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« Agitators | Main | In Baghdad »

Oct 31, 2007

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Dave Ribar

Cheap money is certainly an issue, but the way that the Fed does this is by creating cheap debt. The housing bubble actually reflects a much bigger debt bubble that has built up over the last decade. Savings rates for the last few years have been very close to zero and sometimes negative. Such high and unsustainable levels of debt should lead to interest increases, yet the Fed is doing the opposite.

Jim Capo

Credit is cheaper, but harder to get. The FED is trying to juggle cutting off people/prey who never should have been given credit in the first place, while at the same time bailing out its pals who signed them up for it.

The official chart on our basically non-existant savings rate for the last few years. (Savings rate in late 80's 90's was around 10%)

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