Saturday, October 13, 2012

America’s Financial Collapse Part 2 – Your Mortgage

What are the banks going to do with the $40 Billion that the Federal Reserve is printing from thin air and buying mortgage backed securities with?

-Will the banks use this money they receive from the Federal Reserve to help the real estate market? No. -Will it be used to help the economy? No.
-Will it help bring us out of this recession? No.

The banks have already made a back room deal to use the money to purchase treasuries, which pays the interest on the national debt. So that money will be given to China and whatever other country we owe money to. None of it will be reinvested into our economy. It’s all going overseas. It gets better...
Now that the Federal Reserve owns all these mortgages (maybe even yours), what will they do with them? They’re going to invest them in the derivatives market. Hold on. This sounds confusing, but I’m going to explain it in a way that makes it easy to understand. 

As I understand it (and to put it simply), it means the Federal Reserve is going to sell your mortgage to other entities all over the world in order to make money. So they buy the mortgages from the banks and then sell them for a profit. Remember, the Federal Reserve is not part of our federal government. It’s a private organization made up of several large banks, so the money they make doesn't come to the US government, it goes to them! Again, the money is not being reinvested into our economy. 

If you think it’s difficult to deal with your bank now, wait until you have to deal with a bank in China or India or wherever your mortgage ends up. And remember, the money the Federal Reserve is printing to purchase these mortgage backed securities is weakening the dollar, so every month, as the printing presses are turned on to print up another $40 Billion, our currency gets weaker and prices go up, but don’t worry, the Federal Reserve is getting richer by the day and smiling all the way to the bank… that they own.

The real kicker is that most people don’t know that QE3 Unlimited actually costs $85 Billion per month. $40 Billion goes to the banks and another $45 Billion is spent in other ways. So in actuality, $85 Billion is being printed out of thin air every month. How much is that per year? Just over $1 Trillion. Will we see any of that money? LOL!

So the next time someone from the White House praises QE3 Unlimited, remember… it’s doing nothing to bring this country any economic relief. The only one making any money off of this horrendous situation is the Federal Reserve. All QE3 Unlimited is doing is buying us a little extra time before we economically implode. 

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