The Simple Truth

By Greg Hunter’s USAWatchdog.com

As I watch the News out of Washington today, I see the heads of our nation’s biggest banks being grilled in Congress on the causes of the economic problems we are facing.  None of those guys can say they are there because their bank is flush with cash and great investments.  The banks and the economy are in the shape they are in because of greedy incompetent bankers who paid lobbyists to erase all regulation to allow them to make reckless highly leveraged investments into toxic assets.  Now taxpayers are being asked to clean up the mess and pick up the tab. Many people are asking what is going to happen next?

One of my jobs as a journalist is to break things down so people can understand what is going on.  I don’t always hit the mark, but I can sure appreciate people who can do that task well.   What is going to happen next was brilliantly summed up recently by Martin Armstrong an investment pro.   He says, “We are headed into the debt tsunami that is of historical proportions unheard-of in history. Succinctness and clarity all rolled up into one sentence.  That is the simple truth.

A lot of that tsunami is coming from distressed homeowners facing resets of mortgage payments.  Last year while I was working for CNN, I asked a 76 year old woman whose mortgage was resetting to higher payments why in the world she agreed to an adjustable rate mortgage when she knew the resets would force her into foreclosure.  She told me the mortgage lender promised when the higher payments came she could simply refinance.  Multiply that logic by millions of Americans and you can see where the flood of bad debt is coming from.  The simple truth is best summed up by Richard Benson,” We got here because far too many loans were priced based on the probability of being refinanced and not the ability of being repaid! As long as liquidity was flowing, bad loans could be rolled over into bigger bad loans, but now the music has stopped for refinancing these loans.”

To address the economic crisis we are facing, the new Treasury Secretary Tim Geithner is proposing the taxpayer to commit up to a trillion dollars for the Fed to guarantee more illiquid loans.  He admitted to Brian Williams this week on CNBC he did not know how much money it would take to fix the financial problem.  Geithner has been widely criticized for announcing a “plan” this week with few details on how it would work.  I did not find the simple truth in anything Geithner said this week.  I just saw deep black water.

At the same time the bankers were being grilled to well done on Capitol Hill, the House and Senate were putting the final touches on a “stimulus bill” that is now headed for the President’s desk.  Susan Collins the Republican Senator from Maine was one of three who broke ranks with the GOP and negotiated a compromise with the Democrats.  She announced the bill was only “789 billion dollars” which was billions less that the House or Senate versions.  Then with a straight face, she said the bill was “fiscally responsible.”  Fiscally responsible is how the biggest single spending bill in history is characterized.  I hear water.

 

 

 

Please Support Our Direct Sponsors Below
Who Support The Truth Tellers

Discount Gold and Silver Trading Free Report

Satellite Phone Store

Dry Element

Ready Made Resources

Weston Scientific
Stay Connected
Advertise

Leave A Reply

Please Note: All comments are moderated and manually reviewed for spam. In turn, your comment may take up to 24 hours to be posted. USAWatchdog.com also reserves the right to edit comments for grammar and spelling errors.