Comment 26458

By A Smith (anonymous) | Posted September 04, 2008 at 01:58:03

Undustrial, I totally agree with you about the fractional reserve banking system our government runs today. Considering that money is supposed to represent real tangible wealth, it should not be allowed to just be created out of thin air.

When money is created by government, and the way in which government accounts for price increases is flawed (Google article on "Owners equivalent rent duped the Fed"), you get bubbles. Over time these bubbles get worked through the system, but government involvement makes these swings more volatile than would otherwise be.

To your point about new homes being poor quality, I don't doubt this is the case. Anytime you get people chasing after any good in relatively short supply, sellers call the shots. No one forces people to buy a poor quality house, it is simply their own greed that makes them chase the asset bubble bonanza.

The reason GTA area farms are not as valuable as home building is because food can be imported as required. This is a good thing, because anytime you decrease land available for building homes, you create a shortage, which drives up prices so only the rich can afford their own dwelling.

That is the genius behind McGuinty's GreenBelt law, it has created an artificial shortage of land that has made it even harder for the poor to own their own house. That's why it so funny to here him talk about helping the poor, when in fact it is his own handiwork that is screwing them over in the first place. Awesome.

I love government.

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