WARPED, DISTORTED, MANIPULATED, FLIPPED HOUSING MARKET

 

The report from RealtyTrac last week proves beyond the shadow of a doubt the supposed housing market recovery is a complete and utter fraud. The corporate mainstream media did their usual spin job on the report by focusing on the fact foreclosure starts in 2013 were the lowest since 2007. Focusing on this meaningless fact (because the Too Big To Trust Wall Street Criminal Banks have delayed foreclosure starts as part of their conspiracy to keep prices rising) is supposed to convince the willfully ignorant masses the housing market is back to normal. It’s always the best time to buy!!!

The talking heads reading their teleprompter propaganda machines failed to mention that distressed sales (short sales & foreclosure sales) rose to a three year high of 16.2% of all U.S. residential sales, up from 14.5% in 2012. The economy has been supposedly advancing for over four years and sales of distressed homes are at 16.2% and rising. The bubble headed bimbos on CNBC don’t find it worthwhile to mention that prior to 2007 the normal percentage of distressed home sales was less than 3%. Yeah, we’re back to normal alright. We are five years into a supposed economic recovery and distressed home sales account for 1 out of 6 all home sales and is still 500% higher than normal.

The distressed sales aren’t even close to the biggest distortion of this housing market. The RealtyTrac report reveals that all-cash purchases accounted for 42% of all U.S. residential sales in December, up from 38% in November, and up from 18% in December 2012. Does that sound like a trend of normalization? There were five states where all-cash transactions accounted for more than 50% of sales in December – Florida (62.5%), Wisconsin (59.8%), Alabama (55.7%), South Carolina (51.3%), and Georgia (51.3%). In the pre-crisis days before 2008, all-cash sales NEVER accounted for more than 10% of all home sales. NEVER. This is all being driven by hot Wall Street money, aided and abetted by Bernanke, Yellen and the rest of the Fed fiat heroine dealers.

 

The fact that Wall Street is running this housing show is borne out by mortgage applications languishing at 1997 levels, down 65% from the 2005 highs. Real people in the real world need a mortgage to buy a house. If mortgage applications are near 16 year lows, how could home prices be ascending as if there is a frenzy of demand? Besides enriching the financial class, the contrived elevation of home prices and the QE induced mortgage rate increase has driven housing affordability into the ground. First time home buyers account for a record low percentage of 27%. In a normal non-manipulated market, first time home buyers account for 40% of home purchases.

 

Price increases that rival the peak insanity of 2005 have been manufactured by Wall Street shysters and the Federal Reserve commissars. Doctor Housing Bubblesums up the absurdity of this housing market quite well.

The all-cash segment of buyers has typically been a tiny portion of the overall sales pool.  The fact that so many sales are occurring off the typical radar suggests that the Fed’s easy money eco-system has created a ravenous hunger with investors to buy up real estate.  Why?  The rentier class is chasing yields in every nook and cranny of the economy.  This helps to explain why we have such a twisted system where home ownership is declining yet prices are soaring.  What do we expect when nearly half of sales are going to investors?  The all-cash locusts flood is still ravaging the housing market.

The Case-Shiller Index has shown price surges over the last two years that exceed the Fed induced bubble years of 2001 through 2006. Does that make sense, when new homes sales are at levels seen during recessions over the last 50 years, and down 70% from the 2005 highs? Even with this Fed/Wall Street induced levitation, existing home sales are at 1999 levels and down 30% from the 2005 highs. So how and why have national home prices skyrocketed by 14% in 2013 after a 9% rise in 2012? Why are the former bubble markets of Las Vegas, Los Angeles, San Diego, San Francisco and Phoenix seeing 17% to 27% one year price increases? How could the bankrupt paradise of Detroit see a 17.3% increase in prices in one year? In a normal free market where individuals buy houses from other individuals, this does not happen. Over the long term, home prices rise at the rate of inflation. According to the government drones at the BLS, inflation has risen by 3.6% over the last two years. Looks like we have a slight disconnect.

 

This entire contrived episode has been designed to lure dupes back into the market, artificially inflate the insolvent balance sheets of the Too Big To Trust banks, enrich the feudal overlords who have easy preferred access to the Federal Reserve easy money, and provide the propaganda peddling legacy media with a recovery storyline to flog to the willingly ignorant public. The masses desperately want a feel good story they can believe. The ruling class has a thorough understanding of Edward Bernays’ propaganda techniques.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.”  

Ben Bernanke increased his balance sheet by $3.2 trillion (450%) since 2008, and it had to go somewhere. We know it didn’t trickle down to the 99%. It was placed in the firm clutches of the .1% billionaire club. Bernanke sold his QE schemes as methods to benefit Main Street Americans, when his true purpose was to benefit Wall Street crooks. 30 year mortgage rates were 4.25% before QE2. 30 year mortgage rates were 3.5% before QE3. Today they stand at 4.5%. QE has not benefited average Americans. They are getting 0% on their savings, mortgage rates are higher, and their real household income has fallen and continues to fall.

But you’ll be happy to know banking profits are at all-time highs, Blackrock and the rest of the Wall Street Fed front running crowd have made a killing in the buy and rent ruse, and record bonuses are being doled out to the men who have wrecked our financial system in their gluttonous plundering of the once prosperous nation. Their felonious machinations have added zero value to society, while impoverishing a wide swath of America. Bernanke, Yellen and their owners have used their control of the currency, interest rates, and regulatory agencies to create the widest wealth disparity between the haves and have-nots in world history. Their depraved actions on behalf of the .1% will mean blood.

 

Just as Greenspan’s easy money policies of the early 2000’s created a housing bubble, inspiring low IQ wannabes to play flip that house, Bernanke’s mal-investment inducing QEternity has lured the get rich quick crowd back into the flipping business. The re-propagation of Flip that House shows on cable is like a rerun of the pre-bubble bursting frenzy in 2005. RealtyTrac’s recent report details the disturbing lemming like trend among greedy institutions and dullard brother-in-laws across the land.

  • 156,862 single family home flips — where a home is purchased and subsequently sold again within six months — in 2013, up 16% from 2012 and up 114% from 2011.
  • Homes flipped in 2013 accounted for 4.6% of all U.S. single family home sales during the year, up from 4.2% in 2012 and up from 2.6% in 2011

 

The easy profits just keep flowing when the Fed provides the easy money. What could possibly go wrong? Home prices never fall. A brilliant Ivy League economist said so in 2005. The easy profits have been reaped by the early players. Wall Street hedge funds don’t really want to be landlords. Flippers need to make a quick buck or their creditors pull the plug. Home prices peaked in mid-2013. They have begun to fall. The 35% increase in mortgage rates has removed the punchbowl from the party. Anyone who claims housing will improve in 2014 is either talking their book, owns a boatload of vacant rental properties, teaches at Princeton, or gets paid to peddle the Wall Street propaganda on CNBC.

