$6 Trillion in bad investments
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Between 2001 and 2006 the Federal Reserve
greatly expanded the US money supply.
Most of the money went into
residential and commercial real estate,
triggering the biggest boom-bust cycle in history.
The fact is that without the Federal Reserve’s
expansionary monetary policy after 2001,
we would not have had a housing bubble
to the same extent. The Federal Reserve’s policies
basically encouraged sub-prime lending.
$6 trillion dollars that flowed into housing in the boom
is still circulating in regional and local banks
as the graph above illustrates.
The bust, our current economy, is the process of
getting rid of the overproduction in housing.
The mistake by the Fed and this government
was to transfer the private debt created by the bust
to public debt with borrowed money.
When will the money flow into employment?
It is the interest of the working man with which we must be concerned,
when the American people work, save and invest, America prospers!
… knowledge is the only true safeguard of liberty
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