An even bigger bailout is coming
Today the new Treasury Secretary announced a new $2 trillion plan which I wrote about here.
The details are few, and it is still very sketchy, but I doubt it will curb the falling prices here in California. Don’t they get that what we need is more jobs?
What is more scary is that this is in addition to the $838 billion stimulus bill making its rounds through the congress right now. In the past I would have told people to call their congress people, but it seems like congress has stopped listening long ago. Now that the entire congress is controlled by Spendemocrats there is no check and balance for the executive branch anymore. Where will this nation fall?
Anyway, I will continue to post San Mateo Home Sellers in Trouble for your entertainment.
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More jobs would be nice, but really what we need is inflation.
Jobs on their own will allow people to make their current mortgage payments, but now that the cat is out of the bag and people realize that their homes are overpriced there is incentive to walk away- job or not.
Inflation will drive up the nominal value of property while leaving debt levels in place, with the net effect being increased equity. Increased equity will permit refinancing, thus preventing future rounds of foreclosures.
Just watch. That 2-3 trillion of invented money will hit the mainstream in about 6 months. Then talk of deflation will be but a distant memory!