This Bubble Proves The Fed Must Be Eliminated
USATODAY.com reports this morning that new home sales were way up in February. As I discussed yesterday it is the nature of financial bubbles to balloon upwards just as the prices could not seem to go higher. Thats what makes them bubbles.
The troubling thing is that the longer this goes on the more painful the retraction will be. Please see the Japanese situation posted about yesterday. This mania could be so big it causes a major financial sea change. Perhaps the US dollar will finally be done in.
And if I am worried about the bust I am angry at the government and the central bank. As Jim Cramer said yesterday, why doesn't Greenspan just require banks to have a full 20% downpayment for home loans? If there is much economic pain in store for the markets, let us not forget who created this bubble. Maybe the sea change will include the elimination of the Federal Reserve. We can hope.