Well, well, well.
Once again, my man Glenn Beck has hit the nail squarely on the head.
Beck has been saying for months that Barry O and his band of thugs (Congress) would do something before the elections to do two things;
#1-- try to sway the Democrat voter base away from the Tea Party types, and perhaps keep the Congressional losses manageable.
#2--...and most importantly.....pull something grandiose to try and disguise just how frickin' bad this economy is in the crapper, and how close to total collapse it truly is. (..these aren't the droids you're looking for...)
Here's some excerpts from the article, with emphasis added by me on some of the 'code language' I picked up on. And if dumb old Tony can think this out this easily, we may be in more trouble than what I'm thinking, believe me.................
Link to "The August Surprise"
Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.
The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie. A few key points:
1) Republican leaders believe this is going to happen since GOPers and Democratic moderates in the Senate are unwilling to spend more taxpayer money on more stimulus. But such a housing plan would allow the White House to sidestep congressional objections and show voters it is doing something tangible about an economy that seems to be weakening.
2) Wall Street banks are alerting their clients privately to this possibility. Here is what some are cautiously saying publicly. This from Goldman Sachs:
GSE policies are one of a dwindling number of policy levers the administration has left to pull, so it is conceivable that changes could be made, though there is no sign that a policy change is imminent. The Treasury’s essentially unlimited ability to provide financial support to the GSEs creates an interesting situation over the next twelve months: the GSEs could potentially be used to provide additional support for the housing market and, to a lesser extent, the broader economy in 2H 2001.
And this from Mizuho Securities:
As policy makers ponder their next move the data suggests that they face not only a stalling recovery but a growing risk of deflation taking root in the economy. As a result, the Administration has turned back to industrial policies by approving the purchase of a sub-prime auto lender by GM as a means for pumping up domestic sales, especially since the latest auto sales data indicates that consumers are still responsive to incentives. This precedent increases the risk that the government will use its control of Fannie and Freddie to increase consumer cash flow and juice the economy again.
Moreover, Morgan Stanley is pushing a mortgage relief plan directly to Congress. On August 3, a top Morgan Stanley economist recommended to the Senate Budget Committee that Fannie and Freddie ease their lending standards to allow millions of Americans to refinance their mortgages.
3) Keep in mind the political and economic context. The nascent recovery is already running out of steam. Wall Street economists just downgraded the government’s second-quarter GDP estimate of 2.4 percent to around 1.7 percent. And as even Treasury Secretary Timothy Geithner is warning, the unemployment rate may well begin to rise back toward the politically toxic 10 percent level given such sluggish growth. Many in the White House thought the unemployment rate would be dropping sharply by this point in the recovery.
But that is not happening. What is happening is that the president’s approval ratings are continuing to erode, as are Democratic election polls. Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.
4) And don’t think the White House is worried about financial market reaction. If they thought it would pass Congress, they would be submitting a $200 billion Stimulus 2.0 (3.0?, 4.0?) right now.
August is supposed to be a slow month for Washington politics. But maybe not this one.
Wow, where to start??
Item #1 (in blue )--the US government, for all intents and purposes, due to various bailouts over the past 2 years, either owns a majority of, or has financial control of; Fannie Mae, Freddie Mac, Goldman Sachs, GM, and Chrysler, to name but a few. They also, thru GM's "purchase of a sub-prime auto lender by GM as a means for pumping up domestic sales", own the means to finance sub-prime auto loans.
This has already been tried, with miserably failed results, in the housing industry, a'la Freddie/Fannie, wit the 'sub-prime lending' debacle that has caused the mortgage crisis that we're talking about in this very article!!
So basically, they're going to "fix" the sub-prime mortgage loan crisis by "forgiving" the loans that are in arrears on the houses that are "underwater" or "upside down"--due to the mortgage sub-prime mess and hope that the folks who "save money" on their delinquent loan payments being forgiven will go out and buy cars from GM at sub-prime rates from the government-bailed-out/owned car company???
Holy mother, talk about borrowing from Peter to pay Paul.......... these guys are nothing but a bunch of Ponzi artists....
Okay, here's the kicker;
Item #2 above (in red )..and once again, most importantly; the Fed is admitting that we are facing DEFLATION in our economy.
What does this mean??
Well, basically, it is general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an economic depression.
However, since the Fed has already been printing money faster than ever, and flooding the economy with currency, we are already at a very precarious point in our economy. The government has doled out bailout after bailout. Unemployment is creeping back up. The Fed has flooded the economy with currency. The National debt is absolutely out of control, now over 91% of our Gross Domestic Product. Soon, very soon, it will overwhelm our entire economy.
We are going to be discussing another topic very soon.
hyperinflation often occurs when there is a large increase in the money supply not supported by gross domestic product (GDP) growth, resulting in an imbalance in the supply and demand for the money. Left unchecked this causes prices to increase, as the currency loses its value.
Because of this, sellers demand a risk premium to accept the currency, and they do this by raising their prices.
One of the most famous examples of hyperinflation occurred in Germany between January 1922 and November 1923. By some estimates, the average price level increased by a factor of 20 billion, doubling every 28 hours. (The Weimar Republic)
I could go on and on, but enough for now.
My head hurts.
Think I'll go load some more .270.