The Fed pumped up money supply and liquidity in order to create a massive housing bubble, which was used to drive consumer spending so as to placate and confuse an American population who had lost their manufacturing base and world competitive position.
Here's the Bank of England last week though, in a stunning admission on their housing bubble cause and effect. What they didn't touch on (yet) is that all asset bubbles deflate, all financial manias die, and all periods of low risk premiums reverse:
"Investors are likely to take advantage of this ample liquidity and the associated easy credit to purchase other assets, driving risk premiums down and asset prices up," the BoE told parliament’s Treasury Committee on Feb 20th."
More Foreign Goods Headed for Wal-Mart
What kind of a country are we when we no longer make anything, we no longer produce, we no longer save, we no longer have the ability to provide for ourselves, and we no longer have the capacity to pay back our debts? All we do is sell real estate back and forth to ourselves at horribly inflated prices.
"Nothing to see here. Time to move on."