Ready or not, QE3 is here, and the long-term effects of this reckless money printing by the Federal Reserve are going to be absolutely nightmarish. The Federal Reserve is hoping that buying $40 billion worth of mortgage-backed securities per month will spur more lending and more economic activity. But that didn’t happen with either QE1 or QE2. Both times the banks just sat on most of the extra money. As I pointed out the other day, U.S. banks are already sitting on $1.6 trillion in excess reserves. So will pumping them up with more cash suddenly make them decide to start lending? Of course not. In addition, QE3 is not likely to produce many additional jobs. As I showed in a previous article, the employment level did not jump up as a result of either QE1 or QE2. So why will this time be different? But what did happen under both QE1 and QE2 is that a lot of the money ended up pumping up the financial markets. So once again we should see stock prices go up (at least in the short-term) and commodities such as gold, silver, food and oil should also rise. But that also means that average American families will be paying more for the basic necessities that they buy on a regular basis. The most dangerous aspect of QE3, however, is what it is going to do to the U.S. dollar. Most of the rest of the world uses the U.S. dollar to conduct international trade, and by choosing to recklessly print money Ben Bernanke is severely damaging international confidence in our currency. If at some point the rest of the world rejects the dollar and no longer wants to use it as a reserve currency we are going to be facing a crisis unlike anything we have ever seen before. The real debate about QE3 should not be about whether or not it will help the economy a little bit in the short-term. Rather, everyone should be talking about the long-term implications and about how QE3 is going to accelerate the destruction of the dollar. (Read More...)
Mortgage
16 Reasons To Feel Really Depressed About The Direction That The Economy Is Headed
If you do not want to feel really depressed, you might not want to read this article. The U.S. economy is coming apart at the seams, and there are a whole lot of indications that things are about to get even worse. After a time of relative stability, the pace of job cuts is starting to pick up again, inflation is rising but paychecks are not, the U.S. housing crisis shows no signs of ending, millions of American families are drowning in debt and all of the recent polls show that the faith of the American people in our economy is eroding. As you read the statistics in this article, try to keep in mind that there are scores of families from coast to coast that are barely surviving from month to month. It can be a soul-crushing experience to work as hard as you can and yet just barely be able to pay the mortgage and put food into the mouths of your kids. The reason why so many Americans believe that we are in a “recession” or a “depression” is because that is what they feel like they are living through every single day. (Read More...)
35 Statistics That Show The Average American Family Has Been Broke Down, Tore Down, Beat Down, Busted And Disgusted By This Economy
The economic statistics that you are about to read are incredibly shocking, but they are also very, very real. Tonight there are going to be millions of men and women all across America that cannot sleep because they are consumed with anxiety about their financial problems. Even as you read this, there are a lot of parents out there that are trying to figure out how to explain to their children why their homes are being taken away. There are also hordes of very hard working Americans that are incredibly frustrated because they have sent out thousands of resumes and yet they can’t seem to get a job interview. Have you ever been at a point where you couldn’t pay the mortgage or put food on the table for your family? It can be an absolutely soul-crushing experience. In fact, there are some cities in the U.S. that have been so utterly devastated by this economy that it seems as though virtually everyone has had the hope sucked right out of them. The mainstream media is trying to convince all of us that we are in an economic recovery, but that is a lie. The truth is that we are in the middle of a long-term economic decline and the greatest economy in the history of the world is dying right in front of our eyes. (Read More...)
27 Amazing Statistics About The Real Estate Crash That Never Seems To End: More Foreclosures, More Underwater Mortgages And More Home Price Declines
The real estate crash that never seems to end appears to be getting even worse. Home prices continue to go down, the number of underwater mortgages is soaring and the number of foreclosures set an all-time record in 2010. The peak of the housing market was in 2005 and the subprime mortgage crisis erupted in 2008. Shouldn’t things be getting better by now? How many years is this real estate crash going to go on for? Home builders and those that work in the construction industry are deeply suffering because new home sales continue to hover around record lows. Mortgage professionals are having a really hard time because very few people are seeking home loans and many of those that are seeking loans cannot get approved. Real estate agents all over the country are pulling their hair out in frustration and large numbers of them have left the industry completely. The United States has never had such a prolonged real estate slump in the post-World War 2 era. Unfortunately, there are a whole lot of indications that the real estate crash is going to get even worse. (Read More...)
