Homes from the $20 millions: Current listings on the slopes in Park City, Utah.

Homes from the $20 millions: Current listings on the slopes in Park City, Utah.

For almost a decade the Federal Funds interest rate set by the Federal Reserve has hovered near zero. The thinking was that this would entice companies to borrow so-called "easy money" and invest it in new workers, factories, and productivity-enhancing technology. 

What really happened is a bunch of Wall Street bankers and industry titans (OK, and a few lawyers) took the money and built houses in Park City.

Even one of the best money managers in the world—legendary PIMCO boss Bill Gross—is saying "easy money" is hard on the economy.

"Low interest rates are not the cure—they are part of the problem," he said in a recent piece in Barrons. Instead of spurring new and exciting companies to invest in growth, they enabled old-school "zombie" industries to prop up their stock prices with share buy-backs. It's leading to grossly inflated asset prices (stocks, real estate, etc.) and fueling a bubble that's valuing Central Austin teardowns in the millions and Uber at more than $50 billion.

Which brings me to my point: Easy money is really hard on the environment. It enables worthless use of limited natural resources. Take this house on five acres, high in the back bowls Park City's Canyons resort.

Versailles in the Sky: One of Park City's ski-in-ski-out palaces.

Versailles in the Sky: One of Park City's ski-in-ski-out palaces.

Priced at nearly $8 million with six bedrooms, four baths, and 12,000 square-feet, it's relatively reasonable in a neighborhood of $10-, $15, and $20 million lodges. It has everything you'd expect in a ski chalet high in the mountains: Beautiful rock work and giant timber framing, plus a theatre, billiards room, and a huge unsupported spiral staircase beneath a soaring atrium.

But what's it doing at 10,000 feet in the middle of one of my favorite ski runs? 

Who cares? With money this easy, it'd be crazy not to build it.

Comment