A wonderfully informative piece by Paul Kasriel explains that Greenspan has to keep rates low in order to keep the price of real estate pumped up. Faced with unprecedented declines in household net worth, the value of real estate becomes ever more important for political reasons. But the trendline on bankruptcy and foreclosure rates does not look promising. In short, Kasriel documents, Greenspan will likely lose this battle. Most revealing among all his charts:
