Housing & oil bubbles bursting good for Americans because prices returning to normal?
With the oil and housing bubbles bursting, prices us ordinary folk pay are returning to their lower, more natural levels?
Ask your Congress person if this is true. Please tell me if it’s false.
The present mess is partly the fault of the Bush Admin because the SEC hasn’t been doing its job. But the “investment bank crisis” has been brewing since 1913 when CONGRESS gave up its Constitutional power to “coin money and regulate the value thereof” to the bankers. In 1913 CONGRESS gave us the Federal reserve (which is not government but bankers) and the income tax.
It started with paper money. Read your dollar bill, it says Federal Reserve NOTE. A note is an instrument of debt, a promise to pay, not actual payment. So we’ve been using IOUs to do business.
In 1934 America went bankrupt. So by law, people were forced to line up at the banks and trade in their gold coins (which is real money) for paper. In 1964 the government mints took silver out of the coins. Ah, now inflation can really start. The bankers can print all the money they want, loan it into circulation.
Since then the bankers have invented all manner of “investments” like “derivatives” and “hedge funds” which has resulted in a house of cards allegedly built on real estate loans.
For the last 20 years that house of cards has gotten taller and shakier. Where was government oversight? Where has the Securities and Exchange Commission been? Then a few years ago CONGRESS made the bankers start loaning “sub-prime” to people who they shouldn’t have loaned to, but as long as the payments were being made, the bankers were happy to collect the interest.
Over the last few years the Federal Reserve (which is the bankers, not government) has kept interest rates too low. Resulting in lots of people getting adjustable rate mortgages at the bottom of the interest rate cycle. Bankers aka Federal Reserve raise the rate (to curb inflation which they created by making money out of thin air) people’s payments go up, they can’t afford the payments and the house of cards starts to get very shaky.
Meanwhile, the last 2 years the Fed has been printing money and creating credit like crazy called inflation. On the world oil market, oil needs to be paid for by every country in “dollars”. Rampant inflation means it takes more dollars to buy the barrel of oil. Lehman, which just went under, was a major “speculator” driving up oil prices.
The reason oil prices have recently plunged is that their speculative bubble burst, as all bubbles will. So combine the housing bubble bursting, oil bubble bursting, we see the house of cards falling and major investment firms and insurance companies going under.
Can we blame Bush? Sure, the SEC has allowed this game to continue to the breaking point. But the true culprit is CONGRESS for not at least keeping a leash on it’s creation from 1913. CONGRESS is supposed to “regulate the value” of money, not the bankers.
But Congress persons are so busy getting reelected every 2 years they probably never had time to actually read The Constitution.
Meanwhile, people got suckered into investing 401k and IRA in the stock market, which is basically gambling with the speculative bankers.
So the current mess (and it’s not over yet) has been brewing for a long time and nobody in government, which is supposed to be providing oversight of their created corporations, has done their job, since forever. Maybe because the government folks have somehow benefited from . . . oh, no, that’s impossible, our public servants would never . . . SELL US OUT for their own benefit . Inconceivable. 🙂
Anarchis, thanks for providing an important piece of the puzzle. Actual knowledge is hard to find on Y/A