Did Fascist dreamers ever imagine our government owning 1/3 of the U.S. mortgage market?
Two trillion dollars of mortgage backed securities are now owned by the Federal Reserve.
I’ve been using the internet to keep an eye on real estate prices all across our nation since about 2016. After the Great Recession, U.S. real estate lost around 30% of its value. To stem that deflation, investors started buying and trading properties, increasing the property price each time. Since then, some markets have tripled their prices. Real estate values are inflated more than anyone would expect if you consider the declining number of Americans who can afford to buy a house because of insecure employment and falling wages.
The absence of bargains and the missing deflation after numerous foreclosures in real estate assets has happened because investors have purchased properties with low interest loans, treating America’s home portfolio as just another capital asset. They’ve done cosmetic improvements and resold that property at an inflated price: often double the price before improvements were made. The whole real estate market has been inflated into a bubble.
If you look at foreclosure real estate online, there’s a suggested price that is usually significantly higher than what should be expected for properties that sometimes need significant repairs. How can “As is” properties be sold at such a high price?
This seems like a crime to me. How can the American monetary system be used for low interest loans to investors AND be cycled into real estate mortgage backed securities in order to maintain those same high prices? Is it any wonder that there are so many homeless Americans? Property taxes are kept at higher rates because of this. Americans can’t get an affordable real estate price in this rigged market that ignores the market mechanisms of supply and demand. A real market, unlike our current real estate market, is affected by what people want and by what they can afford.
Shame on the Federal Reserve. It’s time to close it down. It’s time to make derivatives like mortgage backed securities illegal. It’s time to restore interest rates to around 5%, their historical average. Higher interest rates would end casino stock market gambling and allow people to save for retirement.
If you want to understand more about out-of-bounds actions by our government and how they have come about including banking deregulation, monetarism, corruption in the federal government, and how politics and economics act together to influence our opportunities in the United States, buy a copy of Political Catsup with Economy Fries available at Amazon.com.
Here’s the source citation on mortgage backed securities owned by the Federal Reserve: Mish Shedlock, The Street, http://www.thestreet.com/mishtalk/economics/the-fed-now-owns-nearly-one-third-of-all-us-mortgages, accessed 14 September 2020.