… are doomed to repeat it.”  That’s how the axiom goes.  Well doesn’t this sound frighteningly familiar.

Back in the early 2000’s, as a strategy to “beef up” the economy, the Federal Reserve banking cartel continued flooding the economy with easy money in a move they called “quantitative easing”, or QE2.  They had done it once before with similar consequences.  The “member banks”, and any other banking industry operators who smelled blood in the water at that time, reduced the requirements for home loans drastically expanding the market with “new buyers” who could qualify for loans under new rules which drove up housing prices.  …And then it all fell apart.

Asset or Liability?Enabling people to purchase homes might sound like a positive on the surface, only the banks then bundled the resulting loans, many to people who ultimately proved unable to live up to the responsibilities of paying back the mortgages, and sold them off into the market (Wall Street) as CDOs (collateralized debt obligations).  When many of the underlying mortgage agreements were defaulted upon, people whose mutual funds invested in these toxic assets lost nearly half of their retirement savings when it all imploded in the housing bubble of 2008.  Many mutual fund managers had shifted retirement monies into these falsely rated assets allowing the banks to cash out, sell off the deceptively labeled assets at a profit for easy money, and the walked away from the mess they engineered with record executive bonuses and government bailouts of our tax-dollars.

Ten years later, we have reduced requirements for auto loans by the banking industry through pressure of the auto industry to move inventory.  Gee, what happens next?

Be sure to access the linked articles below to read the related stories:

“Junk In The Trunk” – Investors Get “Comfortable” With Subprime Auto Loan Bonds

For a bit more “crystal ball” level news, give Jim Rickards’ recent blog a look.  My favorite quote: “The three bears have returned home and Goldilocks has jumped out the window and fled into the forest.”

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