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Subject: Interesting Article - House Tax Credit

Written By: LyricBoy on 11/20/11 at 1:15 pm


Came across this article in the local paper today.  What it outlines is not completely to be unexpected when the Government starts fiddling with personal economic decisions and market trends.  Newton's law applies... "For every action there is an equal and opposite reaction..."  :-\\

Subject: Re: Interesting Article - House Tax Credit

Written By: Foo Bar on 11/20/11 at 8:51 pm

Much as we differ on some issues, you'll get no argument from me here.  This is exactly what was going to happen.  It's exactly what was supposed to happen: a temporary bump upwards in home prices to take into account the "free" subsidy, and that the temporary bump upwards in home prices was supposed to nudge enough of the bad loans into solvency to save the banks and enable them to pay off their bondholders.

If the economy had responded to the artificial stimulus, it might have even worked.  But the rug got pulled out from it for reasons discussed in other threads, and now we're basically Europe with a time delay.  After 2009-2010's rounds of QE1 and QE2, the next move appears to be another round of deflation to wash out the remaining debtors and investors, followed by another round of inflation to wash out any savers.

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