Saving Money? Not In This Economy – 22 Facts That Prove Middle Class Families Are Being Savagely Crushed
The 22 facts that you are about to read are all real, although admittedly they are hard to believe. The sad truth is that millions of middle class families in the United States today are being savagely crushed by this economy. Most American families would like to be saving money, paying the mortgage and living the American Dream, but with each passing month those things are becoming more difficult. Rapidly rising prices for basic necessities such as food and gas are absolutely crippling the finances of millions of middle class American families right now. How is a family even supposed to make a budget when the average price of gasoline goes up 42 cents a gallon in a single month? What are we all supposed to do when we walk into our supermarkets and find that the old “regular prices” have become the new “sale prices”? Should we all not be deeply concerned that the price of food in the United States went up at the fastest rate in 36 years last month? How are we all supposed to keep our families above the poverty line when the number of good paying jobs keeps shrinking? In America today, being a member of the middle class is like playing a game of musical chairs. You know that they are going to keep pulling chairs out of the game, and you just hope that it is not going to be your turn next. (Read More...)
Is Sarah Palin’s Political Career Almost Over?
In the United States today, perhaps only Barack Obama is more of a polarizing political figure than Sarah Palin is. When it comes to Sarah Palin, the vast majority of Americans seem to either absolutely love her or absolutely hate her. Unfortunately, the number of Americans that can’t stand her seems to be increasing, and this is really bad news for Palin as she considers making a run for the White House in 2012. A staggering 59 percent of the respondents to a recent Washington Post/ABC News poll said that they would not even consider voting for Sarah Palin in 2012. The same poll found that just 8 percent of registered voters said that they would “definitely” vote for Palin and 31 percent of registered voters said that they would possibly consider voting for Palin. Those are really, really dismal numbers. Sarah Palin has tried to cast herself as the leader of the Tea Party movement, but right now it is just not working. In fact, it seems that Palin can’t do much of anything right lately. At one time Sarah Palin was considered the clear front-runner for the Republican nomination in 2012, but now all that is ancient history. (Read More...)
Will 2011 Be A Nightmarish Year For The U.S. Housing Market?
As we come to the end of 2010, there seems to be very few reasons to be optimistic about the U.S. housing market as we enter 2011. Home prices have fallen for several months in a row, mortgage rates are going up, mortgage delinquencies are increasing again, the mortgage industry is mired in horrific legal problems and the underlying economy is still extremely sluggish. During 2009 and throughout the first half of 2010 the U.S. housing market experienced a time of stabilization and it looked like the housing industry might recover, but when the tax breaks expired things started to get bad once again. Now many analysts are publicly using the term “double-dip” when speaking about prospects for the U.S. housing market in 2011. (Read More...)
Home Sales Drop Once Again
Existing home sales in the U.S. are down again. New home sales in the U.S. are down again. What else is new? The U.S. housing industry just cannot seem to bounce back. Mortgage lenders have really, really tightened up lending standards and so now there are a lot fewer qualified buyers than there used to be. It is as if the big financial institutions have nearly shut off the flow of credit. But without credit, the vast majority of American families don’t have a prayer of achieving the American Dream of owning a home. Even with mortgage rates close to record lows the housing market is still languishing. Unfortunately, it doesn’t matter how low mortgage rates are if American families can’t get home loans approved. With unemployment still staggeringly high and with incomes still declining, it appears that the U.S. housing market is going to continue to suffer for some time to come. (Read More...)