Thursday, October 15, 2009

This is called "Letting you money ride"........

In inflationary times you borrow to the hilt and pay back with cheaper dollars. Today is "not " inflationary, yet. Now you save and payoff debt. Maximize your credit score by paying small debts on time. Get ready to borrow big and often to stay ahead of the tidal wave of inflation. We ain't seen nothing yet.

 Every inflationary boom has it's bust. Every deflationary period has it's boom. Then inflation again. No government with a printing press can resist. Especially ours.

 We vote. We have guns,

Any questions?

The American Conservative -- No Easy Money
This “free money” phenomenon is also dangerous for homebuyers. Now that the loose lenders Fannie Mae and Freddie Mac have been throttled by insolvency, the central planners are expanding operations at the two remaining state lenders: FHA and Ginnie Mae. Get your guaranteed mortgage with 3.5 percent down right here! While that is marginally better than zero, it sure isn’t 20 percent. In other words, the same old game of low downpayments and easy mortgage money is being played, sweetened by an $8,000 credit for new homebuyers. No wonder housing is “recovering.”

Is risk being properly priced when money is cheap and new loans are practically given away? Of course it isn’t. Eventually, the global bond market will become uneasy about the government game of printing money to buy its own debt and the purposeful injection of nearly free money.

Supply and demand still matter. According to analysts, global governments are borrowing $5 trillion this year to fund their vast stimulus packages. Then there’s private-sector demand for business loans, mortgages, consumer credit, local government bond issues, and so on. Considering that some $35 trillion in global wealth has vanished in the past two years and corporate profitability has plummeted, it’s fair to ask what happens if there’s not enough global surplus capital to fund the explosion of public demand for borrowing.

No comments: