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Re: Need to buy a house Wait until September [Re: Dirt] #7574243
05/01/22 11:45 AM
05/01/22 11:45 AM
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mn north of blakely
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Steven 49er Offline
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Originally Posted by Dirt
"

Our State once had a student loan program. It became a financial disaster. They quit doing it. Since they couldn't print money, what was their motivation? Student loans would never be made, without crazy high interest rates to compensate for the crazy high default rate and no collateral. If it was legal, to declare bankruptcy to get out of these loans, nobody would give them either.

There are ways to do these programs to limit risk, and incentivize attending classes. The U.S. government should talk to the VA about how to run a college tuition program. Unless the VA has screwed this up, back in the day they didn't just hand you a bunch of money to go to school. You got monthly checks, based on getting I believe a yellow card signed by all your professors that you were attending classes, every month. No yellow cards, no money.


The government doesn't have any business in student financial aid. As long as it is involved, funding secondary education will be a disaster.

It's no surprise that college tuition has dramatically outpaced everyday inflation.


"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574247
05/01/22 11:48 AM
05/01/22 11:48 AM
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Chancey Offline
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Thanks for responses fellas. That was a good easy to follow article Dirt, had no idea all the different moving parts and different types of loans.

Steven, what you wrote makes perfect sense to me. I had to look up Fractional Reserve Spending and watched some youtube videos on it and it helps explain the situation a little clearer.

Embarrassing that I am my age and am pretty ignorant on how fiat money, lending, loans/loan types, and stocks all really affect inflation and interest rates. I've got a lot to learn.


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Re: Need to buy a house Wait until September [Re: jbyrd63] #7574282
05/01/22 12:44 PM
05/01/22 12:44 PM
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Armpit, ak
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Dirt Online content
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Chancey, I wouldn't worry too much about. hyperinflation, just high inflation. There is usually more involved than increasing the money supply by even 20% a year. We have had 50 some years of 1971 fiat currency and most years didn't have inflationary problems much less create hyperinflation.

"Hyperinflation
Main article: Hyperinflation in the Weimar Republic
In the early post-war years, inflation was growing at an alarming rate, but the government simply printed more currency to pay debts. By 1923, the Republic claimed it could no longer afford the reparations payments required by the Versailles Treaty, and the government defaulted on some payments. In response, French and Belgian troops occupied the Ruhr region, Germany's most productive industrial region at the time, taking control of most mining and manufacturing companies in January 1923. Strikes were called, and passive resistance was encouraged. These strikes lasted eight months, further damaging both the economy and society.[citation needed]

The strike prevented some goods from being produced, but one industrialist, Hugo Stinnes, was able to create a vast empire out of bankrupt companies. Because the production costs in Germany were falling almost hourly, the prices for German products were unbeatable. Stinnes made sure that he was paid in dollars, which meant that by mid-1923, his industrial empire was worth more than the entire German economy. By the end of the year, over two hundred factories were working full-time to produce paper for the spiraling bank note production. Stinnes' empire collapsed when the government-sponsored inflation was stopped in November 1923.[39]

In 1919, one loaf of bread cost 1 mark; by 1923, the same loaf of bread cost 100 billion marks.[40]


One-million mark notes used as notepaper, October 1923
Since striking workers were paid benefits by the state, much additional currency was printed, fuelling a period of hyperinflation. The 1920s German inflation started when Germany had no goods to trade. The government printed money to deal with the crisis; this meant payments within Germany were made with worthless paper money, and helped formerly great industrialists to pay back their own loans. This also led to pay raises for workers and for businessmen who wanted to profit from it. Circulation of money rocketed, and soon banknotes were being overprinted to a thousand times their nominal value and every town produced its own promissory notes; many banks and industrial firms did the same.[citation needed]

The value of the Papiermark had declined from 4.2 marks per U.S. dollar in 1914 to one million per dollar by August 1923. This led to further criticism of the Republic. On 15 November 1923, a new currency, the Rentenmark, was introduced by Stresemann at the rate of one trillion (1,000,000,000,000) Papiermark for one Rentenmark, an action known as redenomination. At that time, one U.S. dollar was equal to 4.2 Rentenmark. Reparation payments were resumed, and the Ruhr was returned to Germany under the Locarno Treaties, which defined the borders between Germany, France, and Belgium.


Who is John Galt?
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574298
05/01/22 01:08 PM
05/01/22 01:08 PM
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McGrath, AK
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white17 Offline

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Chancey: The "interest only" loans were loans where the borrower only paid the monthly interest. Nothing on the principal...therefore never reducing the original loan amount and building no equity in the property.

NINJA loans were another creation . No Income No Job or Assets. Some were called "Liars Loans" because all the data on the loan application was bogus but never checked by the lender. This is usually a felony,

Is it any wonder people defaulted on these things?


