This is a fascinating video that clearly points out some of the myths surrounding the housing bubble in the USA, describing the role that Federal Reserve policy played in creating the bubble, they created a set of incentives which were badly aligned with long term aims. We have long felt that the role of monetary policy and regulation have been central to the problems in both the US and Europe, the full video of the conference is below.
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The Celtic Tiger and Capitalism are coming in for a lot of stick lately. Even from so called experts and professionals. Yet the Celtic Tiger was killed off around 2001/2002 when we joined the Euro, losing control of our currency and interest rates and changing our economy from export/service model to a consumerist one. Then we had Bertie and Co jumping into bed with unions, inventing quangos as they went along and expanding government and public spending. Finally we had all the rent and mortgage supplements and reliefs, tax incentives and tax cuts for developers, land rezoned for a population twice the size of what it was/is. The politicians well and truly have suckered this country and it’s sovereigns.