"HOUSE PRICE" not "Banking" Crisis

Across the world this weekend national leaders and heads of international organisations are meeting to come up with new sticking plaster cures for a banking crisis they state has caused a stock market collapse. Unless they address the real crisis their cures are doomed to failure - for this is a financial crisis caused by the house price bubble. It started in the US with its roots in the Democratic Party inspired reckless lend by Fannie Mae, itself a creation of the supposed cure for the Great Depression. The publicly underwritten mortgage debts together with those of its sister organisation Freddie Mac were never carried as public debt. These organisations lent to low income people incapable of responsible mortgage and lifestyle management. Similar crazed lending policies were adopted in the UK under the New Labour Government and Chancellorship of Gordon Brown. Unless the artificially high house prices in these two countries are addressed the banks cannot be the source of salvation. Other countries may well have similar but not necessarily identical problems. If taxpayers money is to be liberally thrown away, aiming it to reduce house prices in the US and UK would certainly make more sense.