Friday, January 23, 2009

Peter Schiff: Let the Housing Market Crash (US News)

Luke Mullins from US News and World Report interviewed the great Peter Schiff:

Peter SchiffEarlier this week, I chatted with Peter Schiff, the president of Euro Pacific Capital. Schiff, a notorious bear, argued that the government's response to the housing crisis has only made matters worse and that the best way to help the market would be to let home prices fall further. Some excerpts from the interview:

What's your take of the Fed's moves to engineer lower mortgage rates?
It is a bad thing. They are trying to maintain high home prices by keeping interest rates low. That's how they want to create more affordable housing. What's a much more efficient way [to create more affordable housing] is to let home prices fall so that houses become more affordable because they are cheaper. And so people don't have to borrow as much money to buy a house. These low interest rates are only temporary. They can't stay down here.

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