Quote:
Originally Posted by Trump
It isn't about currency and forex transactions. Readily available, cheap (on the surface) bank issued credit is what has made it possible for house prices to rise exponentially. It has made it possible for anyone to buy into the market, regardless of their ability to afford the repayments now and into the future.
If the local currency was only issued by the treasury, it wouldn't be possible for irresponsible lending to occur and it would severely curtail speculative "investing" simply because the money wouldn't be there for it.
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If that's the case why isn't the US going through a housing boom? After all they have been at zero interest rates for a long period and actively pushing as much credit as they can into their economy (to prop it up).
I do agree credit seems too readily available but banks are really engaged in a form of leveraging the same as they always have. I'm not sure that the leverage formula they use has changed in recent times are they not limited by RBA in terms of their exposure to available cash?