Watch What They Do; Not What They Say

Prudent Bear-Credit Bubble Bulletin ^ | January 7, 2005 | Doug Noland

[Reaganghost]

Excerpt:

"January 4 – Dow Jones (John Conner):  “The Federal Housing Administration has increased its single-family home mortgage limits… Effective Jan. 1, 2005, FHA will insure single-family home mortgages up to $172,632 in low-cost areas and up to $312,895 in high-cost areas, HUD said. Last year, the FHA loan limits were $160,176 in low-cost areas and $290,319 in high-cost areas.  HUD said the loan limits for two-, three, and four-unit dwellings also increased.  ‘These higher loan limits will help the FHA mortgage insurance program keep pace with the strong housing market while contributing to the Bush Administration’s commitment to create 5.5 million new minority homeowners by the end of the decade,’ said HUD Secretary Alphonso Jackson.”

Click here to read the rest of this excellent article.

[Reaganghost]

Definitely "compassionate", but what we need is less credit, not more. This is anything but conservative, but it does continue the trend in place of attempting to borrow ourselves into prosperity. If we can borrow ourselves into prosperity, the chart below suggests that we should all be close to being rich now.

Are we digging ourselves in deeper or is it the Chinese and Japanese that are lending us the money that are doing the digging? Or Both?