Bursting of the Housing Bubble Is Too Close for Comfort--or Silence

allen aslan heart - The 7th Fire

After nearly 10 years of unprecedented growth, the bottom is about to fall out of the US housing market.  A total of $2.5 trillion….or more…. will be wiped away in a matter of days.  But, as awful as that sounds, that's not the worst of it.  Because of the enormous house of cards created by the Financial Manipulators over the past 10 years, the entire U.S. financial system is in jeopardy. 

Fueled by artificially low interest rates - and the dangerous policies of the huge mortgage vacuum cleaners, Fannie Mae and Freddie Mac…. and Fed Chairman Alan Greenspan, millions of Americans are about to be blindsided by an event more destructive than the Stock Market Crash of 1929 !

Dean Baker and Mark Weisbrot, founders of the Center for Policy and Economic Research insist the housing market is a catastrophe waiting to happen.

John H. Vogel, Jr., professor and faculty director at the Tuck School of Business at Dartmouth College, Hanover, NH described the housing market as a runaway train destined to derail in disaster

This nation's enormous consumption bubble - created entirely by those who manipulate the economy is in its final days.  In fact, the dominoes have already begun to fall in a dramatic event that will come to a head soon!

When? Robert McHugh has looked at the data and the graphs and it could be as soon as June 15. On Sunday, May 30 he reported that,

the Federal Reserve has confirmed our Stock Market Crash forecast by raising the Money Supply (M-3) by crisis proportions, up another 46.8 billion this past week. What awful calamity do they see? Something is up. This is unprecedented, unheard-of pre-catastrophe M-3 expansion. M-3 is up an amount that we've never seen before without a crisis - $155 billion over the past 4 weeks, a $2.0 trillion annualized pace, a 22.2 percent annualized rate of growth!!! There must be a crisis of historic proportions coming, and the Federal Reserve Bank of the United States is making sure that there is enough liquidity in place to protect our nation's fragile financial system. The amazing thing is, the Fed's actions mean they know what is about to happen. They are aware of a terrible, horrific imminent event. What could it be?

One can draw no other conclusion except that the Fed is acting irresponsibly in its managing the money supply, in fulfilling its duty to "maintain a stable currency." I reject the notion that the Fed is acting irresponsibly. No, something is up, bigger than we have ever seen in the history of the United States.

THE TOTAL DESTRUCTION OF THE U.S. HOUSING MARKET

This shocking financial scenario is not only completely unavoidable... it's already well under way! If you are listening carefully, you can pick up hints that point toward the agendas behind the words. Benjamin Wallace Wells, editor of Washington Monthly, wrote in the April 2004 issue that:

…during the last week in February, when Greenspan recommended that the home-owning public take a good hard look at switching from fixed-rate mortgages, under whose terms payments stay the same no matter what interest rates do, to adjustable rate mortgages (ARMs), where payments fluctuate along with interest rates--which, right now, makes close to zero sense. Interest rates are lower than they've been in 30 years, and, with all economists predicting a general economic upturn, and Bush's budget deficit and the weak dollar sucking up capital, little doubt exists that interest rates must rise, in which case, switching from a fixed-rate to adjustable-rate mortgage would be pretty costly for any family naïve enough to take Greenspan at his word.

What’s Greenspan talking about?!

Quite simply, Greenspan is trying to keep a wobbly and fragile recovery alive--and using mortgage refinancing to do it.

There are many strange things about the choppy recovery we're in, but among the most curious is that it is being fueled largely by consumer spending. Why consumers should continue to spend, and why they've done it throughout the recession, is not immediately obvious. After all, average income growth has been puny in the last few years. There's been a big falloff in jobs. Health care and tuition costs have only been going up. And the stock market has spent the last three years unsuccessfully huffing and puffing to get back to the level where it was in early 2001. Why have consumers been spending so much?  

Americans have been using their homes as ATM machines, refinancing their mortgages in order to fund their spending …. The one sector of the economy that has consistently swelled has been housing prices.

With home prices rising and the Fed keeping rates low, a mortgage refinancing industry that barely existed 15 years ago EXPLODED into one of the fastest growing sectors of the financial services industry. Last year, one-third of all homeowners used cash-out mortgages to refinance their homes, a rate roughly consistent over the past five years.

American homeowners have gained $1.6 trillion in cash from refinancing in the last five years, and those gains have flowed almost wholly into purchases of consumer goods. The resulting spending, says Wharton's Susan Wachter, is "propping up" the American economy.

The consumer spending bubble! Based on artificially low interest rates!   

	There may be a crash.  The economy has been propped up and manipulated for so many years that there is not much left for manipulation.  Common folk cannot afford to buy a home.
Home     Eliminate Debt    Make Money Online