 

Reality will reassert itself in 2014, with lemmings, flippers, and hedgies getting slaughtered as the housing market comes back to earth with a thud. The continued tapering by the Fed will remove the marginal dollars used by Wall Street to fund this housing Ponzi. The Wall Street lemmings all follow the same MBA created financial models. They will all attempt to exit the market simultaneously when their models all say sell. If the economy improves, interest rates will rise and kill the housing market. If the economy tanks, the stock market will plunge, creating fear and killing the housing market. Once it becomes clear that prices have begun to fall, the flippers will panic and start dumping, exacerbating the price declines. This scenario never grows old.

Real household income continues to fall and nearly 25% of all households with a mortgage are still underwater. Young people are saddled with $1 trillion of government peddled student loan debt and will not be buying homes in the foreseeable future. Dodd-Frank rules will result in fewer people qualifying for mortgages. Mortgage insurance is increasing. Obamacare premium increases are sucking the life out of potential middle class home buyers. Retailers have begun firing thousands. The financial class had a good run. They were able to re-inflate the bubble for two years, but the third year won’t be a charm. In a normal housing market 85% of home sales would be between individuals using a mortgage, 10% would be all cash transactions, less than 5% of sales would be distressed, and 40% would be first time buyers. In this warped market only 40% of home sales are between individuals using a mortgage, 42% are all cash transactions, 16% are distressed sales, 5% are flipped, and only 27% are first time buyers. The return to normalcy will be painful for shysters, gamblers, believers, paid off economists, Larry Yun, and CNBC bimbos.

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The Insider Trading Behind the Housing Crash: Bilderberg-linked Economic Collapse

Wednesday, January 29, 2014

The Insider Trading Behind the Housing Crash: Bilderberg-linked Economic Collapse

Insider Trading Info at Countrywide and Fannie Mae Led to Housing CollapseAaron Dykes
countrywide-and-fannieActivist Post

Just ahead of the housing collapse that triggered the economic collapse and jobless drift, this man, Angelo Mozilo, then CEO at Countrywide, and Bilderberg Steering Committee member James A. Johnson, then CEO of Fannie Mae, were granting Congresspeople preferential “VIP” loans – while Goldman Sachs (with James A. Johnson a board member) bet on its collapse, and of the AIG insurance backing it.

Congress investigated and found some… issues… but these (apparent) criminals go free and remain in the shadows of public knowledge.

With Johnson a Bilderberg steering committee member, multiple-presidential campaign advisor and Goldman Sachs board member, it is perhaps significant to note that at the 2006 Bilderberg Meeting in Ottawa, Canada, investigative journalist Daniel Estulin reported that sources were telling him that Bilderberg had essentially decided to pop the housing bubble and that concerns over the housing crisis would be used to further bring the economy down This was two years before the housing collapse would trigger the worst economic crisis in the United States since the Great Depression – no one could have just made this stuff up. There is the clear indication here of insider trading and racketeering – a real investigation needs to take place to point fingers and arrest the banksters committing racketeering.

Via Wikipedia:

Mozilo’s compensation during the United States housing bubble of 2001–06 later came under scrutiny. During that period, his total compensation (including salary, bonuses, options and restricted stock) approached $470 million.

Mozilo testified before the United States House Committee on Oversight and Government Reform on March 7, 2008, calling reports of their pay “grossly exaggerated” in some instances and pointing out that they lost millions as well. He defended the pay: The compensation was a function of how the company did ahead of the mortgage crisis.

(Though there is obvious corruption, no prosecutions or further investigations have taken place.)
——
http://oversight.house.gov/wp-content/uploads/2012/07/Countrywide-112th-Report-7.3.12-1207-PM.pdf

IX. Countrywide and Fannie Mae Were Closely Aligned

From the U.S. House of Representatives Committee on Oversight and Government Reform(Darrell Issa, Chairman) report from July 5, 2012, titled “How Countrywide Used its VIP Loan Program To Influence Washington Policymakers.”

In 1999, Fannie Mae CEO Jim Johnson and Countrywide CEO Angelo Mozilo reached a strategic agreement giving Fannie Mae exclusive access to many of the loans originated by Countrywide in exchange for a discount on fees Fannie charged when buying loans. The agreement linked the growth and success of Countrywide to Fannie Mae’s continued desire to acquire a large volume of loans. Fannie Mae designed the deal to lock competitor Freddie Mac out of the market for Countrywide’s loans. 218 The agreement amounted to a volume discount. According to Paul Muolo and Matthew Padilla, co – authors of Chain of Blame , the arrangement linked Fannie Mae and Countrywide “at the hip.”

E – mail from Maritza Cruz to Kay Gerfen (Sep. 19, 2002) (CW – COGR2 – 0007149). Instead of assessing the standard fee a 75 of 23 basis points (0.23 percent) for every loan it guaranteed, Fannie Mae charged Countrywide only 13 basis points, “the lowest ‘g – fee’ deal Fannie had ever granted.” 220 While negotiating the volume discount, Countrywide CEO Angelo Mozilo leveraged his company’s position as the nation’s largest residential housing lender to extract concessions from Fannie Mae CEO Jim Johnson, who himself received more than $10 million worth of Countrywide VIP loans. 221 Fannie Mae General Counsel Alfred Pollard stated that he is “not aware of a general industry practice of other purchasers of mortgages entering into similar agreements during this timeframe . . . .”

FINDING: A strategic alliance forged in 1999 between Countrywide and Fannie Mae linked the growth of the two companies. The agreement was unique – there was not a general industry practice of giving a volume discount to a mortgage originator. In 2005, the two companies agreed to work together to expand lending to low – income borrowers. Countrywide and Fannie Mae further expanded their relationship with another strategic alliance agreement in 2005. During each quarter, Countrywide was required to sell to Fannie Mae at least 70 percent of all “Expanded Criteria Mortgages,” and at least 65 percent of those mortgages each month. Fannie Mae also agreed to “provide special marketing and other assistance” to Countrywide in its efforts to reach low – income borrowers. 224 Both parties pledged to continue a “Favored Relationship” in which they were “committed to the business success of the other party.” 225 The 2005 agreement required both companies to “maintain the complete confidentiality of the existence and terms of this agreement.”

