A Different Kind of Blog

news and things sacred and irreverent put together by opinionated people.

Caveman, You Said What??

Posted by lawman2 on December 17, 2008

fed_rate_070918_msAs interest rates around the globe plummet, the Fed bluntly announced that it would print as much money as necessary to revive the frozen credit markets and fight what is shaping up as the nation’s worst economic downturn since World War II.

In effect, the Fed is stepping in as a substitute for banks and other lenders and acting more like a bank itself. “The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth,” it said. Those tools include buying “large quantities” of mortgage-related bonds, longer-term Treasury bonds, corporate debt and even consumer loans.  WHAT THE HELL?? HEY THIS SOUNDS KINDA FAMILIAR…

cash4In layman’s language, what the Fed is saying is that it won’t hesitate to turn on the printing presses and flood the system with new money if that’s what is deemed necessary to get the economy going again. Actually, the Fed has already done quite a bit of this by buying up large quantities of mortgage-backed securities.

Well, that wasn’t good enough, for this failed economy and economic system. So now it’s “near zero,” which means “zero.” Just like Japan tried for years and years, to no effect! The Federal Reserve Bank is now out of “traditional ammunition,” according to almost-president Barack Obama, and your government is now printing money at an insane pace, and then banks are taking this money and immediately buying U.S. Treasury bonds, because nothing else is safe, and that is pretty much the end of this particular feedback loop.

hb100606Here’s something kind of funny: This current economic collapse can be largely traced back to the 2003-2004 1% Fed Rate era that fueled the housing boom by making absurdly inflated real estate prices “affordable” because these interest rates — both fixed and the evil adjustable ones — hadn’t been so low in half a century.
While it was sloppy/greedy “stated income” no-doc teaser-rate reverse-equity 105% loans that enabled Juan Drywallhanger and his old lady, Amber Asstattoo, to “buy” a 2,800-square-foot stucco monstrosity on a 3,000-square-foot lot in the Adobe Falls development behind the Sunburst Towne Center’s (now closed) Bennigan’s and Linens ‘n Things in the first place, it was the artificially cheap borrowing costs that made the option-ARM introductory payments on a $579,000 “Tuscan inspired” vulgarity briefly plausible for people making $40,000 per year and already buried in credit-card and SUV debt.
So, now that grand era can return again! Except for the loan part, as banks are not using any of this bailout money for, uh, lending.
WHAT ARE YOUR THOUGHTS???  Other than Caveman you didn’t just sat that….
 

 You can read more caveman’s perspectives from lawman Just A Caveman

 

 

 

 

Read more of caveman’s post here Just A Caveman

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3 Responses to “Caveman, You Said What??”

  1. tothewire said

    brat!

    Like

  2. Lawman2 said

    i know your well kept secret tothewire…you actually can debate and do it quite well.but you got nothing for me baby?

    Like

  3. tothewire said

    why would I want to debate this issue?

    Like

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