Bruce Peterson (CT 4th October) is right in his analysis of the reasons why the world is facing a financial crisis. Too many loans have been given for price inflated houses. Australia is in a similar situation as the USA but we have been shielded by the China boom and by the fact that mortgagees in the USA can walk away from their houses and leave the house as payment for the bank. If the same rules applied in Australia then many people with large mortgages, little equity in their houses and with high interest rates would desert their houses. Australians cannot do this as their debts follow them and so we have not had a rapid deflation in house values. However, we still suffer from over inflated house values and sooner or later the value of houses has to come down – probably through inflation of the currency. A solution to the problem is for the Reserve Bank to issue special low interest money to banks to be loaned to build real assets. For example the low interest money has to be spent on building a new house or it has to be spent on building renewable energy infrastructure. This would avert an Australian financial meltdown, make houses affordable, remove the need to introduce an emissions trading scheme, and reduce inflation. It is really very simple and is a great opportunity for political parties to unite on a common cause.