Zyroh
Member
- Joined
- Jan 6, 2011
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- 237
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The FED was pumping billions into the financial sector while lowering interest rates during and after the recession of '01.. There was plenty of money to meet the increased demand. However if the demand for new homes had remained constant the bubble would not have happened. The pushing for everyone to own their home, ready or not, stimulated demand to almost double that of before '01. That demand created the boom, the bubble and it's eventual collapse. Fannie, Freddie, bundled mortgages and derivitives would have never made the news without the bubble and it'a collapse.
i'm sorry but your understanding of this situation bothers me. it's so full of half truths and twisted logics that there's no way of fixing it in this post. nothing you said was completely wrong, but your description and conclusions show a real lack of understanding. but hey, let's give it a try.
curious: what billions did the fed pump into the system during and after the recession of '01. if you're talking about expanding amount of money in the system, they've been doing that through credit since the '70's when we left the gold standard, check shadowstats.com for an explanation of that.
you seem puzzled on the idea of demand. the government has been administering policies with the goal of expanded home ownership since it created fannie mae in 1938. pretty consistently since then the federal government has been coercing the majority of the population to go into debt and invest in a single market, real estate. the majority of this nation's wealth and leverage is all in a single market, and it's been expanding long before bush, clinton, carter, greenspan, bernanke. but all these men failed to see where it was leading.
this of course was all put into overdrive when glass-steagall was repealed, further bank deregulation allowed the bundling, fraud the fraud power created mythical amounts of wealth that is still floating around the system today. we've only seen a small amount of this unwound. we still have easy money and the gse's. fraud is as rampant as ever. but the investing public now realizes it's a bad time to be caught owning these mbs's without a seat when the music stops. so guess who owns it all now... all of us, at the gse's, at the fed, in the pension funds.
this **** is fractal and you're looking really close up, stand back and look at the larger picture and looking at the tiny amount a single piece of this inflated a bit of the bubble is ridiculous. that bubble's been inflating since 1913, and to keep it going your dollar has lost 99% of its value in that time. remember, systems like this work until they don't, and when they don't you realize that the 100 years of supposed prosperity wasn't worth the final cost.