Alan Greenspan continues to show us just what kind of man he is, and we come away feeling disgust and loathing. Greenspan makes a couple of points that just must be addressed if we are to capture that essence of a ponzi scheme builder exposed. First, we know that he lied when he said he and no one else saw the housing bubble coming. This is wrong on two points. First, many knew it was coming as blogs were on the story fast. And second, he knew he was blowing a bubble. In February, 2004 he told the public that they could get a better deal through taking out an adjustable mortgage. He is an economist. Economists know that if you introduce artificial demand you drive up prices to an artificial, unsustainable level. There is nothing more artificial than taking out a massive amount of easy money, no money down, interest only, adjustable mortgages.
Second, he blames government regulation for the slow recovery. Yet we know that there are other factors, like low demand for goods and services. Greenspan is saying that the stock market here in the US and abroad have grown to the levels where there should be a wealth effect. But really, for the retail investor the market went to 10,000 on April 10, 2001. We then crashed some, went up on the housing ponzi, and crashed again to the 6k range. So the market has been testing 12, 000 at the time of this article. So what? What kind of wealth effect just makes up for losses, assuming you were trusting enough to be fully invested like you were back in the dot com days?
Greenspan ignores what has happened to mainstreet, who, if they have stocks, have them locked up in a 401k. Either the wealth effect is put off to the future or mainstreet has borrowed from the 401k and must repay it over time. So, the very fact that the CFR even believes this mumbo jumbo is testament to the crony lying that is taking place continually by these so called "leaders" to the American people.
The truth of the matter is that Greenspan wants another bubble and wants it fast. He does not want Bernanke's low interest rates to go to waste. He knows that loans going forward will likely be guaranteed by government, and that this will result in a greater moral hazard than any he is currently worried about.
Low interest rates in and of themselves may not cause a massive bubble. But that is not all that Greenspan did to blow a bubble in the first place in housiing. He did much more. He allowed shadow banking to take place. He allowed easy money loans to go unregulated. He allowed a system of derivatives and bets against housing. He allowed the American people to be fleeced by adjustable mortgages that he, himself, advocated.
It is estimated by the Fed's own statistics that the unregulated shadow banking system made up over 70 percent of the subprime loans, and all of the prime, jumbo and alt a ponzi loans. The CRA, who jumpstarted the bubble, made up less than 30 percent of subprime lending, and pulled out of the business in late 2003. That corresponds to the appointment of Tim Geithner as president of the New York Fed, the most powerful Fed bank. Fox reported most about the CRA, possibly in an effort to push towards deregulation. But the CRA only started the bubble. The shadow banks made the bubble a serious danger to our economic system.
I am tired of hearing this man's lies. I want America to know what they are, and I want America to know that the CFR is nothing but an apologist for reduced US sovereignty. I have made the case elsewhere that this reduction in sovereignty gives bankers power to control credit and bubbles in housing and other commodities. And certainly, we know that we are all paying too much for this preditory attack on mainstreet. In fact, the predatory attack in the housing and mortgage market was thought up at Basel 2, and is proof that this attack on sovereignty of the nations, while sounding noble, is far from it!
So, as Greenspan goes through the twilight of his life, and even beyond his time here, this record will hopefully attest to this man's odious deeds and lies, that inflicted massive pain on the citizenry.
Second, he blames government regulation for the slow recovery. Yet we know that there are other factors, like low demand for goods and services. Greenspan is saying that the stock market here in the US and abroad have grown to the levels where there should be a wealth effect. But really, for the retail investor the market went to 10,000 on April 10, 2001. We then crashed some, went up on the housing ponzi, and crashed again to the 6k range. So the market has been testing 12, 000 at the time of this article. So what? What kind of wealth effect just makes up for losses, assuming you were trusting enough to be fully invested like you were back in the dot com days?
Greenspan ignores what has happened to mainstreet, who, if they have stocks, have them locked up in a 401k. Either the wealth effect is put off to the future or mainstreet has borrowed from the 401k and must repay it over time. So, the very fact that the CFR even believes this mumbo jumbo is testament to the crony lying that is taking place continually by these so called "leaders" to the American people.
