There is no free in liberty.


Friday, October 21, 2011

Keynesian Roots - Diseased Fruit....



... based on the number of toxic loans in the system in 2008, the government was responsible for not just a simple majority, but more than two-thirds. It's quantifiable — 71% to be exact (see chart). And the remaining 29% of private-label junk was mostly attributable to Countrywide Financial, which was under the heel of HUD and its "fair-lending" edicts.

Yes, we are in a depression brought on by government (fed.) manipulating the money supply such that borrowing became irrationally cheap, then imposing irrationally low lending "fair-lending" practices on financial institutions and having gone so far as to remove legislated barriers to irrationally low lending practices, our government created a financial bubble from which it absolved the financial industry of the moral hazard of irrational lending.

What was the common theme between the Fed's low interest rates, government mandates to lend to the risky, and government's dismantling of barriers to risky lending?

The common theme was to put cheap money in the hands of the citizenry so that they could help propel the economy forward through spending.

Keynesian roots, diseased fruit.


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