How is the government buying bad loans so that banks can loan some more help the economy?
by Mortgage Rates on Saturday, September 25th, 2010 | 4 Comments
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the governent buys MBS (mortgage backed securities) which are useless peices of paper. they are like a promise that they can be redeemed for money later. it’s just like if you ask someone for a hammer, they give you an IOU, promising to give you a hammer later. it’s completley pointless and worthless. it doesn’t help at all. the US has something called federal reserve banking, where money is essentially typed into accounts and made out of thin air. this documentary called “money as debt” made complete sense to me and really helped me to understand our economy. go to google video and type in “money as debt,” you will find it right away. also, watch part III of “zeitgeist” (this can be found with google as well,) and although biased, it really tells of the US’s financial policies.
1st – So the Wall street millionaires can worry no more
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2nd – so they can loan us hourly workers money once again so they can get a new Regal 45 footer
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3rd – So we have to work two jobs to make the payments on loans we are border line in not being able to make the payments on come Christmas time
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Get my idea
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It’s all for the wealthy people on Wall street
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No one else just those few who fly copter and land it on the top of the building when they come go to work
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That is why they are giving it to Wall street stock market for
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Think about it who will be getting all that money when those defaulted mortgages are purchased by the government
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I agree. I mean, if people couldn’t afford mortgage and other expenses/loan payments then, what the hell makes the gov think they would be able to afford them now?
Maybe that tax adjustment for 95% of the population promised by Barack would help ; ]
You need a course in money and banking. Banks monetize debt, within limits set by their capitalization. If they have nonperforming loans, that reduces their ability to make new loans. If the banks can sell off their bad loans, they can loan the money out to others. The loans create economic activity, thus expanding the economy.