Why are rates so low and home prices so high?

in hive-144703 •  4 years ago 

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For somebody with knowledge in finance and economics to say "The Greatest Economy Ever", they are either ignorant or devious. I believe the latter and I'm sure Edward Snowden and Julian Assange would agree.

What recovery we did have from the Great Recession was as some economists called, anemic. As you will see, it was surely fueled by greater and greater debt as four phases of quantitative easing (QE) and other purchase vehicles were rolled out by the Federal Reserve Bank. In late 2019 yields in the Repo market spikes forcing the Federal Reserve to intervein in the overnight lending market in addition to having bailed out the Mortgage and Treasury markets through the QEs.

Why do you think mortgage rates are so low? The Federal Reserve Bank (FRB) is buying the paper Mortgage Back Securities) (MBSs) from the Government-owned conduits of FNMA and Freddie Mac and the Government is buying the VA and FHA mortgages.

So, where is the FED and Federal Government getting the money? The Bankers at the FRB are literally typing the amount needed into their computers as an asset on their balance sheet and and using it as money to buy the assets. The Two assets they have been buying since the Great Recession are the forementioned MBSs, but also U.S. Treasuries issued by the Federal Government. The Federal Government is also literally digitally typing, thereby creating U.S. Treasuries on their computer and selling them to the FRB who created the money out of thin air to buy them. Of course, if you or any other entity, except the Federal Reserve and Government, did this, they would be arrested for counterfeiting. The FRB and Government have long ago run out of real money to pay for the things they do and purchase. In economics, it is being called "Monetizing" the debt and in it is simply printing money as if a computer printer or printing press was used.

As of August 26, 2020, the FRB balance sheet was at $6,975,315,000.00. With another $25 billion, which they have probably already spent, as of the morning August 28, I'm writing this, they will have topped the $7 trillion mark and with the Federal Government's Budget Deficit at $27 trillion, that's $34 trillion in total debt, the highest debtor nation ever in world history. The "Annual" Federal Budget this year alone is on track to top $4 trillion. The increase in total FRB and Federal Government debt since the Great Recession is 294%, the Greatest Economy Ever?

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