm mortgages could have been converted to fixed rate, those people given some help, and the crisis is over.
Why has there been so little inflation? When a country spends and spends and borrows and borrows there should have been massive inflation. Prices should have been going up, along with salaries.
The reason there is no inflation?
China.
Since China does not trade its capital on the world market (hence the term capitalism) there has been this artificially cheap place to move your business and keep your prices from increasing.
So, and I know this may shock those who think I am not a "free trader" the problem is the LACK of free trade with China.
If China had allowed its currency to be free traded, it would have done 2 things:
1) given us enough inflation to keep homeowners in their homes.
2) slowed and possibly even reversed some of the flight of businesses around the world to China.
So why did the market collapse?
No inflation.
While those with adjustable rate mortgages would have suffered, those with fixed rate mortgages would have done fine.
And the arm mortgages could have been converted to fixed rate, those people given some help, and the crisis is over.
Why has there been so little inflation? When a country spends and spends and borrows and borrows there should have been massive inflation. Prices should have been going up, along with salaries.
The reason there is no inflation?
China.
Since China does not trade its capital on the world market (hence the term capitalism) there has been this artificially cheap place to move your business and keep your prices from increasing.
So, and I know this may shock those who think I am not a "free trader" the problem is the LACK of free trade with China.
If China had allowed its currency to be free traded, it would have done 2 things:
1) given us enough inflation to keep homeowners in their homes.
2) slowed and possibly even reversed some of the flight of businesses around the world to China.