We all have heard what is happening in England, as austerity is causing more pain and less consumer spending. We know what happened in 1937, as the United States introduced austerity and started the depression all over again. Now we find out that Congressman Ryan is counting on a gimmick to save the $6 trillion dollars he boasts about. From Marketwatch is an article that exposes the little scam, though short in details. What we know is that Ryan is predicting massive excess inventory being built going forward in order to reach his goals.
While there is scepticism that this boom will take place, the powers that be would certainly want it to take place. Without something, they obviously know that the cuts will tank the US economy. Yes, predatory banking is here to stay. There are some signals that this is what the central banks want. First, Bachus of Alabama, as I have said, wants to do away with the Volcker Rule. This would allow the shadow banking system, funded by hedge funds, to rear its ugly head unimpeded.
Certainly, I have been writing about how Bernanke wanted the backstop of government guarantee for loans, and with this moral hazard in place, banks would have little constraint upon their reckless lending. The reintroduction of predatory lending, now that we see Ryan’s budget scam unveiled, no doubt assumes that people will take the same risks that they did in the last housing bubble. Only this time they will be fully aware of the outcome. Fear will likely grip these markets much more quickly, and Americans will be less inclined to be trapped with unsustainable paper profits.
I wrote recently that once the TBTF banks experienced the crack high of securitization, that they will want the fix again. Ryan is assuming they will get that injection from the Bernank.
So, Ryan, being an apparent foot soldier of the central bank cartel, is for starting the credit crisis all over again. What a guy! With patriots like this we really don’t need enemies do we?
I would say to investors, be very careful. But wait, all these loans will be guaranteed. Joe Taxpayer will be the backstop. No need to be careful. Ride that wave of moral hazard. As for Paul Ryan, the clown is hoping that this phony housing bubble will drop the unemployment rate to 2.8 per cent. Happy days will be here again. But don’t let your babies grow up to be homeowners unless you want them to be crushed by debt like the last wave of unsuspecting victims.