Posted on 11/27/2021 1:09:58 PM PST by Browns Ultra Fan
I have written numerous times about nothing has been the same since the housing bubble burst and ensuing financial crisis of 2008. The crisis led to bank bailouts (TARP) and banking legislation (Dodd-Frank) giving The Federal Reserve even more power. And then the COVID lockdowns led to even MORE power for The Fed. And a horrid decline in money velocity (the ability of printing money to increase economic growth … or GDP).
But let’s take one step backwards. One the causes of the housing bubble that burst was President Clinton’s infamous National Homeownership Strategy that encouraged “partners” with the Federal government to soften underwriting standards for mortgage lending, particularly for minority households. The intent was to increase the homeownership rate in the US and it worked! Too well. Along with increasing the homeownership rate came rising home prices, culminating with home price growth reaching 14.5% YoY in September 2005. Only to start slowing to a crash.
M2, the broader definition of money, has not grown as rapidly as M1, but it still grew at an alarming rate. Atlanta Fed President Raphael Bostic blamed inflation on COVID but not The Fed’s insane money printing or government lockdowns. C’mon man!
Finally, the banking crisis (and TARP bailouts) along with COVID have made consumer purchasing power of King Dollar even worse.
Be careful of government strategies to make housing more “affordable” because they seem to make housing more expensive and can help crash the financial system.
(Excerpt) Read more at confoundedinterest.net ...
Traditional money velocity metrics are out the window with direct payments to the public and businesses, that completely bypass the banking system.
I think the entire global economy is a manipulated myth. The Central Banks just tell the story they want to tell.
Fannie and Freddy are said to be wanting to guarantee million dollar loans now.
Those who want to repeat the mistakes (on steroids) of the part are doomed to repeat them. / Captain Obvious
Bubble in 3 … 2 …
Well, my money seems to have gained a lot of velocity in the last coupla days ... it’s flying right out of my accounts :-/
History means nothing anymore.
Look for a simple explanation.
The velocity of money - I hear that money received by the descendants of slaves (code word for what you might think) is spent in less than 8 hours after it is received.
Maybe velocity of money has some other meaning.
Remember who was HUD Secretary, that was Cuomo.
It was Henry Cisneros, not Cuomo.
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