How Money Caused the Housing Bubble and Other Troubles

Tags: Interventionism, Big Government, Money and Banks

10/09/2014 Mark Thornton

The Federal Reserve manipulates interest rates -bringing rates so artificially low that borrowing money is at greatly reduced cost. Housing developers saw they could build everywhere. That’s the bubble. This wealth effect fools people. They live beyond their means. It is not sustainable. The costs rise. The number of competitors rise. Your customers fall. The bust is the market correction to each economic crisis.

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