... your son or daughter is now another $100,000 in debt.

Mr Henry Paulson the Treasury Secretary and ex CEO of Goldman Sachs said the following today, and I quote.

"Let me be clear, despite strong economic fundamentals, the housing decline is still unfolding and I view it as the most significant current risk to our economy," Paulson said in a speech delivered at Georgetown University's law school. "The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth." In his most somber assessment of the crisis to date, Paulson said that the housing correction is "not ending as quickly" as it had appeared it would and that "it now looks like it will continue to adversely impact our economy, our capital markets and many homeowners for some time yet."

Alan Greenspan 2 years ago was extolling the virtue of adjustable rate ARM mortgages to anyone who would listen. These ticking time bombs have now inevitably gone off and the big Wall Street firms are getting hurt including Goldman Sachs. Notice that Citigroup wrote off $3 billion last quarter, a lot of money. Wall Street has no interest in the homeowner, they have ridden the boom and they are now trying to minimize fallout from the bust. As Gary North recently commented anybody who honestly believes that Wall Street has the interests of the lower and middle classes at heart is terminally naïve.

Mr Paulson is clearly stating that American house price inflation is now the dominant force of the American economy. This sounds to me as if the only future for the American economy is perpetual house price rises and perpetual debt to fuel it, what a great future.

He goes on to say "We must help as many able homeowners as possible stay in their homes," Paulson said. "Foreclosures are costly and painful for homeowners." But Paulson also stated, "When investors are relieved of the cost of bad decisions, they are more likely to repeat their mistakes. I have no interest in bailing out lenders or property speculators."

In a free market Mr Paulson when you make a mistake, when you get it wrong the market punishes you. The Borrowers SHOULD LOSE THEIR HOUSES and the banks should LOSE MONEY that's the discipline; any bailout simply provides MORAL HAZARD. The biggest speculators of all were Wall Street including Goldman Sachs your old firm Mr Paulson, nobody said anything when the big fat fees were rolling in, now Wall Street is acting like the very best Soviet Ministries and demanding state handouts for the "homeowners" how very touching. By definition if you are going to help the homeowners many of who were acting like speculators you are also by default helping the lenders THE REAL MOTIVATION. Questions should be asked Mr Paulson of Goldman Sachs you were the CEO throughout much of this period, and the other Wall Street banks as to how this situation has developed that now presents a "significant current risk to our economy" .

The greatest Stock market speculator of all time Jesse Livermore stated

"There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!"

"Speculation is a hard and trying business, and a speculator must be on the job all the time or he'll soon have no job to be on."

"The game taught me the game. And it didn't spare the rod while teaching."

What about the young people Mr Paulson? I am a late baby boomer, wonderfully easy for me like all boomers, property was very cheap in my time and good paying jobs with real opportunities were everywhere I COULD EASILY AFFORD A BASIC HUMAN RIGHT A HOME, These were before the days that banks such as Goldman Sachs had come up with all these ingenious devices to ram credit into the market, which has now driven property prices into the stratosphere all in the name of good old fashioned greed and profit.

Not so easy for my two sons who have been trying to save a deposit to afford even the most basic accommodation, as the prices have risen over the last few years at a faster pace than they can save a deposit. Why should they now suffer? The dreaded deflation or FALLING PRICES is only a dread to the bankers who are worried that the value of the collateral they hold will suddenly become lower than the outstanding debt. To Speculators deflation is a dread because it means a margin call! Deflation is no dread to my two sons Mr Paulson, or anyone else who wants a home at a fair and reasonable price.

The market is correcting as it should do. Now Wall Street are desperately trying to stop this natural process. Wall Street are very Laissez Faire during the boom and real socialist during the bust. "Foreclosures are costly and painful for homeowners." AND BANKERS, all you want Mr Paulson is prices not to stagnate or fall to save Wall Street and people who have either made huge windfall profits in housing or should never have bought a house in the first place, and were only able to do so because of all the "creative" financing used by companies such as Goldman Sachs. Anybody taking a mortgage should look at the affordability of the payments and not what the house is worth or is going to be worth. If you do look at this value, or if this value influenced your decision then you are a speculator pure and simple as your speculation is hopefully a rising house price.

I am a believer in real conservative values Small Government, Free Markets, Sound Money, Balanced Budgets, & Freedom Of the Individual. We need some form of standard, whether it is the Gold Standard or any other standard. The alternative is that we allow bankers like Mr Paulson to create as much credit as they like. Which leads to asset bubble after asset bubble, or asset inflation as more credit is produced than available assets to absorb all this credit, so the price inevitably spirals upwards. The process then feeds on itself until we get the inevitable bust, at this point the Bankers try and pass the baby back to the American taxpayers via the Government in yet another Wall Street bailout, they milk the boom but pass on the bust. This crisis is simply the S&L scandal all over again but this time on steroids.

For example the 80's stock market Boom and Bust, the early 90's property boom and bust, the late 90's stock market boom and bust, and now the 00's property boom and bust.

These bubbles destroy real business and real entrepreneurship, and it rewards speculators. It does not happen in markets such as automobiles because as fast as new credit is being produced, cars are also being produced to meet the demand which is largely fuelled by credit. We have an equilibrium of price. Sometimes we see price inflation when a very popular and hyped new model is introduced premiums are often paid, because the demand fuelled by available credit is then greater than the supply.

What the bankers of Wall Street have actually created is a form of Debt Feudalism, you may work hard but you give most of it back by way of tribute to the bank, you simply siphon money from the real economy direct to the bankers it is nothing but USURY with NO CONTROLS. You pay a huge mortgage or Mort = Death Gage= Loan for your vastly overpriced house, which is only so overpriced because of limited housing supply meeting unlimited credit supply. I have a simple solution Mr Paulson run this past your Wall Street Buddies.

Mortgages only provided on 3 times SINGLE salary with tax receipts the only proof of income. No exotic mortgages allowed only simple fixed repayment mortgages. $1milllion Dollar statutory fine for each and every case of predatory lending.

It would have stopped any boom in its tracks and the homeowners that Mr Paulson is so worried about would now easily be able to afford their homes, it would give young people a fair chance, and women true independence. Houses would once again become homes and not another speculation. No bailouts would ever be required. True entrepreneurs and the real economy would be rewarded for the risk and effort involved FOR PERFORMING REAL WORK, speculators would face extremely lean times. My proposal simply balances credit against the available housing stock. It stops predatory lending and property speculation. We have to break this mindset that somehow if you buy a house you are entitled to it going up every year at a minimum of 10%+ a year, it is your right. You did not work for that money or the gain, it was not produced through real effort or production and please remember that for every $100,000 your house has appreciated over the last few years, is another $100,000 that your son or daughter is further in debt to be able to afford the same house. Most of my generation the boomers act like a bunch of freeloaders, we want quick and easy, risk free profits WITHOUT WORK.

My proposal would also divert money from mortgage or USURY payments to the bankers back into the real economy this would create more real jobs and growth and eventually lower taxation as the real economy expands.

The dirty little secret that Wall Street wishes to keep quiet is that the incessant inflation since 1971 when Nixon abandoned any form of economic responsibility with the closure of the Gold window has resulted in the outsourcing of America to less inflated economies, Wall Street has alone provided this inflation and all in the name of short term profit and greed, THEY HAVE destroyed America. The only game left in town is house price inflation which is why "The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth."