The true risk with all of these securities is the fact that real-yields are actually negative. So I don't think this is an issue of ability or willingness to pay, it's really that you are getting negative real returns.

Most fundamentally, the subprime bubble was created by- a surfeit of global liquidity due to large current account surpluses in China and other emerging economies and easy global monetary policies; a flawed private mortgage securitization process that funnelled the liquidity into poorly underwritten mortgage and other loans; and weak regulatory oversight that failed to catch and rectify the problems in the securitization process.

The daily turnover of the foreign exchange market is around USD 3.2 Trillion, meaning that in a few weeks of trade, enough capital is circulated to pay for all of global trade in a year. Capital is the driver, NOT trade.

There are no people called entrepreneurs but people perform entrepreneurial functions at different times. Edison performed great entrepreneurial acts. But he was also fierce opponent of innovation when it threatened his business interests.

Firstly, inflation is always and everywhere a monetary phenomena. Secondly, the Phillips curve is dead and buried. US employment, and domestic measures of capacity utilization didn't even work 40 years ago! We stuck a stake in the heart of such measures about 15 years ago.