In September 2005, Fannie Mae lobbyist Sharon Canavan wrote an e – mail to Countrywide lobbyist Pete Mills. Canavan, whose own loans were processed by Countrywide’s VIP unit, stated: “We just signed a new alliance deal with you guys. Pleasure doing business with you Mills replied: “Good. I like you guys!!!” 228 Fannie Mae Employees Gave Countrywide Inside Information Throughout 2005, Fannie Mae and Countrywide continued to expand their alliance. In April 2005, Fannie offered Countrywide “improved pricing for investor loan products,” the goal of which was “to offer an execution that is more competitive with private label execution.” 229 Days later, on April 19, 2005, a Fannie Mae official provided Countrywide executives with “a valuable heads up” on a change in loan collection policy.

David Battany, former Director of Single – Family Business in Fannie Mae’s Western Region office located in Pasadena, California, emphasized the sensitive nature of the information. In an e – mail to Countrywide Chief Risk Officer John McMurray, Battany stated: The above policy is not public, and you should be the first in the country to know this information. Please do not share this information outside of Countrywide at this time.

Fannie Mae Senior Executives Received the Highest Level of VIP Service Documents and information obtained by the Committee show the extent of Countrywide’s efforts to align the company with the most senior leadership at the GSEs. Documents show that Mozilo was personally involved in helping obtain discounted loans for former Fannie Mae executives James Johnson, Franklin Raines, Jamie Gorelick and Daniel Mudd. The documents also show Mozilo’s close personal relationship with Johnson, with whom he negotiated the first strategic partnership agreement that formally linked Countrywide and Fannie Mae for the first time. Jimmie Williams was familiar with Johnson and Raines. He received referrals from Fannie Mae and passed them to the VIP unit. He stated:

Q And did you regularly get referrals from Fannie Mae, or was this sort of a unique experience?

A I remember getting a couple from Fannie Mae. Q And when you got referrals from Fannie Mae, what did you do with them?

A The same process. It was the same thing, same process, same number, same desk. 232 Countrywide processed loans for Fannie Mae employees who participated in an employee assistance program, which provided money that could be put toward a down payment. Cruz testified that the VIP team was familiar with these complicated loans and processed them frequently. She stated:

Q: Do you recall that Fannie Mae and Freddie Mac employees were frequently referred into the program?

A: Yes. Actually, more Fannie Mae than Freddie Mac, but anybody that wanted to access our unit would get an application in and we would process it. In fact, we were aware of the employee assistance program for Fannie Mae, which requires a little bit of process that some people didn’t want to get involved when you have to take care of that. So we did, being that they knew among their employees, they knew how we were able to take care of those things, then they would refer themselves to us to take care of those loans.

Q: So Fannie Mae employees who took advantage of their internal employee assistance program

A: Yes.

Q: — would be made aware of Countrywide’s A: Yes, that we were able to process that part of their transaction. Because it entailed to fill out some forms, get signatures, send it to another underwriter in Fannie Mae that would sign off and say , okay, the loan is okay for this part of the assistance. Because what it was, part of the down payment came from funds from Fannie Mae for them to purchase the property.

Jim Johnson James “Jim” Johnson became chairman and CEO of Fannie Mae in 1991. David Maxwell, former general counsel for the Department of Housing and Urban Development , had initially recruited him to join Fannie Mae.

Williams Tr. at 115 – 116. Shortly after assuming the top position at Fannie Mae , Johnson went on tour to meet with top executives at the 233 Rose Tr. at 162 – 165. Muolo and Padilla at 111. mortgage banking firms with which Fannie had business. In California, Johnson met Angelo Mozilo, whose company Countrywide was already selling conforming loans to Fannie Mae. 236 Fannie’s handled its business with Countrywide from Fannie Mae’s west coast office, “conveniently located right across the street from Countrywide’s headquarters.”

Johnson and Fannie Mae accountants in charge of tracking the sources of the loans purchased by the GSE noticed Countrywide’s rapid growth. 238 Realizing Fannie Mae would be buying the majority of its loans in the future from non – bank mortgage companies like Countrywide, Johnson made an effort to court Mozilo. At the time, Countrywide was originating billions in loans and was on its way to becoming “the largest residential lender in the United States.”

“When Jim realized how much volume Countrywide was taking down, especially in California, he made it his mission to get to know Angelo,” said a Johnson aide. As the business ties between Countrywide and Fannie Mae grew stronger, so too did the personal ties between the two CEOs. When Mozilo ordered discounts and other forms of preferential treatment for Johnson and his friends and family, he frequently reminded staff how important Johnson was to the company. After waiving one and a half points on a loan for Johnson, Mozilo reminded David Kovnesky: “Jim Johnson continues to be a source of many loans for our Company and this is just a small token of my appreciation for the business that he sends to us and for his loyalty to the Company.” He did. Johnson and Mozilo became closely aligned. 242 When Mozilo was helping Johnson arrange a loan for his son, he e – mailed Carlos Garcia: “I agreed to make a loan to Jim Johnson’s [son’s] trust . . . . [I]f Jim need s to cosign, he will. It is important that we make this loan because of Jim’s help to the Company over many years. Please call Jim directly . . . and let me know if you need anything else.” 243 In an e – mail to Andrew Gissinger, Mozilo stated: “Jim is a very important customer.”

Johnson was described as a “big time FOA” in another internal e-mail. Mozilo’s message got through. When Underwriter Gene Soda was uncomfortable approving a loan to Johnson because of credit issues, he knew to seek further instructions rather than deny Johnson’s loan application. In the past these loans were just approved as directed. However, based on [the credit report] I’m concerned about signing on these loan s. These are obviously very high profile borrowers and lack of performance will be reported. I need some direction on how to proceed. In an e-mail to Managing Director David Spector, Soda wrote:

Mozilo ordered the loan approved, and gave Johnson a break. He instructed the VIP unit: “Charge him ½ under prime. Don’t worry about [the credit score]. He is constantly on the road and therefore pays his bills on an irregular basis but he ultimately pays them.”

When Condé Nast Portfolio and The Wall Street Journal broke the story of the VIP program in June 2008, Johnson’s legal team requested help from Countrywide in developing a public relations strategy. In an e-mail to Countrywide’s Chief Legal Officer, Johnson’s lawyer wrote: On behalf of Jim Johnson, I wanted to solicit Countrywide’s willingness to put out a brief statement simply noting that this was part of a regular business program at Countrywide that served hundreds of senior corporate executives and high – net worth clients (much as any private banking unit would at any lender), and was not specific to Johnson’s Fannie Mae connection.”

