Take it for what you will, but Bob Chapman has said some of the following things on YouTube:
On 1/1/2010, all banks that have received TARP funds must report to the Fed how much they can pay back. The banks are working to restrict any commercial lending to about 25% what people ask for and expecting collateral up to 125%. There are 2,035 banks in danger of collapse in 2010, the cost to bailout about $800B to $1T, and the Fed wants to close as many banks as possible, and world government is coming. Rumor is the Fed is looking to close the FDIC by year end. (Have to doubt this…) The Fed wants to pull $1.5T out of the system by June 2010, which will collapse the economy, else face hyperinflation. This is why the Fed is looking for TARP bank paybacks. Top banks are being told to find a space for new currency, and the dollar will be devalued by the end of 2010, this Chapman claims is from a very high source in banking. Commercial real estate will implode, and Spring of 2011 will probably have a commercial real estate market worth 30 cents on the dollar. There will be a collapse in municipal bonds, public services reduced, higher crime rates. Over 50% of the homes in Las Vegas are worth less than what the home is mortgaged for. Investors are going to demand higher interest on risky investments, which will be the death nail to the real estate market. The gorilla in the room is China and Japan not buying U.S. debt anymore at the same rate, and the Fed won’t admit they’re now buying U.S. debt, while the government is demanding more and more money, and big corporations will be the only ones getting government credit, small businesses and people crowded out. Foreclosures in Atlanta has set new records, and adjustable rate mortgage resets will go into 2012, dumping more real estate on the market, Hawaii foreclosures up 81%. By mid-2012 to 2013, real estate is going to be headed for a bottom. A $300,000 house may be $90,000 by 2013, and the real estate market will go sideways for years subsequent, working off the inventories. Sovereign debt in 19 major countries is on the edge, and they’re likely to default. But you may be able to buy a home for a handful of gold coins, at the bottom of the real estate market. The shadow listings of homes on the market is 500% higher than the MLS listed properties in Los Angeles, many trying to sell without a realtor, including foreclosed properties. “What happens in California most always comes to a theater near you.” California is facing a $20B shortfall. Forty state governments are on the verge of bankruptcy. Bottom line, the dollar is dangerous, the debt is not payable, and people need to be in hard assets.
Ha Ha, you will find out that you are very fortunate tomorrow the earliest or next week when TGB drops to $4.5, today the market is distribute the shares. Well, I am out of this and may jump back again week after next.Market seems to be losing interest on the mining stocks , just look at the dollar
While I agree with some of what you point out, what would you suggest the avg. American do? Start building a bunker and stockpiling canned goods and firearms? Pull all cash out of the market, including IRAs and buy physical gold? Serious question.
It's such a hoot there are people confident the government won't make the same mistakes. They've done nothing but make mistakes. This whole mess was created by wrong-headed trade and monetary policies. It's like having confidence a doctor who botched a surgery and killed the patient can be counted on to resurrect the patient. It's amazing how dumbed-down we are, so many people in lala land and in denial.
I have the answers for all the problem you mentioned, unfortunately, I am not the treasury secetary or the Federal reserve chairman.
This recession is actually a depression, the U6 unemployment already hit 22%, which is the real unemployment rate, and this depression is even more serious than that of 1932, because this time, we have the debt problem.
As I said to lift up the real economy, Federal needs to continue pump the stock market till the wealth effect spread all over the place, and I bet it needs to take the DOW to 20000, because this recession is way too deep.
The deficit problem all caused by the real economy, as more than 20% of the working force did not pay tax, and 20% of the workforce pay min tax,and business pay less and less tax and fewer business pay tax, because they all bankrupt in this deep recession, sure, you are to have huge deficit , as people do not buy real estate or sell real estate, sure the state level will collect less property tax or tax from real estate gain. So, once DOW hits 20000 again, people will start to consume again, demand will pick up, business will start hiring, more people will work and start to pay tax again, and more new business will start up, so we should lift up the stock market and let the wealth effect spread all over the market.
As to the real estate crisis, the problem is the RMA reset , and piled up foeclosure which make the banks stop lending, because banks need to reserve a certain level of capitals, as the real estate continues to drop, it will eat up all the banks' capital reserve and banks will be back to crisis again, the root problem is the piled up foreclosure which pull down the price and no end of it. So what the government should do to reverse the real estate market so that banks will lend again to help the economy ?
1) Immediately issue an executive order to stop the reset of all the ARM mortgage loans, and freeze them permentally to whatever rate they are , this will stop further foreclosure immediately.
