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Bullcrap Ben Bernanke Has Telegraphed Another House Bubble
I posted the following early this year on my blog. As we all now know, it has gotten worse. The housing bubble is taking place in many areas that crashed the most. The question remains if it can sustain itself without Fed and Wall Street intervention. I say it can’t unless credit scores are thrown out the window.
Will the Fed pump a housing bubble as it winds down QE as a means of keeping the economy going? It will be interesting to see if that desperation on the part of the private Fed bank will take place or if Wall Street will panic and pull out and credit remains tight. No one has a crystal ball. But this bubble was planned as was the bubble in the last decade, and it could be extended:
This is really a no-brainer, folks. The bankers want regulation removed or watered down. So does the Fed who captured the Dodd-Frank Consumer Financial Protection Bureau (CFPB).
Therefore, I make the claim that the banking system, by wanting deregulation again, has exposed itself as being responsible for the Ponzi housing bubble and crash in the first place.
Think about it. Why would Bernanke and the Fed suddenly want removal of discrimination in lending to minorities again? Why would Bernanke and the Fed want loan requirements eased so that people who cannot afford the loans get them? This is what will happen, the loans will be plentiful, pushing up the value of the real estate, and the rules will not change.
Because the rules of looser lending will not tighten and may get looser, for years, likely, the result will be even more folks not being able to afford the houses they buy. This puts the risk, as Stiglitz has said, upon the borrowers, not the bankers. I discussed the shifting of risk here.
While Wall Street has conned us into the concept of a pendulum for loose and tight lending, one must remember that a sword is hanging from the bottom of the pendulum, sort of like the Capital One commercial with the swinging sword. But the sound practice should be stopping lending when too many folks cannot afford to pay the loans back. And think about it, if lending is like a swinging pendulum, why is it subject to Fed manipulation? You can’t manipulate a swinging pendulum!
Is the “swinging pendulum” another Fed metaprogramming phrase like “glass half full”, “restoring confidence” “resiliency”,etc.?
We need to be very clear, the Consumer Financial Protection Bureau was put under the Fed so that the Fed could control when and for how long, another housing bubble will exist. This is a fraud against the American citizens, who need a completely independent CFPB!
We know that the bankers sought deregulation by repeal of Glass-Steagall, and by the deregulation of commodity futures and all manner of derivatives. So Dodd-Frank comes along and the bankers, before the regulations are even set in stone, float the idea that the bill is too weak. Remember the Republicans saying the bill was too weak? Well, now the bill could be too weak and you don’t hear the Republicans saying that because they know their self fulfilling prophesy is likely working!
It is unfortunate that people cannot see the scam coming to us again by looking at the complete picture. So many people are bogged down in wandering through the trees that they cannot see the forest.
Mike Whitney pretty much sums up how the next housing bubble deregulation will play out, with the Fed orchstrating the next bubble just like it orchestrated the Ponzi Housing Bubble that took down the middle class:
So, here’s how it’s going to go down: Bernanke’s going to twist arms at the Consumer Financial Protection Bureau (CFPB) to define a “qualified mortgage” in a way that allows the banks to dump their garbage loans on Uncle Sam without any risk to themselves. Once the new regulations are in place and the banks get the “safe harbor” provision they want; they’ll start issuing mortgages to anyone who’s strong enough to sit upright and put a “X” on the dotted line, which is how we got into this mess to begin with.
One would hope that financial media, like Business Insider and Seeking Alpha and others would make a point to warn the public with red flares when this new housing bubble comes on board. It will likely look harmless in the beginning, as the last bubble did. But it morphed into a monster, and the next one could as well. The US government will be even more of a guarantee of the next bubble, with investors refusing to buy mortgage bonds that are not backed by the full faith and credit of the United States.
Please consider my ebook on Amazon which shows a great American calling for a simpler life without big banks doing harm to the people through speculation and reckless lending: Will Rogers From Great Depression to Great Recession.