Mozilo obliged. He notified Countrywide’s public relations staff that Johnson was enrolled in the VIP program because he referred a lot of business to Countrywide. Mozilo wrote: Jim received no ‘special’ treatment . He has been the source of much business to Countrywide because of his confidence in us and knowing that we would treat anyone who comes to us fairly.

In fact, Countrywide gave Johnson special treatment to a greater extent than it did for any other VIP borrower. Mozilo made sure Countrywide went to great lengths to reward Johnson for his personal and professional relationship with the company. Johnson received the full suite of benefits from Countrywide’s VIP unit – from keeping Johnson’s purchase of a condominium in the Ritz Carlton secret from his wife so he could surprise her, to giving discounted loans to his son 252 and his maid, E – mail from Maritza Cruz to Gene Soda, Apr, 27, 2005 (CW – COGR – 0073839). to ignoring 80 credit issues and debt ratios 255 Additionally, Johnson was able to refer borrowers to the VIP unit.

Johnson referred John Potter, Kent Conrad, and Donna Shalala to Countrywide, among others. when Johnson’s loans did not comply with lending standards. To assist Johnson’s lawyers, Countrywide quickly gathered data about the various loans Johnson received from Countrywide. The company’s own audit showed that Johnson received loans at below – market rates.

In an interview on National Public Radio’s Fresh Air, Morgenson described Johnson as “corporate America’s founding father of regulation manipulation.” Morgenson stated: This is a person who really, really wrote the blueprint for how to neutralize your regulator, how to manipulate Congress to get your way and, you know, essentially how to destroy your critics. And they just took no prisoners over those years. They were extremely hard – nosed, extremely aggressive and abrasive, and really understood how to make sure that they had friends in Congress at all times. Now, their regulator at that time was very weak. It was HUD, the Housing and Urban Development, and essentially what Johnson did, which was really amazing at the time, was to help write legislation in 1991 and ’92 which became the Safety and Soundness Ac t that was designed to prevent Fannie Mae and Freddie Mac from calling on taxpayers in a time of failure. Also according to Morgenson, Johnson changed Fannie’s executive compensation plan to reward volume rather than quality of loans. Johnson earned over $200 million while working at Fannie Mae. 

Aaron Dykes is a co-founder of TruthstreamMedia.com, where this first appeared. As a writer, researcher and video producer who has worked on numerous documentaries and investigative reports, he uses history as a guide to decode current events, uncover obscure agendas and contrast them with the dignity afforded individuals as recognized in documents like the Bill of Rights. 

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The Housing Market May Make Us Slaves

American Citizens Are One Step Away From Being Chinese Slaves

Dave Hodges

January 23, 2014

The Common Sense Show

america chinese slaves

As Mark Twain once said, “There are lies and there are damn lies”. There is a rumor floating around the internet and it has gone viral. The rumor states that when Hillary Clinton went to China, she pledged the ownership of our homes as collateral to the Chinese so that they would continue to purchase our debt.

What Are the Chinese Purchasing?

Before I subscribe to this rumor, I would like to know which debt the rumor is referring to. Is the debt consist of the United States selling 17 trillion dollars in budget debt and the Chinese are purchasing that debt? Would the purchased debt consist of the unfunded liabilities debt totaling 240 trillion dollars? Or, would the Chinese be so kind as to purchase the really big debt of 1.5 quadrillion dollars of derivatives debt created by the bankster Ponzi schemes gone bad?

Are the Chinese just plain stupid or are they just dumb like a fox?

Applying Common Sense

Ask yourself, why would the Chinese ever purchase our derivatives debt of 1.5 quadrillion dollars when the entire GDP of the planet is only 65 trillion dollars? We can safely assume that the Chinese are not insane enough to purchase this debt.

It is a certainty that the Chinese did not purchase the unfunded liabilities debt of 240 trillion dollars for the same reasons that they would not purchase the derivatives debt in that there is no way to ever pay this debt off.

If I put on my tinfoil conspiracy hat, I might suggest that the Chinese would purchase the derivatives debt and/or the unfunded liabilities debt as a means to declare eminent domain over all US property. Following the transfer of all American deeds, the Chinese could boldly do what our Congress should have done decades ago, repudiate this debt owed to the central banksters. But  I almost forgot, there is going to be no repudiation of the debt because the Chinese are playing for the same team as the Russians and the Obama administration, namely, the Bastards from Basel.

And then finally, there is the notion that the Chinese would be dumb enough to even purchase our 17 trillion dollar debt. Why would any country purchase a debt from a single country when that debt is more than 25% of the entire value of the planet? In this scenario, where is the return on investment? This would be a totally foolish financial move by the Chinese and just the simple math alone, would suggest that this is not true. Yet, the Chinese are still purchasing our debt, why? And I have to agree with the rumor mongers about one thing, there is something of ours that is of enough value to get the Chinese to continue to throw good money after bad. And there is that trip that Clinton took to China and she did come away with a guarantee that the Chinese would continue purchase our debt. In other words, this internet rumor, regarding the collateralizing our homes, does indeed have some basis in fact because something is collateralizing the Chinese actions as they continue to bail out water on a sinking ship with no hope of realizing a return on investment from a monetary standpoint.

World Net Daily Receives the Standard Denial

The fact does remain that Secretary of State Hillary Clinton did indeed go to China for the express purpose of convincing the Chinese to continue to purchase our debt. With our economy in the mess that it is in, that had to be one tough sell. There can be no question that the Chinese had to be promised something really, really, really big to continue investing in the sinking American economy.

I completely understand why many people would jump to the conclusion that Clinton pledged the homes of American citizens. However, this has never been legislation or adjudicated. Private debt is not public debt and the United States government has taken no overt legislative action, nor have Executive Orders been issued to this effect.

Therefore when the State Department says there is “no factual basis” to an Internet rumor that went viral over the weekend claiming Secretary of State Hillary Clinton was willing to pledge American homes to China as collateral for Beijing buying the U.S. debt, I believe the government. However, what is most disturbing here is not what the State Department is saying. What is most disturbing is what they are not saying. Something was pledged to get the Chinese to continue to buy our debt and nobody from the government is being forthcoming enough to tell the public what the Chinese have been promised.

