The world of property values is bifurcating and at the same time running toward the same bad end.

Economies which sailed through the financial crisis are galloping ahead on their way to the cliff where many leading economies flew and fell down dead.

In an excellent story today by Wall Street Journal columnist David Wessel (Housing Bubbles Percolate Far From Crisis Elsewhere), a stark picture is drawn comparing the economies which had a banking crisis and those which didn’t.

Among those countries which did not have a financial crisis, property values in Australia, China and Singapore have increased in value by 50% to 75% since 2004. Hong Kong is off the charts. Prices have appreciated 125% in the same period (Please see the right chart above for “No banking crisis” countries.).

The governor of the Bank of Israel, Stanley Fischer, is quoted as to how this has come about:

“In countries where the financial system was not seriously damaged during the global crisis, housing prices have risen rapidly. That’s because when interest rates were cut sharply to deal with the crisis, mortgage interest rates also fell rapidly, and people responded by borrowing to buy houses—thereby driving up the price of houses.”

This description of the new bubble describes the old bubble. We all know the bubble-broken countries of Spain, Great Britain, Ireland, and the United States. We all know how it happened.

Cheap money given freely and widely created a boom in prices. The bust created massive losses for homeowners and mortgage lenders. Instead of facing up to losses which we created, we exported our failure by reinventing cheap money – the devil which created the first crisis.

Free money has been Fed policy through much of the last decade and the period of the end of 2008 to today is the most extreme period of free money.

It reminds me of Mexico and Columbia. The American drug habit creates underworld organizations which rivals or surpasses their nations’ armies.

If we legalized drugs, the violent criminal organizations in those countries would disappear. So too if we had honestly come to terms with huge losses in mortgages, we would not have exported our failure to innocent countries. Now we see a huge run in the price of gold, oil, and food, in addition to the run in property which we have just shown, which all have in common that they are not the U.S. Dollar which earns a return of nothing.

“Some big countries had a housing bubble that burst, provoking the biggest financial crisis in half a century,” writes Mr. Wessel. “To avoid a depression, they flooded the world with credit. And that credit threatens to create new housing bubbles in other countries. No one ever said globalization was easy.”

Thus do bad investments held by banks protected by a policy where they are presumed too big to fail — thus do they create a world of failure where everybody will fall.

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Michael David White is a mortgage banker in Chicago.