Continuing with my Saturday Sillies and Stupids. . . .
And yes, I’m well aware of the argument that an endpoint housing deflation can permanently equilibrate the market at far lower levels. Guess what? That’s a pretty accurate description of a low-leverage, expensive-capital world. And how is that any different from the real private sector economy we have today? To suppose that policymakers can counteract this is to believe you can stop water flowing downhill: in reality, you can only slow it down, and you’ll get awful wet in the process.