[grabby]

Nice artticle but Aliens returnijng their stashed dollars[/url]spreding a bit more angst.

Aliens returnijng their stashed dollars

Interestingly it says there is someone deciding to cash in their dollars.

“Ownit may have been the canary in the coal mine.”

[alecifel]

That doesn't really come as a big suprise. Housing is in a rut, as we all knew it would be when people started borrowing at 125% back in the 90's. Energy crisis or not, those kinds of price balloons just don't float forever. So now we enter higher costs of commuting, plus the fact that suburbanites are commuting twice as far as they were in the 70's, and what do we get? A high foreclosure rate on mortgages. No shock there.

So the market for repacked mortgages in B or less paper categories isn't such a hot thing for investors. They'd rather get the government backed Fannie Mae paper at less than 2%, but (supposedly) it's a lot safer.

The problem with that of course, is that those papers ARE backed by the U.S. Government, which right now is starting to look (economically) like a bum in a tux. (I'll gladly pay you Wednesday, for a hamburger today.)

What's the end result of all these foreclosures? Lyndon LaRouche has (despite some of his looney ideas) done a lot of digging on how Fannie Mae and the Fed conspired in the 80's to back the USD with American real estate in order to keep the S&L collapse from crashing the whole economy. Yes, folks, your greenback is backed by the value of your home. So when there's a slump in real estate, guess what? There's a slump in the backing of our money.



"The Chinese have many hells. This one is the hell of valueless currency. No, wait... this is Zimbabwe!" -- Jay Albertson