US Subprime Mortgage Industry - The Greatest Economic Tragedy Under-told

Everyone acts surprise at the slightest negative news regarding the sub-prime mortgage industry "crisis". What Einstein truly believed that giving someone who had no legitimate or recorded means to pay for a $100,000 home a loan for not only $100,000, but requiring them to pay increasing monthly payments via Adjustable Rate Mortgages.

The mortgage and real estate industries saw their membership swell and profits soar. Some buyers needing another shot at getting their own home took advantage of the opportunity. Life was good for all. Investors bought homes like they weren't going to be anymore built with little or none of their own money at risk. Economics 101 tells us that a negative plus a positive can only equal a negative. You can not keep putting up good money for no or negative return and expect a positive return. This just took a while to become a front page headline.

But I think this is systemic of what has become the new American way to highlight the flash and the dream, while ignore the substance and the reality. We have become a nation conditioned of a "me first" mentality, to have a sound-bite attention and memory span, and we do not want to hear anything that may involve less than joyous or painless feelings. The Media displays images of people with American Express Credit Cards living the "good life", never showing them when that bill comes due. It happily shows the picture of person's joy who wins the lottery when living in a double wide, but rarely shows that person 4 months later when he is broke and have no friends and their family won't speak to him. As well the Media blasts images of people with 6-pack abdominals and Adonis bodies to sell a pill, yet don't mention that it takes a healthy diet and a religion of exercise that may require sweat and aches. We have become a nation that demands that our vegetables have sugar on it so as not to have to taste their natural bitterness. Many do without vegetables all together. We demand foods that our "sugarless", yet sweetened with chemicals made in a lab, i.e., nutra-sweet and Splenda. And still demand a healthy body. Maddening!

Unfortunately, this new "crisis" of the week is just the tip of that iceberg facing the USA Titanic. And many of the passengers are below deck high on happy juice and blasting their i-pods listening to "Don't Worry, Be Happy".

The greatest nation ever established based on self-government, individual freedom and responsibility, and national independence and sovereignty, is facing it's gravest days. This mortgage crisis comes at the worst possible moment, because it comes not alone. This mortgage crisis comes at a time when the US Dollar has lost greater than 90% of it's purchasing power since 1913, our nation has an unsustainable trade imbalance, in particularly with a sworn adversary - Communist China -, a perpetual military police action in Iraq that has currently cost the US taxpayers well over $4.5 Billion alone, evading hoards of low-skilled and low-educated illegal immigrants who are exhausting our social services, a looming boom of elderly citizens retiring and in need of social assistance, a vanishing manufacturing & producing capability, and well paying entry-level labor positions, average Americans living pay check-to-pay check with little or nothing in the bank, and middle-class wages that are either stagnant or on a steep decline. Couple this with a majority of the populace totally disengaged with politics, absorbed in me-ism and religious secularism, and completely devoid of the rugged individual identity and self-reliance that our Fathers and our parents of the '20's and '60's had during their challenging times. And I have not even mentioned the mess that the country faces if the Bush tax cuts aren't made permanent by 2010 to avoid tax levels from returning to prior cute levels. Thus, creating the largest tax increase in US history. This is not just an ol' one, two punch. This is a Sugar Ray Leonard combination of blows that may leave us out for the count.

The extreme liquidity in the mortgage industry was created to create the "soft landing" that, the then Federal Reserve Chairman; Allen Greenspan spoke of to escape the recession in early 2000's. But, what it succeeded in doing was to encourage cash-strapped US Citizens to dig money out of the only appreciating asset that many of them possessed their homes. Unlike in the past US economic crisis', this one has been founded on credit - not real wealth. The game of economic musical chairs that the US has entered America since the abolishment of a metal-based (gold and silver) monetary system, in the Nixon Administration, has nearly left us with one or two chairs in the room and the beat is quickening. What the Fed created was a country awashed with credit, via the extraordinary low interest rates, and a populace with the illusion of "new found" wealth, via their home's equity. It was like giving a 7 year old key to the candy store unsupervised, and expecting that there won't be sever negative health consequences. The Fed's actions produced a time bomb environment with offering nearly zero interest rates on borrowed money, dramatically reduced qualifications and terms for borrowers who would not qualify normally, which produced extraordinary demand for homes. As a result, homeowners thought that they had discovered an oil well that ran through the faucets in their homes. With the explosion of home prices throughout the nation, homeowners went rushing off to refinance, removing money [equity] from their homes in unprecedented numbers.

Times before, homeowners have been considered house-rich and cash-poor, but today too many can be classified as house-poor and cash-poor. And with over $3 Trilliion worth of ARMs entering adjustment periods, they may become out of both.

