While we missed the articles below at the time of their release, they remain very enlightening.

skynews - Tuesday March 20, 2007

Bank Of England Takes Property Blame - The group that decides the interest rate deliberately fuelled a consumer boom to boost house prices and personal debt so that “UK Plc” could avoid recession. Former governor Edward George said the Monetary Policy Committee “did not have much of a choice” in the matter… Lord George - who headed the Bank for a decade until June 2003 - revealed that he knew the approach was not sustainable as he gave evidence to a committee of MPs.

The terrorist attacks on the US in September 2001 caused a stock market crash in the US, and a sharp fall in the global markets. “We only had two alternative ways of sustaining demand and keeping the economy moving forward: One was public spending and the other was consumption.

It wouldn’t be too far fetched to imagine that this could have been the answer of The Federal Reserve if it were asked the same question: there was no other choice after the terrorist attacks and the dotcom crash.

A serious question: are we better off now? Of course not! There is no way to escape a credit bubble. It must be paid off or … defaulted. 

For the record: 

(BBC: 9/3/2003) Capital Economics argues that central banks in both the US and UK have fuelled the housing bubble by keeping interest rates deliberately low, and house prices are now at “dangerously high levels.”