Re: Money Supply, Credit Supply

From: Mark Monson (m_monson_at_ztech.com)
Date: 06/27/04 

Date: Sat, 26 Jun 2004 21:24:04 -0400

"Michael Vilkin" <mikevilkin@mail.com> wrote in message
news:e658a41d.0406231923.592aa5dc@posting.google.com...

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>
> Here I have the same question.
> Suppose, all banks in Southern California are capital-challenged.
> It means that they can not expand lending to build new housing.
>
> I believe a special entity should be created which could borrow
> capital long-term directly from the Fed and make loans to build new
> cities and new communities.

The housing problem is caused not by the high price of houses but the high price of
land. Cheaper credit causes land prices to further increase because borrowers can
afford to buy more at the same monthly payment. Land value taxation (LVT) is the
only thing proven to both keep land prices down and put idle plots on the market.

MM

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