Tag Archives: regulation

How to Safely Deflate the Housing Bubble

[Sent to my one remaining plausible outlet 3 May.]

The main reason for stratospheric housing prices is that the commercial banks are allowed to create too much credit. The failure to understand and remedy this structural defect poses a serious threat to Australia’s economic stability and social cohesion.

Housing prices are an election issue. They are also a prime driver of severe inequality and a serious threat to the stability of the Australian economy. Foreshadowed rises in interest rates threaten to collapse the very high levels of household mortgage debt and bring on a serious recession. The dream of home ownership is disappearing for many. Homelessness is a rapidly increasing problem. Such inequality will further undermine our once-liberal society.

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