Legitimizing Tyranny

There is one thing that I will say in defense of our criminal enterprise government, they at least try to appear to have the power of law behind them in everything that they do. In other words, they do legitimize tyranny and make it sound so legal. For example, they can force you to buy Obamacare by calling it a tax. They spy on our every move by saying it is for our safety and that they can only do so by having to violate our rights. Therefore, if the Chinese were going to be granted the authority to seize our homes, we would see some legal justification for such an action. Still, there can be no doubt that Clinton had to pledge something to get something from the Chinese. What could be big enough that the Chinese would be willing take on a 17 trillion dollar debt with no hope of repayment? Let’s examine some possibilities which have already been legitimized by the actions of the rogue Obama administration.

America Is Not Broke As America Has Buried Treasure

Far beneath the ground, the federal government owns the rights to mineral and energy leases, from which they receive royalties, rents, and bonus payments, states the Institute for Energy Research, an industry group. According to their estimates, the government states that the assets are worth $128 trillion. That’s almost eight times the national debt.

Further, the unleashing of these assets would reduce the costs of energy for consumers and businesses.  Now, the owners of the utilities, the same people who are the owners of the oil companies, could not permit that. The utilities have invested billions toward the installation of smart meters and a new infrastructure  smart grid, in which they control all energy pricing.

Another factor that comes into play on why these assets are not being unleashed is because plentiful, reliable and cheap energy supplies would greatly accelerate economic growth and jump start the economy out of the doldrums. But when the globalists’ goal is the creation of a one world economic system controlled by a tyrannical one world government, the old government and economy must be brought down and this economic boon to the economy cannot be allowed to transpire. Therefore, the government acts as a procurement agent for the Chinese, who will eventually unleash these assets to themselves, after the collapse of the dollar. However, if I was taking on a debt the size of the United States, I would think bigger.

Chinese Debt Collection

There is no doubt that the Chinese are being granted authority to control our international inland ports in which eventually all commerce will flow through. If the Chinese own the Inland Ports, then they own the American trade system, by default. This is a likely asset that would have been pledged by Clinton. However, if I was taking on a debt the size of the United States, I would think bigger.

All Material and Human Capital

 I have written extensively on Executive Order 13603. This EO sets up the most draconian martial law authority on the planet. Literally, everything is controlled by the government. All food, all industry, all energy and you are controlled by the President. The interesting thing about EO 13603 is that does not require an emergency declaration to be acted upon.

 

Can there be any doubt?

Can there be any doubt?

A review of EO 13603 reveals that Obama not only can seize every material asset in the country, he can seize you and your family and assign anyone and everyone to duties of his choosing.  An examination of this EO reveals that the “new draft” would be controlled by the Secretary of Labor. The military draft would be administered by the Selective Service as it always has been done. The civilian draft will be overseen by the Secretary of labor.

EO 13603 is the whole enchilada. I have written four articles on different aspects of EO 13603 and I would suggest that everyone spend some time Googling this EO and come to your own conclusions. I think there is no doubt that it would take this type of pledge to keep the Chinese from withdrawing their support and it would be a good deal for them. If I could own all of America, including its people, in perpetuity, I would certainly make the deal the Chinese have apparently made with Hillary Clinton.

Conclusion

Handing over all capital resources to the Chinese, including human capital, makes a great deal of sense because this is the one thing that Clinton could have pledged which might have convinced the Chinese to continue to purchase our out-of-control-debt. If only our homes had been pledged to the Chinese as collateral for their investment in our debt, that would have been the deal of the century for all Americans.

We need to demand the full scope of what Clinton pledged to the Chinese. And as a man, I say this to all of you: If this possibility is not enough to get you to realize that you have no choice but to get into this fight, then nothing will and maybe then, we do deserve to be China’s slave colony!

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Half of Every Mortgaged Home in America Still Completely Underwater

Half of Every Mortgaged Home in America Still Completely Underwater-Fabian Calvo

By Greg Hunter On January 15, 2014 In EconomyFeaturedNewsPolitics No Comments

Fabian Calvo: the Next Real Estate Collapse & Buying Gold-SilverBy Greg Hunter’s USAWatchdog.com

Forget what you are hearing about stiffer mortgage lending requirements.  It’s not true.  Real estate expert Fabian Calvo says, “If you can fog up a mirror or you have a pulse, they will give you a home loan.  That’s what they have done with the car loans, and that’s what they are doing with housing loans.”  The so-called new rules do not have any down payment credit score requirement.  Zero percent down loans are going to make a very big comeback.  According to Calvo, “After the mid-term election, you’re going to see no-money-down loans just really roar back.  It’s all part of the pump and dump I’ve been telling you about for well over a year.”  So, are the housing market problems behind us?  Calvo, whose company buys and sells $100 million in distressed real estate debt annually, says, “Bottom line is we are still in a situation where half of every mortgaged home in America is completely underwater, and the Fed is going to have to print money for a very long time before those values return.  It’s just a matter of fact.” Calvo goes on to say, “Now, worst of all, they are beginning to securitize so they can bring in even more capital.  A third of all real estate in America is rental properties.  You are going to have Wall Street being the biggest landlord in America.  It’s subprime 2.0.” 

According to the Director of the Consumer Financial Bureau, Richard Cordray, new mortgage lending rules are supposed to make sure “the great mortgage meltdown never happens again.”  So, is the housing market more resilient to another downturn?  No way, says Calvo,“They’ve securitized the rental properties, which are now making the net effect of a collapse in values in the market much more devastating for the economy.”  Calvo predicts,“The next leg down in the real estate market will be much, much larger . . . Homeowners, who may have a little bit of equity in their home, should be very cautious right now.”  Still, Calvo says don’t expect a crash in 2014, and he says, “We’ll pretty much see a repeat of 2013.” Calvo says to watch when hedge funds start selling their real estate holdings.  He says, “I think that will be around 2015.  That will be the handwriting on the wall that the collapse in housing prices will be coming.”  Calvo thinks the next real estate collapse will be caused by forces outside of the housing market.  Calvo says, “I think the next leg down in the real estate market won’t be centered around the housing collapse.  It will be centered around the multi-bubble collapse of the dollar, the bonds, the government debt, all collapsing simultaneously. . . . This next collapse will make 2008 look like a dress rehearsal for the really big multi-bubble collapse we will be seeing.” 

So, how are the rich going to protect themselves?  Calvo, who does business with millionaires and billion dollar hedge funds, says, “A year ago, a third of the room would say buying gold and silver was just kind of crazy.  Today, you have half of the room investing much more than 10 or 15% of their portfolio into physical gold and silver.  To me, that is a big signal.”