2) All the ARM mortgage loans which have been reset should be reversed to the level before the reset and freeze at there permanently. This will also reduce home owners's stress and stop foreclosure immediately.
3) Federal reserve should immediately expand its balance sheet to whatever level it is needed and seperate it into two different parts, one to absorb the new MBS( mortgage backed security) created recently from the buy and sell of real estates, and hold these healthy MBS as long as possible so that banks have the money to make loans and keep the mortgage interest low. The other part will be the toxic MBS , with which will buy the toxic assets from the banks , because these toxic assets can be healthy once the real estate market recovers , but only the Federal reserve has the money to buy them and the time to wait till the real estate market recovers
3) Stop foreclosure immediately, any home owners can not pay the mortgage, the banks should sell the MBS to the Federal, instead of foreclosing the homes. The home owners can still live in the home and pay whatever they can pay. Once the home owners can stand on iits feet again as the economy recovers, the home owners will start paying the normal monthly payment again and get his home back.
5) As the economy recovers and the housing market rebounds, Federal should release the MBS( by that time as real estate price climb again, all the toxic MBS will turn to be healthy again) to the private investors in a very very slow pace so that it will not compete with the banks for private investors.
Federal reserve will eventually make money out of this program, just like the TARP.
Unfortunately I am not the Federal reserve chairman or the treasury secretary.
A lot of people built strip malls in stupid places. Financing was easy and you could pay yourself. There are lots of new stripmalls sitting empty. But the well located class A properties are still getting near same rents and sales prices. The money making properties are still money making. The stupid stuff is taking down their stupid owners. In this economy, more than ever-- a top location is key to making a business successful.
The banks that financed the stupid stuff are taking them back, but they still sit empty. If the banks have too many non-performing loans the FDIC takes them over and sells off their assets to other healthier banks, auctioning off their properties and stiffing their shareholders.
I can't tell you how profoundly I disagree with all that Edw-.
Treasury and the Fed did make the Banks accept billions in late 2008. Stimulus would not be a waste if they built stuff with the money spent. That would get people working making decent wages and supporting their families while creating assets for out country. Not just hand it out to financial institutions. They talked about 'shovel ready' projects-- but very little went into actual projects like roads, bridges, buildings. A lot has gone into 'green' energy research, which is a waste in my opinion.
Ramping up the Dow to 20000 would be like buying so many tulips. (if you don't understand, look up tulip speculation in Holland in 17th century) A ramped up Dow by artificial means would eventually crash.
All this Bank stuff was done, imo to save Citi Bank. JPM, WF, BAC were going to be fine without it, but C would have failed. They forced the other banks to take a bite so it would not look like it was done specifically for C.
The equity market failed because the House market failed before it. CDO's, Credit default swaps, sub-prime mortgages, Fannie and Freddie-- all that stuff pumped money into the economy from 2000 to 2008. People used their homes like ATM's and they bot SUVs, took trips, speculated in more RE, refi'd and got more cash, mortgage guys made big bucks=-- it was all spent which bouyed the consumer economy and made lots of money for everyone, while it lasted.
We really lived well in the last decade. Now we have to pay the piper.
"DOW hits 20000, everyone makes money and start spending again, creat huge demand and business starts hiring again. By that time institutions can pay back the TARP money with interest to the government, and everyone is happy."
Bakers, especially, selling $10 a loaf white bread. Yippee! DOW 20,000! I'm rich! Eh... what do you mean, $20 for that latte?!
Actually, I don't disagree with what you're saying at all. That the dollar will lose by about half is perfectly understandable, that we're on the course of the British empire beyond question. This is the way it would play out, under normal circumstances, and I hope you're right. But I just think 2008 was a huge wakeup call at how fast and how badly things can go awry, and rose colored glasses are no longer in style for a thinking person. What happened in 2008 is a 1929 magnitude event, and, before this, while we're on the subject, oil and gold have behaved the way they are, not for supply and demand, but for the dollar being debased. That debasement is in the soup, now, bigtime, and you're going to have to argue a lot harder there's any free lunch and “this too shall pass.” You ought to know, according to experts, there's no end in sight of the real estate problem, into 2012, just for mortgage resets, job losses continuing, and commercial real estate is the next shoe to drop. Looked at all the strip malls, lately? To see this as a normal recession is to ignore some very hard and intractable realities, not seen in our lifetimes. Somebody is going to have to stop digging the ditch, for anybody to contemplate getting out of it. So far, the jobs aren't there, the credit isn't there, and, if it were, inflation would roar. When backed up against the wall, Ben and Timmy won't even comment, because they have no answers.