The truth of the matter is that Greenspan wants another bubble and wants it fast. He does not want Bernanke's low interest rates to go to waste. He knows that loans going forward will likely be guaranteed by government, and that this will result in a greater moral hazard than any he is currently worried about.
Low interest rates in and of themselves may not cause a massive bubble. But that is not all that Greenspan did to blow a bubble in the first place in housiing. He did much more. He allowed shadow banking to take place. He allowed easy money loans to go unregulated. He allowed a system of derivatives and bets against housing. He allowed the American people to be fleeced by adjustable mortgages that he, himself, advocated.
It is estimated by the Fed's own statistics that the unregulated shadow banking system made up over 70 percent of the subprime loans, and all of the prime, jumbo and alt a ponzi loans. The CRA, who jumpstarted the bubble, made up less than 30 percent of subprime lending, and pulled out of the business in late 2003. That corresponds to the appointment of Tim Geithner as president of the New York Fed, the most powerful Fed bank. Fox reported most about the CRA, possibly in an effort to push towards deregulation. But the CRA only started the bubble. The shadow banks made the bubble a serious danger to our economic system.
I am tired of hearing this man's lies. I want America to know what they are, and I want America to know that the CFR is nothing but an apologist for reduced US sovereignty. I have made the case elsewhere that this reduction in sovereignty gives bankers power to control credit and bubbles in housing and other commodities. And certainly, we know that we are all paying too much for this preditory attack on mainstreet. In fact, the predatory attack in the housing and mortgage market was thought up at Basel 2, and is proof that this attack on sovereignty of the nations, while sounding noble, is far from it!
So, as Greenspan goes through the twilight of his life, and even beyond his time here, this record will hopefully attest to this man's odious deeds and lies, that inflicted massive pain on the citizenry.
The Moral Hazard of the Greenspan Put
The Greenspan put refers to the practice of the Federal Reserve central bank from the late 80's through the present, with Bernanke also holding to the theory. The put means that the central bank would inject liquidity into the markets at the first sign of downturn of the markets. This caused a propping up of stocks and bond values, keeping interest rates very low. Of course this has done damage to mainstreet, who was looking for a safer investment than stocks. And it allowed the moral hazard of excess leverage to enter the system to drive markets higher than they should normally be. The Greenspan put was also spoken of as the plunge protection team, set up to prevent the after effects of a crash. Only problem is that leverage caused crashes to become more frequent.
It is interesting that Greenspan talks a lot about moral hazard, but he doesn't say much about the moral hazard of the Greenspan put or of easy money real estate, guaranteed by the government. Indeed, since the market for private label real estate has dried up, those drooling for more real estate appreciation want government to guarantee loans, at considerable moral hazard. Give banks a guarantee and you will have homeless people getting multiple offers on loans. Even if Fannie and Freddie go away, the guarantees will still be placed upon the taxpayer by the banksters in charge. And the Fed will take heed. The Greenspan put has placed trillions of dollars of debt upon the American public. It comes with a cost. Housing bubbles are predatory. They come with a cost. Many families suffered greatly as they were told they would be locked out of the real estate market if they didn't buy, buy, buy!
Of course, the result of the put is a privatization of profits and a socialization of losses. The banksters make the profits and the taxpayer foots the bill for the losses. This is a fascistic system that preys upon sovereign nations, not just the United States. Central bankers have literally taken over. And it is not communism as some say, because then profits would go to the party. No, it is a corporatism, even a fascistic system that we now have. And the backstops will not end until the central banks are put out to pasture.
I offer a complete analysis of how the central bankers blew the credit bubble, complete with chart and enough blame to go around to all leaders in the past 30 years. I urge you to read the work. The 60% discount can be applied by using the code EL88Y as you order. I hope these articles are helpful in putting these misdeeds of the Fed in proper perspective. No matter if you are liberal, or conservative, or libertarian, you have been had by a force much greater than any nation.
We use third-party advertising companies to serve ads when you visit our website. These companies may use information (not including your name, address, email address, or telephone number) about your visits to this and other websites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here http://www.google.com/privacy_ads.html