Peter Schiff

Now they may just default on their mortgage.

And now in addition to sitting on all these underwater mortgages, banks are going to start to lose money on defaulted mortgages.

The buyer or the seller.

Well,

Houses are unaffordable.

People cannot afford to buy them.

So the solution is lower prices.

But obviously, if you already own a house and that's your main asset, the last thing you want is lower home prices.

Exactly.

And so that is the problem.

But the Fed created that problem by blowing up this bubble in the first place.

If we never had the artificially low interest rates, and of course, the other problem was the government guaranteeing the mortgages.

which enabled people to pay more for homes than they otherwise could have paid.

Because they were afraid to let rates go up because of all the debt that we had.

They knew that if they let rates go up, it was going to be a problem.

So they kicked a can down the road and they kept them low.

But the point is that all of the money in housing, it doesn't make housing more affordable.

It actually makes housing more expensive.

Whenever the government comes in to try to help you pay for something,

they actually make it more expensive.