Monday, October 29, 2012

The gold standard or free money

The FACTS are that the American public is going to be shocked in the near future when reality hits and the number of homes waiting to be foreclosed upon actually start flooding the market. There is a "shadow inventory" of homes that have not even entered the foreclosure process that is astounding. It is significantly greater than you can even imagine. This rebound will not last and I predict that after the November elections (regardless of who wins) we will see a tremendous real estate crash unless ALL political parties get to work to address this issue. As the housing market goes - so goes the economy. And for the record, it doesn’t matter if interest rates sink to 0%. Banks are unwilling, for the most part, to free money to anyone unless you have absolutely perfect credit. There are few people that fit this criterion. Hence the reason that cash is king in this economy and most Sellers choose cash offers because they know they can actually finalize and close on a real estate transaction.
The housing bubble occurred in part because people were buying property they couldn't afford, but it didn't matter because they could always sell it, for more free money if they had to.
But people don't just buy homes for speculation. They buy them as places to live. Being able to afford a home that costs $1 million, or $750,000 means paying a mortgage that costs tens of thousands of dollars a month.
If you can afford it, great. But jobs have been disappearing from the US. Well paying jobs with some security are disappearing.
Rising housing prices, with a middle class that's being reduced, losing wages and moving backwards financially, doesn't go together. There aren't enough people making free money to support all the expensive housing out there.

Tuesday, October 16, 2012

It's time for a simpler lifestyle

The big banks tend to be those behind the federal reserve and use it to limit or destroy the smaller banks. just look at the recent crisis. Many smaller banks went under ( or were forced out or absorbed by the larger banks ).
This is how the large banks retain their power. A fed driven crisis every so often thins the herd of the competition and favors the large banks.
Being worried about this happening without the Fed is incongruent as this already happens now.
often what is needed is a severe pull in the opposite direction for a correction to happen and find the proper balance in the middle certainly there is more work to be done on Ron Pauls ideas.., but without using them as a starting point, true reform will never happen.
It returns the control of the economy to the people and banks may once again become an actual place to hold real, as apposed to virtual, money. Plastic cards could be account cards where funds of gold or silver are verified by the bank.
Banks would be trimmed back to their original purpose instead of as mini Fed creating money out of thin air. Credit might be tight for a while and the strength of the dollar would force a stop to the race to the bottom currency devaluation current currency war. Confusion would be global for a while until all central banks were inline or eliminated with people choosing real money instead of paper virtual money. Interest rates would be set by market demand which would more than likely increase substantially benefiting savers and penalizing speculators. This bill alone would turn thing upside down which is what is needed..

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