How do you spell "reflation"? Yesterday the Federal Reserve said it would pump $1.15 trillion into the housing and mortgage markets by purchasing -- among other things -- $750 billion of Fannie Mae and Freddie Mac MBS. Yowsa. Where is this money coming from? If you listen to the economists, it means that Uncle Sam is effectively printing more money to fund these purchases. The printing of money, historically, spurs inflation -- inflation that affects all asset classes, including land and homes, which leads to this question: how long will it take before all those 'underwater' mortgages are no longer underwater because of what the government announced Wednesday afternoon? Sounds a bit Madoff-esque, but maybe it will workâ¦
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