America?s Real Estate Burden Ensures Inflation

The Obama administration and the US Congress have together made inflation the real monetary policy of the United States. While pundits and talking heads focus on the bailouts and loan packages, they're missing the bigger picture. It isn't what the US government outright purchased (stock, debt, and real estate paper), but it's what the US government is guaranteeing that will make all the difference. Exposure to Real Estate The US Government, the Federal Reserve, and ultimately the citizens of the United States have more exposure to real estate than they could have ever imagined. The US government owns huge positions in several large banks, as well as individual debt obligations from others. However, dwarfing all of these real holdings is its massive exposure to real estate through Fannie Mae and Freddie Mac. Calculating the Risk Though politicians and pundits have labeled the total US exposure to the mortgage/lending business at the cost of TARP, which is r...