muses of the moment

January 7, 2011

Who owns the right to the mortgage?

Filed under: Housing Market, US Government Debt — totallygroovygirlfriday @ 10:19 am

As the banks battle the true title of mortgages out in court, it is a moot point in the larger picture. Click here.

It is the debt. It must be restructured. The sensible thing to do would be to restructure the debt at the homeowner level, so they could stay in their homes. But that would make sense and deal with reality, which so far, has not been the choice of the administration.

The banks can transfer the debt to the US Treasury, Fannie and Freddie, the Fed, overseas banks, pension funds, it doesn’t matter. Transfer of the problem doesn’t solve this problem. Debt will be restructured one way or another. It is a systemic problem that will take down the banking system (and everything else) whether they hold the debt or not, if a plan is not in place to restructure the debt lower right now.

If you saddle your citizens with long-term debt they can never pay off, your economy will never truly grow in productivity and your banks will not be able to loan money and collect interest, which was their business model. As I said, this is a systemic problem with a very nasty negative feedback loop that is trying tell us the modify the debt.

Renaissance Weekend

Filed under: Peak Energy, The Federal Reserve, The Financial Crisis — totallygroovygirlfriday @ 1:45 am

Groovygirl is very concerned about Chris Martenson’s report about his observations at The Renaissance Weekend.

Click here.

The Renaissance Weekend has some very powerful and influential people in attendance. However, these people believe that money printing is working and more is needed. These are the people in power, this is what will happen.

Protect yourself. Hyperinflation will be a reality in the next 5 years.

In addition, these same people are completely unaware of peak oil and the inability for the US to meet social security and medicare obligations. There are no plans to handle these issues. We are looking at a long period of severe economic downturn from these two issues alone (even if we didn’t have the sovereign debt crisis looming ahead of us). Whatever “solution” occurs to the debt crisis, it may “solve” part of the future obligation issue (i.e. deflate it away and thus kill the programs without a political vote), but it will not solve the shortage of oil and its effect on economic activity.

The next 20 years do not look good at all.

You will have to fend for yourself. Be prepared.

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