The Fed has announced that more stimulus in the guise of buying up mortgage securities is necessary.
“If house prices are rising, people may be more willing to buy homes, because they think that they’ll, you know, make a better return on that purchase.” said Fed Chairman Ben Bernanke in a news conference Thursday. “One of the main concerns firms have is that there’s not enough demand.”
From one of our blog readers: “This same kind of thinking in 2002 got us in so much trouble today.”
Deja Vu Here we go again