When you hear people like Ben Bernake talk about the economy they are always telling the things that they think you want to hear. For most of us it works, but if you actually do some study on the issues you will realize that it's not true.
Obviously you know that Ben Bernake is the Chairman of the Federal Reserve Bank, at least if you ever watch a day of news in your life. He is also one of Obama's buddies, that explains the cheer leading that I refer to.
Reference: New York CNN Money News “
The economy lost some momentum recently, Ben Bernanke acknowledged Tuesday, but the Federal Reserve chairman is still optimistic that the recovery will pick up again in the second half of the year.”
If you like to hear the real facts you need to study what is going on here. First of all they are gauging the recovery based off of things that have happened in the past. That used to work until the housing market started getting creative with loans to the people buying that houses.
This is a little thing called Fannie Mae & Freddy Mack, these to two companies were built to help people who couldn't afford a house to buy one. Obviously the thinking was flawed in it's nature, but they didn't care they were making boat loads of cash for doing it.
They were giving sub prime loans on houses, and loans simply known as liar loans; on these loans people didn't even have to provide proof of income, or show that they had a job that would support the payments,and it backfired.
We all know what happened with this idea; when these people would first buy their houses they were worth a lot of money, and they were constantly gaining value, at a rate beyond which anybody had imagined, and the money rolled in.
But there were rough times ahead; in 2008 the housing market would crash, and when it did people would be berried in their homes, with a hose that was worth much much less then they owed. This would cause the banks to start foreclosing on the people that owned the homes.
Economic recovery 'close to faltering,' Ben Bernanke tells Congress, this is one of the first truths that this guy has ever told. There are cities that 80% of the home owners are under water, so it's time for some real truth here.
Definition of Sub Prime Loans: A type of loan that is offered at a rate above prime to individuals who do not qualify for prime rate loans. Quite often, subprime borrowers are often turned away from traditional lenders because of their low credit ratings or other factors that suggest that they have a reasonable chance of defaulting on the debt repayment. Learn more here
Definition of a Liar Loan: This type of loan was a loan where the banks didn't require any document to back what the borrowers were saying. So they could get away with murder when they bought a new home.
You can see where this is headed, in the end the housing market that was continually gaining in value would crash and take down the stock market with it. To stop the stock market from keeling over dead the Federal government would prop it up.
This was done by printing more money, and injecting in to the stock market; this would give a false indication that the markets were on the mend, and create more investor confidence in the markets. As we all know it hasn't worked, but you will never hear it from them.
Instead you will hear how they need to raise taxes to fix the problem. “Obviously not the correct answer during a recession” it's quite simple where they need to start, first of all they need to revise the current tax codes to fix our antiquated tax system.
But sorry this amounts to real work, and we all know that the Federal government doesn't want to work, they would rather fight and act like kids instead. You have just got to love the idiocy that we call the Federal government.
They need to help businesses to want to hire more people; here's the problem Obama would like to tax the very people who are creating jobs in this country by taxing people for making more then $250,000 per year, this will encompass almost every business in the country.
What they should do is own up to their mistakes and figure out a way to fix them without doing it off of the sweat of the people. No I am not a lover of the Wall Street people who helped cause this issue to happen, but by the same token it's not all of Wall Street that caused the problem, it's a few people.
I say make those people who caused the problems pay for their foolishness and leave the rest of Wall Street to do it's daily business. Wall Street is the engine that drives our country, and it should be left do do so.
In the United States was are capitalists, not socialists, or communists. It is not the fault of our system, or this country that this has happened, its the fault of a few misguided people who thought they could out smart the system and make a killing, well the system has issued a big “Got Ya” to these people.
So look for news in other places, read books or what ever you have to do, but you should always take what these people tell you with a grain of salt. You should be looking for ways to back o up your savings, and your retirement earnings.
Protect yourself because they will keep misleading you if it makes them look good. It's a game of spread the word, and if it's not the good word you smooth it over, and that is what Bernake the the Obama Horde does, and it's what they will keep doing.
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