nice links~ always helpful to pay attention to what the CSIS is hanging out for circulation..

LSS:

on p.11/26 –his box: Government procures funds at low rates due to lack of other borrowers

on p. 21/26 –under risks: Weaker U$D/ loss of Petro$-status/ U$D collapse

if every ‘Western’ Nation is attempting the same scheme, who’s buying all of the newly created ‘debt’?

who’ll be buying ‘ours’?

who’ll ‘Rollover’?

also: his use of ’29-’54 I-rates comparo, is fatuous.. USA’29 and Japan’89 had more in common, Macroeconomically, than Japan’89 and USA’008..by a long shot..

and, fromp.17/26 Ex.16

seems like one could make the case that Japan’s ‘private-sector’ has been in Gov’t receivership–wonder how that’d play at the WTO?

in Sum, his whole POV is predicated on the continuing existance, and belief therein, of Fictional units of account–popularized by our favorite Poli-Sci-Fi novelist, JMK..

as an aside, I thought it funny that he’s, still, referring to this interlude as ‘Subprime crisis’, as opposed to ‘ProCrime’, but, I’ll hazard, some transparencies won’t be seen..

This is from a lecture by Richard Koo (chief economist of Nomura Research Institute) discussing the lessons that can be learned by Japan’s lost decade. Of course, you can take what he says with a grain of salt. It may be a good prediction of what to expect in US fiscal policy. The lecture and slides can be found here:
http://www.csis.org/component/option,com_csis_events/task,view/id,1828/

PS – I have become an avid reader of this blog due in part to the many excellent insights and perspectives of the comments. Thanks, everyone!

I actually hope you are right. I think affordable housing would be a great result.

Of course I have to defend myself against the possibility of Fed success in stabilizing the upper class catastrophe and runing the lives of the populace by debasing the currency and causing food and fuel inflation.

That cannot happen – the money they are printing is not going to people who will buy houses. It is going to defend an economic upper class against catastrophic loss caused by their disastrous investment choices. There is no current ‘trickle down’ mechanism… and may have never been one. The government printing has had no effect whatsoever on the general economy; in spite of dropping rates and invented money every measured sector has declined for about a year.

Don’t forget to read my critique of your critique.

… Housing still has a way to go before it is truly affordable again. This isn’t even taking into account all the wealth that was created over this time period was funneled somehow back into the economy. That effect is now gone.

reply:
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No argument that housing is high priced. If incomes continue to fall in the Obama terms, such as they did during the Republican era, then bad times are a comin’. I think Obama will try to reverse the dumbing down of America and the mindless exporting of jobs. I think he will again try to establish a comparative advantage in what the USA has to offer and let the foreigners do whatever they do best.

Credit and garbage credit based financial products will probably cease to be our largest export. Whiners will, of course, decry the fact they have to do more than pass hot potato credit paper around to earn high incomes. Some might even have to go back to school and study something useful … then actually do it. (Although nobody will whine as loudly as naked shorts taken off the crack)

So incomes will probably rise because the value of what the American worker will do will be higher. Thus, homes will become more affordable. Low interest rates will also goose up the price of homes since many people will buy as much as they can afford to pay for monthly. You may not like that but if you get an education, apply yourself, and stay off the Ripple you too may afford to move out of your doublewide.

Take off your rose colored glasses for a second and look at your own data the other way. It shows that indeed, prices may still have a long way to fall. Income didn’t double between 2000 and 2008, so why should have home prices?

What we did get over that time period is a tremendous amount of supply growth and lots of people bought at the top, and lots of people did use their home value as an ATM. You may not have, and your friends may not have, but lots of people did. Housing still has a way to go before it is truly affordable again. This isn’t even taking into account all the wealth that was created over this time period was funneled somehow back into the economy. That effect is now gone.

So yes, to me, that is sort of scary.

But hey, maybe it was the naked shorts that took down housing too?

Check out Barry’s new Digital Media entry…my updated Shiller Chart appears.

addendum:
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Don’t forget to read my critique of this very flawed graph.

Anyway, i came late to the party and may have misunderstood some of the discussion points.