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Edited on Thu Dec-30-10 08:58 AM by sendero
... like real estate, companies, etc.
I would take a minor quibble with your OP. A lot of money did "just disappear". When people own houses that are worth $250,000 one year and $200,000 the next, did the $50,000 move from one pocket to another? No, it simply evaporated.
And that evaporation of wealth/value, caused by a bubble in which the value never *REALLY* existed anyway but gazillions of people assumed it did and acted accordingly, is at the root of the current financial crisis.
The government, on behalf of the banks, is DESPARATE to reinflate the housing bubble because it might be the only way to actually save the big banks - - - (don't fall for the "the banks are profitable" nonsense - you can have a net family income that is positive for a month and still have debts you cannot pay, the big banks are there right now and the only way they are getting away with acting like nothing is wrong is their avoidance of mark to market accounting - i.e. they are still claiming worthless paper has worth) - - - but that is not (reinflating the bubble) going to happen because jobs/incomes won't support it AT ALL. Acutally let me revise that, I think TPTB have figured out that reinflating the housing bubble is not in the cards so they are looking for Plan B.
So, to return to your main point, this debacle has served to migrate a lot of money from the middle class to the banksters and other oligarchs, by way of taxpayer funded bailouts (also don't buy the nonsense that the money has been paid back, bullshit) and Zero Interest Rate Policy which is currently ripping off every American with savings that is smart enough to not put it into the rigged stock market.
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