The worsening US trade imbalance has reached heights never before seen. As the Media works overtime to not alert the domestic populace, the international investors, as well as some Congressmen, see all too clearly the great cliff that awaits this nation's financial solvency if the situation is not corrected, and fast. Thanks to the incredibly American disadvantageous trade agreements, a.k.a., treaties, the United States government has watched the fabric of America nearly obliterated like no foreign enemy could have dreamt. Every productive sector of the American economy and industry has been critically affected, some fatally. Unlike economic depressions of the past when Americans could look to build, create, and manufacture our way out the crisis, today we have no manufacturing base to create anything and most materials that would be needed would have to be imported at high currency exchange value rates. The North American Free Trade Agreement [NAFTA], the Central America Free Trade Agreement [CAFTA], and the many other "fast-tracked" trade agreements that have been rammed through the Congress by the past two Administrations, has brought about never before seen lost of jobs, infrastructure, industry, and produce and farm produciblity. This has removed many well paying entry-level jobs from the landscape of American society to be replaced with questions, like "Would you like that supersized?" For the first in generations, America is a net importer of food, and every other basic need item from fabrics to high technology.

Now with the sub-prime mortgage collapsing with greater than $3 Trillion a ARMs set to adjust upwards, thereby driving many homeowners into foreclosure and or bankruptcy, the American people have to endure consequences of not being able to produce anything useful for the world, except spend ourselves into further debt, we are faced with a haymaker right-cross to the temples - as flood a low-skill and low-educated foreigners enter the country. The Administration's version of, "if you [the American people] won't give me permission to did what I want to do, I'm gonna do it anyway - cause I can." The invasion of illegal immigrants, particularly those from Mexico, have cost the US economy more than $500 Billion since 1996. And that figure does not include the ramifications of a 20% decline in the nation's wages, the cost of the expected 9 Million American workers that they have displaced, the cost of their non-produciblity when they can't or chooses not to find work, nor the cost of the lives of innocent Americans that they have killed, particularly while Driving Under the Influence of alcohol or drugs.

Oh but wait, it gets better - for the worst. The Bush Administration is thrusting the United States of America not to be a greater sovereign and financially independent nation of wealth, but one that is dependant on everyone for everything, particularly with Communist China. The Administration has been, and is, determined to vanquish America's borders - economically and geographically - via not only his version of "free-trade", but directly eliminating America's borders with the North American Union [NAU] by way of the Security, Prosperity Partnership [SPP]. The NAU will create an economic society like the European Union that establishes layers of new bureaucracies and suppresses all prior governmental jurisdictions and customs. In short, if this union is permitted to be established, it would mean the end of our Constitutional Republic. This Administration has already initiated the process with nearly 4 high-level meetings with Mexican and Canadian politicians, international financiers, and the biggest names of commerce and business. Non of the country leaders, particular Mr. Bush, has brought the proposal to the people or the elected representatives. The Administration is in the process of opening the roads of the US and the frontiers of America to hundreds of un-Federally regulated, low- skilled, low- cost, and unsupervised Mexican trucks and truckers and the creating the Texas Trans Corridor [the NAFTA Highway], which includes a proposed Mexican-controlled checkpoint within the US, which will all work not to create export of US goods, increase American wages, nor to create America as a place for the world to invest, but to import foreign goods, export of American jobs, and establish America as no longer a sovereign country, but a place like a town that you may go through to get to a city.

This power keg has come about due to the fact there was NO real money being produced - it was ALL created by creating more credit, more debt. The real income of American households either was stagnant or declining. At the same time the Media, the government, and everyone's cousin and bubba next door has been encouraging buying things when not having the means to pay for it, i.e., credit. It goes deeper that just the current mortgage crisis. It goes to the way that we have been conditioned and programmed to see receiving goods and or services today, for the sake of luxury or convenience, and paying for it sometime in the future, if ever, as a way of life. But, we can turn this ship away from the iceberg still. We must reprogram ourselves to only buy things that we can afford or can pay off in short fashion, so that we can become financially stable nation. 1) We must get the United States currency back on a standard and measured metallic system, as Constitutionally mandated, so as reduce or eliminate drastic economic inflations and deflations. 2) We must demand that the US government only involve the children of America in military conflicts that are an imminent or direct threat to America or the Constitution only, not the United Nations. 3) We must establish a flat or national sales tax system that rewards savings and investments, as well as encourage foreign investments. 4) We must reinstate the nationalistic philosophy of Alexander Hamilton that when it comes to trade stated, "Not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufactures...Every nation ought to endeavor to posses within itself all the essentials of a national supply. These comprise the means of subsistence, habitation, clothing and defense...", so as that we will always posses the ability to fend for ourselves as national security principle. 5) Also, we must develop our natural resources that are within our nation's borders like Norway, Russia, Canada, and Niger has to become economically independent. 6) Above all, for the sake of national cohesion, we must insist that all who wish to immigrate must do so to gather under one flag, American, one language, English, and one Law, our Constitution. We have all of this within our capabilities. We don't have currently the leadership from the Federal Seat. But, if this Republic is to survive we must change course. It is a matter national survival.