In Part 3 we demonstrated that the essence of Greenspan's policy was to make up for the loss of middle class income and jobs caused by domestic inflation and off-shoring by encouraging households to hock their castles with more and more debt. This was otherwise known as cash-out "refi" or MEW (mortgage equity withdrawal).
The Greenspan Chronicles, Part 4: Why Capitalist Prosperity It Dying
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David Stockman’s Contra Corner isn’t your typical financial tipsheet. Instead it’s an ongoing dialogue about what’s really happening in the markets… the economy… and governments… so you can understand the world around you and make better decisions for yourself.
David believes the world -- certainly the United States -- is at a great inflection point in human history. The massive credit inflation of the last three decades has reached its apogee and is now going to splatter spectacularly.
This will have lasting ramifications on how governments tax and regulate you… the type of work you and your family members will have available and what you get paid… the value of your nest egg… and all other areas comprising your quality of life.