- A housing crisis that has significantly impaired the savings and equity of most of America's middle class, a crisis caused by the easy money policies of the central bank, the ill conceived ideas of a few in Congress regarding housing, and a quasi-government agency with a lust for power and greed on the part of its management;
So far, the Washington, D.C. elites have relied on traditional Keynesian means of deficit spending or interest rate manipulation to address some of these issues. But those measures simply do not work. Total debt is already too large, and creating more of it doesn't help. And, the Fed is now impotent. As Bill Gross recently observed, lowering interest rates will not make U.S. manufacturing more competitive, doesn't change the dynamics of a retail trade industry impacted by internet shopping, and actually hurts seniors and retirees trying to live off of investment income. Like in Europe, the ultimate end game in the U.S. will be rebalance. The resolution of the above-mentioned issues can still be addressed within the existing political framework in a peaceful, well thought out, and coordinated way. But, if the can kickers in Washington, D.C. refuse to tackle those issues, they will be taking the risk that the inevitable rebalancing will occur through a disruptive and/or violent process.