The Housing bubble that took place in the US maintains deep significance in its connection to Marx's theory of Overproduction. Housing prices started to peak in 2006 quarter 1, declined following on and into 2007/08. The fall in prices led to many "workers" not being able to pay back their mortgages, with the rapid decrease in consumer confidence diving down prices further into to new lows of 2012.
The essential cause of the crises was the over supply of credit into the US economy, most notably the highly risky Subprime mortgages supplied by high profile financial institutions such as Fannie Mae and Freddie Mac. The excess credit had resulted in devastating effects following the collapse in the US housing market, the most notable of which being the Financial crises.
Subprime mortgages amounted to $35 billion (5% of total originations) in 1994, 9% in 1996, $160 billion (13%) in 1999, and $600 billion (20%) in 2006 - these figure convey that credit was oversupplied in the US economy.
In October 2007, the U.S. Secretary of the Treasury called the bursting housing bubble "the most significant risk to our economy", this emphasises my initial point that the housing bubble ,influenced by Overproduction, caused the Financial crises.
The essential cause of the crises was the over supply of credit into the US economy, most notably the highly risky Subprime mortgages supplied by high profile financial institutions such as Fannie Mae and Freddie Mac. The excess credit had resulted in devastating effects following the collapse in the US housing market, the most notable of which being the Financial crises.
Subprime mortgages amounted to $35 billion (5% of total originations) in 1994, 9% in 1996, $160 billion (13%) in 1999, and $600 billion (20%) in 2006 - these figure convey that credit was oversupplied in the US economy.
In October 2007, the U.S. Secretary of the Treasury called the bursting housing bubble "the most significant risk to our economy", this emphasises my initial point that the housing bubble ,influenced by Overproduction, caused the Financial crises.