Is there any good news?  Yes!  Calvo says, “There’s going to be spectacular sales, spectacular deals, way more than you saw back in 2008.” 

 

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Trouble Ahead For Housing In 2014?

Trouble Ahead for Housing in 2014?

By Michael Lombardi
January 7, 2014

 

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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.


 

Will the gains that the U.S. housing market made in 2012 and 2013 continue into 2014? As you’ll read below, the biggest threat to the housing market is moving in the opposite direction — against housing.

Sure, the Case-Shiller S&P Home Price Index, which tracks prices in the U.S. housing market, shows an overall increase of 13.6% in home prices in the first 10 months of 2013 (see the chart below).

 

Chart courtesy of http://stockcharts.com/

But for growth in the housing market to continue, you need favorable market conditions for buyers. Unfortunately, the “favorable” conditions of 2011 through to 2013 are now becoming “unfavorable.”

Interest rates on mortgages are rising sharply. In November of 2013, the popular 30-year fixed mortgage rate tracked by Freddie Mac stood at 4.26%. In the same period a year ago, this rate was only 3.35%. (Source; Freddie Mac web site, last accessed January 3, 2013.) The interest rate on the standard 30-year fixed mortgage has gone up 27% in twelve months. And the higher mortgage rates go, the more the affordability for home buyers declines.

But rising interest rates are not the only factor weighing against the housing market in 2014.

Adjustable-rate mortgages (ARMs), which virtually disappeared after 2007, are making a big comeback.

According to DataQuick, in November of 2013, about 11% of all homes in Southern California were bought using ARMs. This has doubled in the area from the same period a year ago. (Source: Los Angeles Times, January 1, 2013.) ARMs have a fixed interest rate for a certain period of time, and then rates on the typical ARM adjust to market rates. What will happen to all those home buyers who purchased houses using ARMs over the past three years as interest rates increase? They will have added monthly costs—that’s what will happen.

Any softness for the U.S. housing market at this point will spell disaster for an already delicate U.S. economy. I’d be weary of the housing market recovery in 2014.

 


Originally posted at Profit Confidential

 

(c) Michael Lombardi, MBA

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4 Key Lessons From 2013

January 2, 2014 
Santiago, Chile 

1) Politicians believe there are no consequences for destroying our liberty… 

Stimulus and response. That’s the easiest way of summing this up. When politicians steal, and there are no consequences, they’re going to keep stealing. 

Cyprus proved this point handily. The government froze bank accounts for everyone in the country (of course, the big bosses got their money out in time). And yet, there was no violent revolution in the streets. People just accepted it. 

Poland nationalized pensions. Argentina imposed severe capital controls. The French are taxing everything under the sun. The US government was caught red-handed spying on… everyone. 

And yet, there have been ZERO consequences. Citizens have been trained like caged animals to simply roll over and acquiesce. I imagine the politicians are thinking, “Holy Cow! I can’t believe we just got away with that…” 

It only reinforces their behavior. With each destructive act, they become more bold, more brazen in dismantling our liberties, confident that they can continue to act with total impunity. 

2) …Central bankers and economists believe there are no consequences to printing money… 

The Fed expanded its balance sheet by $1.1 TRILLION in 2013, a whopping 38.5%. Nobody seems to mind. The stock market surged to all-time highs, the bond market remained stable, and everyone pronounced the ‘recovery’ was in. 

I attended a dinner a few months ago where Ben Bernanke himself touted how much his quantitative easing had helped US economic conditions. 

They really believe in what they are doing. They really believe that conjuring endless quantities of money out of thin air is the path to prosperity. 

Not to mention, our modern society awards its most esteemed prizes for intellectual achievement to the likes of idiot savants like Paul Krugman who tell us that the Fed should be printing even MORE money. And people listen to him. 

So we can only expect Ben “I can raise interest rates in 15 minutes” Bernanke, and his heir apparent Janet Yellen, to give us more of the same. 

3) …Investors think there are no consequences to deficits, or debasement… 

In 2013, headlines like “the US deficit is only $700 billion” were actually considered good news. 

And markets have given all of these fiascos a pass– from the government shutdown to record-shattering debt levels to downgrades by the rating agencies. AA became the new AAA in 2013. 

Nobody cares that the US government ‘borrowed’ a record amount of money from the Social Security Trust Fund. Or that they spent a record amount just to pay interest on the debt at a time when interest rates are at all-time lows. 

Rather, they just keep investing… without a single thought to the possible risks. The fear of missing the big boom is greater than the fear of losing money. But then again, it’s not their money at risk. It’s yours. 

4)  …But Joe Six-Pack knows this is all crap. 

In 2013, the collective net worth of the 300 richest people in the world grew to $3.7 trillion, 16.5% higher than 2012. Corporate profits were also at record levels. 

Fortune 500s, the super-rich, rich, and even upper middle class have largely been beneficiaries of the central bank induced asset bubble. 

But everyone else is getting hammered by inflation… watching their savings and livelihoods melt away before their very eyes. 

A report from the US Census Bureau this year showed that median household income has declined for five straight years. And those living in poverty, using food stamps, or receiving unemployment benefits remained at record high levels in 2013. 

Meanwhile, the wealth gap has grown to its largest since 1929– the year of that fateful financial collapse. 

It’s time for a reality check: something is wrong with this picture. 

We’ve become desensitized to everything. “Unprecedented” monetary policy. Record debts. Massive wealth gap. Government surveillance. Theft. Deceit. Inflation. 

We’ve become so accustomed to getting screwed, it’s just par for the course now. We sit quietly and wait for the next round of beatings, shrugging it all off as the new normal. 

This isn’t normal. This is not how a free society is supposed to function. 

A free society does not spy on its own people, threaten them with drone assassination, and award an unelected banking elite with supreme authority to rob purchasing power from the masses in favor of a bubbly stock market. 

And despite the conventional wisdom, this is not a consequence-free environment. 

History is full of examples of entire nations that reached their breaking points… shouting from the rooftops“I’m mad as hell! And I’m not going to take it anymore!”

Beale1.png
2013 already saw violent unrest in some of the most stable countries in the world like Singapore and Sweden, all underpinned by absolute disgust for the status quo. 

Whether today or tomorrow, this year or next, there will be a reckoning. The system is far too broken to repair, it must be reset. 

It’s simply absurd to look at the situation objectively and presume this status quo can continue indefinitely… that this time is different… that we’re somehow special and immune to universal principles. 

This is not some prediction for doom and gloom. Far from it. 

