Krugman’s last two pieces have been among his best. First, a plea that once over the crisis, we should not put off financial reform. The present disaster has been long brewing, we’ve seen it coming – and we’ve done nothing.

Second, a call to avoid Roosevelt’s initial fiscal caution. “You cannot spend your way out of this recession,” say the Hayeckians. Sorry, wrong. That’s exactly what you must do. Spend!

While waiting for Oracle Krugman to pronounce what regulatory measures he has in mind, at the Global Property Guide we take a housing market-centric view. Here’s what we say:

• Housing booms have been forerunners of almost all recent economic busts. Housing busts are lethal for banking systems, and in turn kill the economy.
• Houses are our biggest financial institutions, our biggest store of savings. Moderating the cyclical upswings and downswings of these boxes we live in should be right at the top of our regulatory priorities.

The outlines of a solution could be:

1. There’s no particular reason why regulators shouldn’t require institutions making mortgage loans to borrow long, and lend long. So - provide structural encouragement to a shift from short-term to long-term mortgage lending, thus decreasing economic volatility (short rates always move more aggressively than long).
2. Increase capital adequacy requirements throughout the system. Frown on off-balance sheet assets, on the model of the Bank of Spain.
3. Ask your central bank to explicitly target housing price stability, as one of its objectives. The Bank for International Settlements has been quietly nudging the world in this direction, but the idea hasn’t taken hold yet.

Of course, it’s tougher targeting long-term average house-price stability, than targeting the consumer price index (CPI). It is immediately obvious when the CPI gets off track, while house prices move in 10-15 year cycles, and ‘fundamental’ reasons can often be adduced for these cycles.

But we believe house price bubbles can be identified. We think it’s obviously worth trying. Or do you want to go through this all over again, in another 20 years?

• The Japanese are much richer.
• The Americans are richer (though their economy is collapsing).
• The Europeans are chugging along, a little poorer.
• The Eastern Europeans are slightly poorer than them.
• The Brits are quite a lot poorer, so are most Latin Americans
• The Kiwis and the Australians are very much poorer
• The Icelanders - let us not speak of them.

The crisis means that the Americans and (particularly) the Japanese will be more visible as property buyers.

For you and me, it opens up opportunities in New Zealand and Australia, in South Africa, and in Latin America.

Moral: Every cloud has a silver lining.

Japan. Consider how much cheaper Australia is for Japanese. What used to cost Y105 now costs only Y58.

These last happy three months (from the Japanese perspective) should mean lots of Japanese looking for mansions with swimming pools! Double the money – nice.

In Latin America there are also some big losers. Countries with strong currency declines:

• Mexico
• Brazil
• Chile
• Uruguay
• Colombia

The Colombian peso (which is typical of this group) has fallen quite sharply:

Latin American countries with moderate currency declines:

• Peru
• Argentina
• Guatemala

Latin American countries currencies which are US$-pegged, so no movement -

• Venezuela
• Panama
• Ecuador
• Costa Rica

We were recommending Latin America before the crisis. It is even better value after the crisis, especially for American buyers. Rather than admitting we made a mistake, we’re going to redouble our recommendations!

Eastern Europe has suffered less in the recent crisis than might have been expected. The Bulgarian peg to the Euro has remained firm. The Baltic pegs to the Euro have all survived (so far), despite volatility.

The Hungarian Forint, Czech Koruna, and the Turkish New Lira have fallen, but not disastrously. Even the Russian Rouble hasn’t done so very badly.

Ukraine has been forced by the IMF to delink from the dollar, and the Hryvnia has fallen strongly against the dollar, somewhat against the Euro. But local economists wanted this to happen even before the crisis.

The disaster is the Icelandic Krona, which this year has lost half its value against the Euro.

Icelandic Koruna is to Euro, as Australian dollar is to Yen.

The South African Rand has fallen sharply.

However the Arab currencies have remained firm.

In Asia, the two major losers are the Indonesians and the South Koreans.

• The South Korean Won has nearly halved in value:

• The Indonesian Ruppiah has declined significantly:

The world’s press has concentrated on the losers in the crisis.

It may be worth remembering that there were winners too, relatively speaking - the Japanese.