Tuesday September 3, 2002 Market WrapUp
Puplava <------ recently endorsed by both Jim Wooly CB and SOROS as one of the greatest economic commentators having currently deigned to draw human breath
------- commentary courtesy of 4figAu on A-Z Junior Mining Research thread:
OPEN QUOTE:
God bless the American consumer. For without them, the U.S. economy and
other economies around the world would be in deep trouble. The willingness
of the American consumer to go deeper into debt to maintain personal
consumption has surprised even the most optimistic economists on Wall
Street. With mortgage rates at record lows, and the advent of no-points
mortgages, the consumer has been able to tap a deep well of money made
available by Greenspan’s latest bubble: the mortgage and housing market.
With the banking system flooded with fresh money and GSE’s able to tap the
securities markets as money roles into bond funds, the supply of new credit is
becoming endless. With interest-only loans, second mortgages at 125% of
the value of home, and adjustable-rate mortgages, the ability to extract equity
out of a home has created a Fed-induced consumer money machine.
The result is that the consumer goes deeper into debt and keeps his
payments the same. It is the next best thing to printing money. Up until this
time, printing money has been only a central banking and government
privilege. However, with the Fed lowering interest rates and flooding the
banking system with money, the common folk have been let in on what was
once the providence of central bankers. That is the great thing about American credit -- it has now become freely available to all, regardless of one’s financial status. With the modernization of the credit application process, we now have “Don’t ask / Don’t tell” loans where income or assets don’t have to be disclosed. Having a job may not be necessary, or for that matter, having any assets at all. Is this a great country or what?
The net result of this ocean of credit, despite difficult financial times, is the
fact that the consumer has been able to increase his standard of living by
going deeper into debt without increasing his payments, thanks to lower
interest rates.
END QUOTE
I find it fascinating Puplava can say the same thing I was pointing out in your particular brand of "home mortgage lending practices/-economic disaster du jour," and yet you do not have squat to say about it, nor attack either his person nor his views.
Wonder why! |