It’s actually a message of optimism. For the sooner these crackpot criminal politicians and their central banking ilk are stricken from power, the better off we’ll all be. 

Unfortunately there’s going to be quite a bit of turmoil to get there. 

Here’s to 2014. It’s going to be a hell of a year.

Signature 
Simon Black 
Senior Editor, SovereignMan.com
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All-Cash Home Sales Hit Record 42% of Sales

Courtesy of Mish.

Even though household formation by millennials is at a record low percentage, home sales are at modest levels thanks to investor all-cash buying.

Market-Watch notes All-Cash Home Sales Reach New High.

More Americans are buying homes in all-cash deals, according to a new report. But real-estate experts say this increase may not be a good sign for the health of the housing market, which may also be impacted by the Federal Reserve’s decision to pull back on its bond-buying program. 

All-cash purchases accounted for 42% of all sales of residential property in November 2013, up from 39% during the previous month, according to data from real-estate data firm RealtyTrac released Friday. “This is still a very cash- and investor-driven market,” says Daren Blomquist, vice president at RealtyTrac.

The cities [states?] with the biggest month-over-month jumps in the number of all-cash sales, according to RealtyTrac, included Florida (63%), Georgia and Nevada (both 51%), South Carolina (50%) and Michigan (49%). This helped boost overall sales of U.S. residential properties, which sold at an annualized pace of 5.1 million in November 2013, a 1% increase from the previous month and a rise of 10% from a year ago.

The decision by the Federal Reserve Wednesday to reduce its bond-buying program to $75 billion per month starting in January, from $85 billion per month currently, may also encourage more cash-purchases — at least for those who can afford it, Blomquist says. “They’re going to do everything they can to keep interest rates low, which may be tough to do,” he says. To reduce cash buyers, he says there will need to be low interest rates and a cooling off in home price appreciation. “Otherwise, you’ll see the market skew even further toward cash buyers,” Blomquist says.

When interest rates went up slightly in June, there was a notable increase in cash sales, Daren Blomquist says. “Some markets are more interest-rate sensitive than others based on affordability,” he says. “Just a slight increase makes homes a lot less affordable.” In fact, another report by Goldman Sachs in August was even more strongly in the cash-is-king camp, estimating that cash sales now account for 57% of all residential home sales versus 19% in 2005.

A record number of Millennials, adults aged 18 to 32, put off household formation and stay at home to live with parents.

See Haircut Deficit: Kids Living in Basements a Drag on U.S. Services Spending; Since Recession Ended, Durable Goods +34%, Services +6.3%; What’s Next?

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

 

 

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6.4mn Home Mortgages in US Still Underwater

There are still about 6.4 million homes with “underwater” mortgages in the US.
Wed Dec 18, 2013 10:34AM
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‘US hemorrhages cash on war machines’
Nearly 6.4 million homeowners in the United States are still “underwater” on their mortgages, owing the bank more than their house is worth, experts say.

“Nearly 6.4 million homes, or13 percent of all residential properties with a mortgage were still in negative equity at the end of the third quarter,” said CoreLogic, an Irvine, California based company providing financial, property and consumer information.

Certain states are bearing a greater brunt of the problem, CoreLogic found. Just five states accounted for more than one-third of the underwater homes nationally.

Nevada led with the highest percentage of underwater mortgages (32.2 percent), followed by Florida (28.8 percent), Arizona (22.5 percent), Ohio (18.0 percent) and Georgia (17.8 percent).

The problem is greater at the lower end of the economic scale. CoreLogic found that 92 percent of homes worth more than $200,000 had equity; for homes less than $200,000, only 82 percent had equity.

More than four years after the worst financial crisis in the US officially ended, a new wave of mortgage trouble appears to be threatening the American banks again, Reuters warned in a November report.

The news agency reported a worrying rise in the number of US borrowers who are increasingly missing payments on home equity line of credit they took out during the housing bubble, which led to the Great Depression of 2008.

The report warned that consumers’ payments will rise further when the Federal Reserve starts to hike rates, because the loans usually carry floating interest rates.

AHT/ARA

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The rise of modern day real estate feudalism: How a majority of Americans are missing out on the gains of the new rentier class.

From Doctor Housing Bubble

 

Feudalism was a set of customs in medieval Europe that setup a society in which relationships were based on holding land in exchange for service and labor.  There is a modern day movement that is silently pushing out the middle class from truly owning real estate.  In my view, there is no coincidence with the contracting US middle class and the massive expansion of “all cash” buyers.  For most working Americans buying a home with all cash is so far removed from economic reality that it is not even an option.  This used to be historically the case.  However, since the Fed adjusted accounting rules and banks were able to control how inventory leaked out into the market, we suddenly have the highest number of cash and investors diving into the real estate market with alternative financing.  People in Nevada, Arizona, and parts of Florida are competing with 50 to 60 percent of investors just to buy a home.  In California the figure has been over 30 percent going back to 2009.  Lower rates are a bigger pull for large investors since the safe trade in bonds or Treasuries is no longer there.  So for this group, those 4 to 5 percent cap rate yields seem more attractive than the nearly non-existent rates on Treasuries.  So we now have a system in place that is crushing the US homeownership rate and is shifting more property into concentrated hands.

 

First step, control that inventory

There was an interesting trend that started early this year.  Nationwide inventory was starting to increase.  Yet once rates spiked in the summer, that trend completely reversed:

inventory back and then gone

Banks have an entire menu of methods of slowing down inventory that hits the market.  Slowly since 2007, banks have figured out better methods of leaking out inventory.  For example, freezing mark-to-market accounting and all the other programs that allowed for mortgage modifications.  In some cases, the foreclosure process was dragged out 3 to 4 years!  Yet the public face was to help average people but in reality, what has really occurred is a major shift from US household ownership of properties to investors swooping in and picking up properties on the cheap courtesy of modern day banking policy.  In the end 5,000,000 Americans (and counting) still lost their homes via foreclosure and continue to do so.  The massive spike in prices is allowing more people to exit mortgages they simply cannot afford by simply selling.

Yet the drop in inventory is adding pressure to a market where sales are still weak.  What you have is a fully controlled “market” where the Fed is buying up virtually all mortgages and investors instead of focusing on companies or more productive economic activity are becoming large scale landlords.

