From the Wall Street Journal comes this gem from John Makin: "The Inflation Solution to the Housing Mess." Makin says that Washington will have to nationalize the mortgage industry, or, it could just do the prudent thing and prevent that by printing money.
The policy alternatives in the post-housing-bubble world are painfully unpleasant. In my view, the least bad option is for the Federal Reserve to print money to help stabilize housing prices and financial markets.
...While there is a substantial risk that inflation may rise for a time – this would be the policy goal – monetization is more easily reversible than nationalization of the mortgage market.