Hey guys, my friend sent me this video and after watching it I was really impressed at how it showed the credit crisis in a simple, easy to understand manner. Check it out. The Crisis of Credit Visualized
realtors initiated for those prices to go up, as the work on a commission...the more I sell it for, the more I make...next thing you know, everyone is buying to resell later, and then you see people getting out of 2 bedroom apartment and buying a 3000-square foot house, and a mercedes S-class, when in reality they can barely afford a taurus... to stop crisis from growing - LOCK THE PRICES, they should NOT go up!
You can't lock house prices. Land is one of those assets that never depreciates because of inflation. House prices fluctuate according to market trends and the economy. The real issue was banks allowing every John Doe to buy a house without caring about credit checks. In fact, I knew of people in the states that would buy a million dollar house knowing they can barely afford to make house payments. These guys wouldn't buy furniture and would live with the bare minimum - just enough to make payments. They would make house payments for a couple months or maybe even a year and sell the house. During this time they would pocket any gains received from the value of the house increasing because it was just a booming market. With the new capital gains they would buy a more affordable house and live in it or re-invest it with a greater leverage.
First of all, I am a home owner myself, so saying that I don't want the value of it to increase would be stupid...on another hand, I don't want the value of it, nor any other house to increase by "$100k" because that's what been happening, that's were everybody just started to get rich, which started to cause inflation... by a certain percentage the value of a house should increase, but again, it shouldn't be growing to where out next generation has to work 7 jobs just to make house payments... exactly, you cannot. Over the period of time material that house is being made out of grows up in price, and so does a labor...and the land....but, houses shouldn't increase 20% in value annually, that's what causes inflation in a first place... the house I bought was after the market collapse, so I bought it for what it actually costs, without feeding all the fat pigs a large slice of pie... and BTW, I haven't invested a sigle penny in 401k plan (whatever my company contributes, that's it) as I DON'T trust someone else with my funds...
ahh I think I see what you mean now....You're saying that the government should regulate the growth rates of the houses which is different than the price. right?
that makes more sense, supercharged. Thanks for elaborating. I have however become more conservative lately and have issues with how involved the government gets. i mean, you say you don.t want anyone else in charge of your funds, but in the same breath say you want the government in charge of your funds as it applies to real estate.
the problem starts with your system of fractional reserve banking that has been put in place by a privately owned and run federal reserve fractional reserve banking allows any institution/bank to loan out up to 9 times what they have in holdings, so basically they lent out money that didnt exist to said people who wanted wine on a beer budget. And of course when it was time to for the fed to call in those loans the actual money to repay them didnt physically exist within the existing money system return the fed to the american government just as was in the original constitution and you're on your way to rebuilding your country this GFC, just like the great depression has been engineered by the people who control the supply of money
the rates, which will inflict those prices...and income check is a MUST! When everybody all of a sudden gets rich - inflation grows, everybody have that money, and now they are not worth anything... If I was to invest, I'd rather buy government bond, then invest in wall street...When someone/too many people get rich all of a sudden, I want the goverment to question it...instead, they were too busy counting income from all those taxes... on a top of federal reserve system banks wanted to make quick cash by giving away too many loans...kinda like a financial pyramid...all those loans should never exist in a first place...all goes back to federal reserve for issuing 1% loans... now nodody want to trust America, they all say we just print money that don't mean anything...
this should explain how the privately owned fed basically holds your country at ransom YouTube - The Fractional Reserve System
