I am hoping that you would feel free to post when you think QE will end and Securitization of ponzi real estate will begin. My personal view is that the government is trying to establish a Bernanke Backstop with which to rekindle securitization as called for by Wells Fargo and others.
There seems to be a desperation effect here, because we have Bill Gross coming out saying he will flee bonds in anticipation of the demise of QE2. It is my view that both QE2 and the restart of securitization are both attacks on mainstreet.
It seems to me that QE will not end until or unless securitization is firmly established and interest only becomes the rage once more. There is the issue of strategic default, which is doing a great deal to slow down the process of easy money flow, but I don’t believe this will stop the attempt at easy money.
So, I am just wondering what the readers of Business Insider think? What will the future hold and are these the correct alternatives?
1. The first alternative is continued Quantitative Easing for at least two more years.
2. The second alternative is the rekindling of securitization, making the need for QE no longer necessary.
3. The third alternative is the rekindling of securitization with continuing QE.
4. The fourth alternative, God forbid, is massive war.
5. The fifth alternative is the end of the 30 year mortgage.
6. The sixth alternative is the massive increase of interest rates with no QE, no securitization and the possible deflation this would bring.
If there are more alternatives please list those as well. The basic premise I work off of is that the original ponzi lending scheme was a preplanned model for failure, even after Long Term Capital Management showed the world that this sort of model would not work. It would make money for banksters in the short term, but would ultimately fail because of massive leverage on quite conservative long term bets. Even after the failure of LTCM and Enron, there was no attempt from Basel 2 to cut back on the model concept. This is one more proof that the ponzi housing bubble was preplanned and it’s demise was also anticipated.
So if the demise of the bubble was anticipated, there has to be a continuing plan. It could take one of the above 6 alternatives or may take another road I have not anticipated. I would hope readers would comment on how they view this somewhat dangerous future unfolding.