Prices up and homeownership down

Prices are up yet the homeownership rate in the US continues to fall:

us homeownership rate

How is this even feasible?  For one, you might have one investor, purchasing a ton of properties:

“(Bloomberg) The market for rental-home securities may grow as large as $900 billion, assuming 15 percent of annual home purchases are conducted by investors and 35 percent of those and existing rental-home owners turn to the market for financing, according to Keefe Bruyette & Woods Inc. Banks have been the main source of financing for new property landlords such as Colony Capital LLC and Blackstone, which has spent $7.5 billion on about 40,000 houses.”

Instead of having 40,000 families buying those homes, you have a couple corporate owners.  For nearly half a decade 30 percent of all US single home buying is going to investors.  Historically, this figure was closer to 10 percent.  That is a dramatic shift in the US real estate market.  Did becoming a landlord suddenly become sexy for Wall Street?

With prices up dramatically in the last year including going up close to 30 percent in California, regular families are having a tougher time competing with the small amount of inventory available when investors are battling it out.  What is interesting is also the number of rentals on the market has declined causing rents to spike.  Household incomes are being eaten up either by higher home prices or higher rents as more households shift to renting adding pressure to the low supply of rentals.  Ironically, we are not seeing a flood of these purchases hit the rental inventory market.  Some are trying to flip which might explain the lack of rental inventory but this would add to overall sales inventory which has also fallen.  This isn’t a full market so hard to guess what the next move is.

New home sales – make a fuss for nothing

There was a big splash being made about the “massive” jump in new home sales.  You want to see this big jump in context?

new home sales

The chart above sums it up.  All the action is happening in the existing home sale market and investors are dominating this game.

Cash buying

It is very clear that one-third of single family home purchases have gone to investors since 2009.  However, some estimates put this figure a bit higher:

GS-housing-cash

all cash buyers

A safe number is one-third.  In markets like Nevada, Arizona, and Florida it is closer to half.  Even in Las Vegas, what regular working family is going to have $100,000 sitting around to make an all-cash offer?  In California where a shack goes for $500,000 the game is even more bizarre.  Yet people have to work and live somewhere.  People for the most part are idle creatures.  In California you have the conundrum of golden real estate handcuffs via Prop 13.  People can sell and move to another state and have a healthy retirement but would rather eat cat food and live in a shack with low tax rates.  It is an interesting trend especially with many baby boomers now seeing their kids coming back home with loads of college debt.

Rental market getting squeezed

The low supply and large investor buying is now causing a drop in the rental vacancy rate:

rental market

Because of this rents are moving up but in some markets are still below the record highs:

median rent

Source:  Quandl, Zillow

However nationwide rents are at an all-time record high:

nationwide rents

Low inventory is a symptom of market manipulation.  Too many odd incentives and banking shenanigans have created a distorted market.  The Fed now owns 12 percent of the mortgage market and is essentially the only buyer of mortgage backed securities.  Look at all the above data.  Who do you think is really winning here?  Rents are higher.  Home prices are higher.  Yet the menu of good employment opportunities is limited.  Incomes are hardly increasing.  The younger generation is massively in student debt and they are having a tough time finding good work.

What an odd game of real estate we are living in.

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VAPORIZED: Detroit Obliterates Retirement Funds: 80% Cuts to Pensioners: “This Is Going to Affect Everyone”

Mac Slavo
December 3rd, 2013
SHTFplan.com

 

detroit-bankrupt

Though a decade ago civil servants and union members would never have believed it could happen, the stark reality of the situation came to pass this morning.

We now know the answer to the question: What happens when a government makes promises it can’t keep and borrows so much money it can never be repaid?

This morning a judge overseeing the City of Detroit’s fiscal sustainability ruled that the City can be afforded bankruptcy protection, meaning that all 100,000 of its creditors now stand to lose a significant portion of monies owed to them.

The most notable victims are the tens of thousands of retirees living off of pensions – many of whom will see an 80% obliteration of the retirement funds they believed they’d receive until they died.

Creditor attorneys have repeatedly speculated they expect Orr’s plan of adjustment to mirror the June 14 proposal he offered creditors to avoid bankruptcy. That deal proposed giving unsecured creditors such as pensioners and bondholders a $2 billion note for $11.5 billion in estimated debts — or less than 18 cents for every dollar owed.

Most of those affected assumed the government would simply find a way to borrow more money or fabricate it out of thin air. They were wrong and now they are paying the price:

“Oh my, oh my. Everyone is worried. When we think about what could happen, it’s scary,” said Larsen, 85, who moved to Palm Harbor, Fla., outside of Tampa after he retired in 1976.

“If they take our health insurance? Oh god. Cutting pensions? It’s terrible. The city of Detroit was our pride. Honest to goodness. We loved it.”

“We are all worried,” said Nancy Schmidt, the group’s secretary. “This is going to affect everyone in different ways. If it comes to fruition, I’ve got two empty bedrooms and I may end up having to rent them out.”

“My net pension is $2,300 a month,” said Kammer, 77, who moved to Englewood, Fla., not long after retiring with a disability in 1977.

“I could make it for a while, go through savings, but pretty soon, I’d end up in bankruptcy.”

“(Retirees) feel like something that they’ve earned and were promised is being taken away from when they’re not in a position in their lives to plan for it and fight back,” Plecha said. “They’re at a time in their lives when they’re most vulnerable.”

Detroit is the first and they have now set a precedent for other cities in similar situations. You can be assured that more will follow.

First it will be the cities. Then the states will go under. And finally, the Grand-Poobah – our own Federal government. Detroit’s debts are pocket change compared to the $200 trillion in future liabilities owed by the United States of America.

If you are depending on a government retirement package to be there for you for the rest of your life, you’d better think again. Over twenty thousand Detroit retirees thought the same thing – and as of today they have been wiped out.

When this crisis hits the Federal Government – and it will – you’d better be ready for them to take drastic measures. This means they’ll be forced to not only cut retirement benefits promised to federal employees, but will make the case that if they have to give up their retirement funds, you’ll have to give up your 401k, IRA or personal savings.

Sounds impossible, right? Congressional members have already gotten the ball rolling on a nationalization of America’s retirement funds, and when they are ready to do it they’ll pass the legislation just like they did when they seized 1/6th of our economy by nationalizing health care.

They are coming for the money – YOUR money – because they will be left with no other choice.

If you’re not planning on a secondary income stream or preserving wealth in the form ofgold and silver, productive land, or other tangible assets, you’ll end up just like the retirees from Detroit. Having additional resources, like a well stocked long-term pantryand a preparedness plan for financial disaster, can mean the difference between living in poverty or thriving when best laid plans fall apart.

Plan for the worst, because that’s what’s coming.

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