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There may be another link between QE and housing: I suspect a large motivator of QE was to avoid deflation, which could have caused a large number of foreclosur
by johnrob 11y ago
There may be another link between QE and housing: I suspect a large motivator of QE was to avoid deflation, which could have caused a large number of foreclosures. So the notion of QE propping up home prices might have been the intended effect.
Edit: this also seems in accord with your notion of housing as a currency. If dollar inflation is tied to home prices, then to allow prices to drop is to deflate the dollar - something our government won't allow. So home prices have to be protected as a form of anti-deflationary measures.
- treebeard901 11y agoI agree that one intended effect of QE was to reinflate the housing market. One problem was homes being way overvalued. After prices somewhat balanced out, the problem was a lack of credit available for most people wanting to buy into the market. So many changes have happened over the past few years to the U.S. and global economies that I seriously question the understanding behind modern inflation and deflation. We have been fighting a deflationary spiral since 2008 and it seems like we have almost run out of ammo.