Many mortgages have not just been modified once, but twice, and sometimes more. Loan servicers are holding higher-end mortgages rather than foreclosing a decade after the crash. Thus, there is plenty of shadow inventory lurking, waiting for the next crash.
If the small sample size of monetary history is any guide, the combination of asset market crashes and high goods inflation empowers sound money forces in the political arena. At the moment, neither of those factors are in play.
After lying dormant for several years in the aftermath of the Great Recession, the subprime market has returned with a vengeance. Subprime has become prevalent in every facet of the credit industry, and we should be terrified.
Last month's election gave Boris Johnson a strong majority in Parliament, but two economic wildcards could trip his new government up.
Sweden launched its failed negative rate plan almost five years ago and now reverses it due to the financial risks that are created.
It's possible for investors and entrepreneurs to make a lot of money in markets without understanding the economic theory behind their actions.
Dr. Bob Murphy introduces an upcoming e-book on the mechanics of the Fed.
"I am not saying that fiat money, once established on the ruins of gold, cannot then continue indefinitely on its own. Unfortunately … if fiat money could not continue indefinitely, I would not have to come here to plead for its abolition."
As long as there is still room for pushing the market interest rate down even further, the chances are reasonably good that the boom continues, and that the bust will be postponed into the future.
When operating in an easy money regime, finding investments capable of providing reasonable returns becomes difficult to near impossible. Low risk vehicles are bid down to near-zero returns, pushing investors into ever riskier vehicles to generate enough return to cover objectives.
