The Republicans have become the agents of the IMF bank! We know that the Democrats are not guiltess, with Obama wanting the IMF inspired VAT tax early in office. But it is the Republicans who want the balanced budget in the US, similar to what is being imposed upon Italy. It is pretty disgusting if you think about the reasons why this push for austerity is so pronounced.
The Italian balanced budget is being forced upon the nation in exchange for liquidity. Certainly, the Republicans almost got a balanced budget amendment through the debt ceiling debate. While it is the Eurozone and ECB that are applying the screws to Italy, the IMF has called for these reforms on their website for a long time, along with the Italian government selling lots of public property. Sound familiar? The IMF is deeply involved in this austerity push worldwide, as we have seen elsewhere.
The thing that makes all this so odious and unacceptable is that the IMF is at the forefront of seeking massive securitization of housing loans, government guarantees of such loans, and another housing bubble. The IMF is the enemy of main street because bankers are the enemy of stable real estate prices. A balanced budget just so that housing bubbles and guarantees can be established is too much for citizens to bear. It is wrong and it is at the root of speculation on shelter, a basic human need.
So Republicans have become the central agents of bank greed. I think people concerned about their retirement futures should avoid voting for this foreign agent, the Republican Party. I have written that both Eric Cantor and Paul Ryan are agents of the hedge funds, seeking to keep as many off the list of systemic risk as possible. The more hedge funds free of the label means the more hedge funds that can funnel money to shadow banks making easy money real estate loans.
Even if you have a 30 year fixed, which is normally a prudent loan, that loan is put into jeopardy because of the easy money loans to your neighbours, that can introduce artificial demand and price. Your 30 year loan can be a losing proposition if your house crashes in value through no fault of your own due to this artificial easy money demand. As long as easy money is an option, you may be better off renting and investing the rest.
The IMF plan is pretty clear, and that is to extend the casino on a more regular basis to main street. The casino of easy money home loans can be manifested every decade if these people get their way. Certainly our big banks want these loans, and I have written about Wells, Bernanke, Dimon and others wanting guarantees and easy money. The guarantees actually help the easy money as investors view the bonds from these loans as being virtually risk free. But cheap money does not last forever, and these guarantees could come home to roost. Can you imagine the cuts needed by government when every last mortgage is guaranteed in a housing crash?
If Americans are serious about keeping the social safety net, and the safety of stable housing prices, they need to rise up against the IMF and the guarantee of easy money loans. Just remember that when the Republicans say that government spending crowds out investment, what they really mean is that government spending crowds out government guarantees of loans.
Of course, in Italy, house prices did not crash in the recession. So who knows what the bankers have cooked up for the Italian housing economy. However, one thing is sure, in the US, the banks want the capacity to lend to a market that is increasing in value. The banks fear the lack of demand without a housing bubble based on easy money. The banks no longer want the 30 year fixed. And that is bad for America, but these agents of the IMF, the Republicans, are blind to that fact.
People seek securitization of loans in order to pawn risk onto others. That is what banks want to do. The only way they can convince the investors that the risk is low is through guarantees of loans by government. And that is where the balanced budget amendment and the Republican IMF operatives come in. Don’t vote for them and boycot the 30 year mortgage. Bankers were trusted from after the depression until about 1995. That absence of trust in bankers is now permanent without a constitutional ban on easy money to all but the wealthiest Americans.
Early this year, investors were allowed an extension of the no flip rule. So going into the second year, foreclosures are being gobbled up by investors in an effort to rekindle the housing market. If that manipulation is being allowed, look to possible intervention by the central bank in purchasing homes. We know that the Fed buys commercial real estate, so that it would be a sign of easy money if they go into the residential market. Artificial price rise is only sustainable by easy money as a help.
Cantor and the Republican operatives of the IMF must be thrilled.
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