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Jeff,(I didn’t read the paper either)I think, in other words I don’t really know this, but it seems that the oversupply of capital is in part a result of excessive inflows of foreign investment, mostly in T-bills but also in the GSEs. Then too, these flows combined with excessive domestic capital formations. So it would also seem that these combined flows needed to be put to work somewhere. So if not in housing, elsewhere, or just a loss via interest paid. from's email

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