>http://tinyurl.com/3rpsb4
I don't often disagree with you Bob, it may be that for a change ECB has it right... or at least partly. Bernanke in following the path Greenspan is continuing the destruction of the dollar and assisting in the destruction of our real estate market. First, the Fed is not a government operation, even if the Chairman is appointed by the President. It is a private bank run by the banks. It was this supposed fear of inflation that kept the Fed dropping interest rates. With this continuous drop in interest combined with the increase in money supply, lenders, flush with cash, began making loans that they really shouldn't have. It was the availability of no doc 100% loans that and some, even more generous, that were sold by brokers unconcerned with the ultimate collectability of the debt that led to many bad decisions. These loans were then sold to investors, often bundled and sold to pension funds, etc. The lending institution had, at that point made its money and did not c are ab out the stability of the loan. It was only later when bargain rates began to adjust upward, investors realized that these were not good deals and the market dried up. Bernanke and Greenspan were not responsible for the bad loan policies, but the facilitated them. Essentially as the money supply increased along with low interest rates, the value of each dollar decreased. Many of us fuss about increased taxes, but the inflation of prices and devaluation of the value of the dollar were hidden taxes on everyone. At one time, I was a fan of cheap money, but having seen the results I have to say it is a bad idea as it just devalues everything we have... just look at the price of our homes. I invest in real estate and as an example of what this does to people not so familiar with the markets and just wanting to buy a home, I got a call from a woman wanting me to buy her house. Two years ago they paid $299K, with a 100% interest only loan on a new house. She was now in the middle of a divorce and neither she, nor her husband could afford the house alone. The most similar houses in the neighborhood sold for recently was $280K. The problem is obvious, particularly considering the 5 to 6% real estate commission on top of the selling price. I told her the only thing I could do would be contact the lender and see if they would accept a discounted amount... she did not want to do this, so at best, that house was one more foreclosure. Now, money is available, but the surviving lenders have tightened requirements excessively as the pendulum has swung back the other way. Eventually it will come back to something reasonable, assuming the government does not get too involved. -- Larry Miller --- StripMime Report -- processed MIME parts --- multipart/mixed text/plain (text body -- kept) message/rfc822 --- _______________________________________________ Post Messages to: [email protected] Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/%(listmsgid)s ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
