Let's face the fact that the only way to reimburse trillions of dollars is through inflation. If we were to draw a lesson from the Vietnam war, which ended in 1975, we'd see that the only way to pay down the debt was through inflation in the late 1970s and the early 1980s. We are going to go through the same thing. The only way to reimburse the trillions of dollars that went into the Iraq war, based on the way in which the United States is trying to absorb the “toxic debt”, would be through inflation.
Do you not fear the worst, if we were to allow a large number of variable rate mortgages at 1% or 1.5%? If, all of a sudden, the rate were to rise to 13%, which is far from unthinkable, would we not be creating our own sub-prime crisis? Not for the reasons raised by Mr. McCallum, but rather because we would have granted too much credit to people attracted by rates which are simply unsustainable.