Reaganomics + Republicans + Fox News = Recession Part 2
Everything Federal Reserve Chairman Ben Bernanke does only drives our economy deeper into a recession while making the dollar weaker, stock market lower, and oil prices higher. Why?
After September 11th, then Federal Reserve Chairman Alan Greenspan, adopted an ultra easy money policy that drove mortgage rates to record lows. and got the real estate bubble blowing. At about the same time China joined the World Trade Organization and used "currency manipulation" to boost its United States exports to keep it's currency undervalued and it's exports artificially cheap. China recycled more than a trillion dollars back into the United State's bond market. This currency manipulation fueled the growing real estate bubble by artificially depressing mortgage rates - all the while laying waste to America's manufacturing base and ability to create jobs.
As investors entered the real estate market buying properties and flipping them the Mortgage industry began offering risky mortgages that allowed people with no money to buy into homes with highly risky adjustable rate "subprime mortgages." The stage was set... as Wall Street began to package these subprime mortgages into complex "mortgage back securities." Speculators jumped in and like a deadly virus, these mortgage back securities spread out to infect portfolios all over the world.
In 2006 when home prices stretched far beyond their true valuations some speculators pulled the plug by foreclosing. Meanwhile, those "exploding adjustable rate mortgages" began to do just that. As homeowners could not make their monthly payments home prices dropped and pushed foreclosures to record highs.
The downstream consequences for world credit market have been severe. As foreclosures have risen the value of mortgage back securities has plummeted. Until our economic leaders refocus on what made the American economy so great: sound money, fiscal responsibility, and a vibrant manufacturing base - a recommitment to those principles would do more to restore order in the global financial system and economy than more rate cuts and mulit-billion dollar bailouts!
(Some of the information here was gathered from UC Irvine buisiness professor Peter Navarro)
Peter Navarro's Web Site
After September 11th, then Federal Reserve Chairman Alan Greenspan, adopted an ultra easy money policy that drove mortgage rates to record lows. and got the real estate bubble blowing. At about the same time China joined the World Trade Organization and used "currency manipulation" to boost its United States exports to keep it's currency undervalued and it's exports artificially cheap. China recycled more than a trillion dollars back into the United State's bond market. This currency manipulation fueled the growing real estate bubble by artificially depressing mortgage rates - all the while laying waste to America's manufacturing base and ability to create jobs.
As investors entered the real estate market buying properties and flipping them the Mortgage industry began offering risky mortgages that allowed people with no money to buy into homes with highly risky adjustable rate "subprime mortgages." The stage was set... as Wall Street began to package these subprime mortgages into complex "mortgage back securities." Speculators jumped in and like a deadly virus, these mortgage back securities spread out to infect portfolios all over the world.
In 2006 when home prices stretched far beyond their true valuations some speculators pulled the plug by foreclosing. Meanwhile, those "exploding adjustable rate mortgages" began to do just that. As homeowners could not make their monthly payments home prices dropped and pushed foreclosures to record highs.
The downstream consequences for world credit market have been severe. As foreclosures have risen the value of mortgage back securities has plummeted. Until our economic leaders refocus on what made the American economy so great: sound money, fiscal responsibility, and a vibrant manufacturing base - a recommitment to those principles would do more to restore order in the global financial system and economy than more rate cuts and mulit-billion dollar bailouts!
(Some of the information here was gathered from UC Irvine buisiness professor Peter Navarro)
Peter Navarro's Web Site
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