“Many people claim the Federal government and Federal Reserve are trying to inflate a new housing bubble to trigger a new ‘wealth effect,’ i.e. people seeing their home equity rising once again will feel encouraged to borrow and blow money like they did in 2001-2008.   But if we look at current income (down) and debt levels (still high), there is little hope for a renewed wealth effect from housing. That leaves us with this conclusion:  The Federal government and Federal Reserve are trying to inflate another housing bubble to save the ‘too big to fail’ banks from a richly deserved day of reckoning.”

http://charleshughsmith.blogspot.com/2013/03/why-government-is-desperately-trying-to.html

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