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Unformatted text preview: very real risk, and Fed Chairman Bernanke seems
to be willing to do whatever it takes to avoid a
deflationary spiral. Furthermore, real estate values
are the key asset securing bank loans. Should real
estate values continue to decline, then bank capital
is at risk. Additionally, declining real estate values
inhibit the mobility of the labor force. However, it
is difficult to target only one asset with monetary
policy. Consequently, it can be argued that the
continued on page 56
55 2012 Colorado Business Economic Outlook Financial Activities
continued from page 55 unintended consequence of the nontraditional
easy monetary policy is to inflate all asset values.
This calls into question what the real value of the
stock market and commodity prices would be, in
addition to treasury securities and real estate, if it
were not for these nontraditional actions.
However, residential home prices continue to
decline. From a regulatory stand point, the Federal Housing Finance Agency announced a series
of changes to the Home A...
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This note was uploaded on 02/11/2013 for the course MGMT 231 taught by Professor Yu during the Spring '13 term at Bauder.
- Spring '13
- The Lottery