There must be a pony here someplace
K.B. Thomas Jr. - Emporia
Wednesday, June 4, 2008
IN NOVEMBER 1999, the Financial Services Modernization Act was passed by Congress. This bill allowed commercial and investment banks to merge and this brought on the creation of massive financial institutions like Citigroup, which functions as one-stop brokerage house, bank, credit and vendor and insurance company.
It’s my opinion the repeal of the Glass-Steagall Act in 1999 was the firetrap that flamed the greed that led to the most destructive mortgage bubble the world has ever known.
The reason the Glass-Steagall Act was passed in 1933 after the stock market crash was to counter greed and corruption in the market. This bill prevented banks from dabbling in investment schemes.
As of yet, no one has advanced the idea of rolling back the “reforms,” which are at the heart of the corruption that has befuddled the market.
The real cure for our current economic difficulties is the establishment of a monetary system based on gold. However, I don’t believe this will happen in my lifetime.
The real culprit for the mess is the Fed’s expansionist (inflationary) monetary policy. This has created an artificial economic boom.
People on fixed incomes are really getting hurt. I think real inflation is about 17 percent.
Another result of Alan Greenspan’s monetary policy is the decline in the purchasing power of the American dollar in relation to other world currencies.
Loose regulations and the Fed’s expansionist inflationary policies add up to an insane disaster for the entire world.
A growing concern for me and real estate brokers all over America is that borrowers are paying artificially low rates on their loans — because many banks, according to an article in the Wall Street Journal, are possibly fibbing, because they don’t want the public to know that they are desperate for cash. I believe our local banks are in good shape but now is the time to get a low cost fixed rate loan.
When interest rates were 12 percent and as high as 18 percent in the 1980s, I accurately forecasted a fixed rate of below 6 percent. Lots of people said I was crazy. Now I’m saying within seven years rates will be 18 percent to stop inflation. Just the other day two economists at the bank for international settlements, a sort of central bank for central bankers, expressed worry that some banks might be reporting inaccurate information.
The global financial crisis that began last summer is making it hard for banks to package and sell all kinds of loans as securities, as well as to issue bonds and short-term loans to investors.
Now is the time to rid yourself of all adjustable rate loans. If you are unable to get a fixed rate loan, then you must sell or face future rates as high as 18 percent.
The Iraq war will lead to the same kind of inflation that the Vietnam war brought to us along with high interest rates.
I wish someone would write a book exposing the evil, vicious lowlifes who control our government for their self-interest and the willing puppets who do as they are told.
According to the American Free Press, in fiscal 1999, the Department of Defense reported 1.3 trillion of “undocumented” adjustments to balance its books. Where did the money go? In fiscal 2000, the figure was 1.1 trillion. For fiscal 2002, the Department of Defense refused to name a figure. This makes the 168 billion dollar stimulus package a big joke. If we can find all those trillions of dollars that are missing, then maybe our currency will become more stable on the world market.
Right now European businesses don’t want the Federal Reserve’s notes because by the time they cash them they are worth less than when the original transaction took place.
Despite all this bad news, the best time to buy real estate is on the negative and the best time to sell is on the positive.
I am an incurable optimist. I feel like the boy in the horse barn who said, “With all this manure there has to be a pony someplace.”
K.B. Thomas Jr. is a real estate agent in Emporia and owner of American Real Estate.