Trickle up Effect? Can’t We bail out people that have the loans to save Wall Street?
by Mortgage Rates on Sunday, October 17th, 2010 | 4 Comments
-
Mortgage Info
-
Updates
-
Useful Links
-
-
Tags
2010 About article Auctions bank banks best Business buyers change Credit Debt Equity Financial First fixed Foreclosure From good Government Help Home house Housing interest Loan Loans Market more Mortgage Mortgages Need News options qualify Rate Rates refi refinance Refinancing should this Time variable would-
Meta
The fed, and low interest is the cause of the problem.
Lower than normal interest (and other policies) create artificial demand, creating an artificial bubble.
That bubble is worthless, because it exceeds market demand. Therefore it causes the dramatic drop in prices – the problem. This is the bust.
It is a predictable boom and bust created by government. It is exactly why the fed should not exist, because its existence CAUSES this problem.
Realize, these loans are CREATION OF DEBT. It is not money being held. The fed makes the money, to loan it.
The bail out is happening because government perpetuates its problems for reasoning behind government increases in size, cost, and power. It also allows transfer of wealth from us the tax payers (who pay with weaker dollars), to those who get the money first (electronically while the dollars still hold their value).
When the fed creates a trillion, it devalues the money in circulation by a trillion.
Imagine $100 in your pocket. Pretend it is all the money in usa. The fed then makes $100 and gives it away. That means the $100 in your pocket is now only worth $50 at the store. Your dollars have lost half value, because there is 2x as much in existance.
This is how government spends and spends and spends without the need to raise taxes. They create the money, which devalues OUR money, which is ‘out of sight out of mind’ to most of us. Besides, it takes some time for our dollar to be devalued (electronic transfers at the highest level, to the dollars in our hand at the lowest level), so by the time our dollar is weaker a year later, we have frogotten the cause. Ron Paul calls this “the hidden tax”. It is a tax that hurts the poorest the most, and those on fixed incomes the most.
Some are predicting the dollar may loose %90 of its value in the next year or two. Meaning that $2 loaf of bread might cost $20 – all due to the massive debt and spending of our government.
Love the idea, but rich people won’t be able to line their pockets at the taxpayers expense with that idea.
Also it doesn’t take into account all the other flubs and underhanded things that the finance companies did to get into this mess.
looks like to me that the cause of this mess is crooked people running the thing.not only that, but they got rewarded for it. not even a slap on the wrist. this is why we pay taxes? to let the crooks run off with our money. we need to clean washington out from the janitor on up. they say power corrupts,i say if you put crooks in power, you get what you deserve.
This whole plan is wrong. How do you solve a problem by starting with a solution? They first need to identify the specific cause or causes that got us into this mess, address them on a point by point basis to make sure we don’t get into another similar mess, and then create a practical solution. Just throwing money at a problem doesn’t solve anything.