In posting this, I’m aware that I’m taken some of the punch out of Frank Shostak’s outstanding article, just submitted, which might run Monday. He covers the technical aspects of what precisely happened to monetary policy leading up to this crash, and his presentation is the best I’ve seen. Several times, he points to the great inflation between January 2001 and June 2004 as the leading cause. He doesn’t mention 9-11 in this draft but it suddenly dawned on me what should have been very obvious. What we are seeing now is a response to the response of 9-11. Just eyeballing the TMS, data here, you can see that the Fed added $1 trillion plus to the money supply in that period, and the money chase the fashion of the day, which was housing. Thanks to the Fed, the terrorists ended up doing more damage than even they could have hoped.