Not to be too picky...but I think the article Dirt posted is terrible ! This is a very complex subject and it would have been better explained by an English speaker.

The article get the mechanics of the loans and institutions correct but completely avoids the biggest part of the problem.

The true cause was politics. Democrat politics. Starting in 1977 with Jimmy Carter and the Community Reinvestment Act.( google to see the text).

When Clinton was elected he decided to use the CRA to buy votes from the minority community. With Janet Reno as Atty General they threatened lending institutions with extinction if they did NOT make the loans described above.
Eric Holder doubled down on this during the Obama administration.

Maybe you recall the names of the players and organizations involved. Barney Frank, Chris Dodd, Franklin Raines, Mudd and others. Fannie Mae, Freddie Mac, Countrywide Financial, Lehman Brothers.

Barney Frank was one of the congressional overseers of Fannie Mae & Freddie Mac. He also got his boyfriend a job at Fannie ( his fanny for sure).
Franklin Raines was a senior officer at Fannie but joined the Clinto administration for a while then returned to Fannie.

The bottom line is that the Dems were using Fannie to buy all the CDO's and MBS's from the investment banks. Fannie was lying to regulators about the risk they were actually holding, They were using taxpayer dollars to support the entire house of cards...........all in an attempt to buy votes from lower income people.

Bush: attempted to to shut this down by repeatedly trying to get Fannie to give a true accounting of their risk position. Barney Frank stopped anything like that because the Dems controlled Congress.

These are just some highlights that Dirt's article never even touches on.

Here's a couple of links that explain the details better than I can.




https://online.wsj.com/article/SB10...t6&reflink=desktopwebshare_permalink

https://online.wsj.com/article/SB10...52&reflink=desktopwebshare_permalink

Countrywidee Financial


Mean As Nails
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574340
05/01/22 02:08 PM
05/01/22 02:08 PM
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Rat Masterson Offline
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Every house I bought I had to have 20% down, had skin in the game. Maybe colleges should carry student loan debt, they might watch what they are doing a little closer.

Re: Need to buy a house Wait until September [Re: jbyrd63] #7574348
05/01/22 02:30 PM
05/01/22 02:30 PM
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BuckMink Offline
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glad we bought our house last year at 2.75 percent interest rate. I dont regret it and wont wait til september.. housing goes in cyces anyways. As we was leaving, 3 other potential buyers were walking in... we offered 10k over and by the time the negotations were over, the price was back closer to the orginial and what the house was valued at.

co-workers kept saying you either could get a nice house with no yard or a huge yard with a so-so house the way the market is... We was blessed to have alittle bit of both. And its a ranch to boot which we both really wanted but man oh man the frustration trying to see houses.

Re: Need to buy a house Wait until September [Re: Rat Masterson] #7574355
05/01/22 02:36 PM
05/01/22 02:36 PM
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white17 Offline

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Originally Posted by Rat Masterson
Every house I bought I had to have 20% down, had skin in the game. Maybe colleges should carry student loan debt, they might watch what they are doing a little closer.



Now you are bringing up a mirror image of the subprime mess. Student loans are another liability with which the Dems have saddled the taxpayer. Another 1.6 trillion.

Student Loans


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Re: Need to buy a house Wait until September [Re: jbyrd63] #7574365
05/01/22 02:53 PM
05/01/22 02:53 PM
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Quote
Embarrassing that I am my age and am pretty ignorant on how fiat money, lending, loans/loan types, and stocks all really affect inflation and interest rates. I've got a lot to learn.


Chancey- There's a lot of people much older than you that are totally clueless of the financial house of cards that has been built. Most will keep on playing it until it collapses down all around them. Knowing how to practically live is probably more important to know about all of the technical financial wizardry. Its pretty hard not to live somewhat in the financial house of cards that's been invented, but knowing how keep your family fed, warm, and secure is probably more important. As Steven 49er said, we're all going to have to eat part of the ***t sandwich when it gets served up, the difference is some people will make it out alive from that situation, and some (many) won't...


"And God said, Let us make man in our image �and let them have dominion �and all the creatures that move along the ground".
Genesis 1:26
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574488
05/01/22 06:23 PM
05/01/22 06:23 PM
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Armpit, ak
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Who is John Galt?
Re: Need to buy a house Wait until September [Re: Dirt] #7574582
05/01/22 08:07 PM
05/01/22 08:07 PM
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mn north of blakely
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Steven 49er Offline
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Does an
Originally Posted by Dirt
Chancey, I wouldn't worry too much about. hyperinflation, just high inflation. There is usually more involved than increasing the money supply by even 20% a year. We have had 50 some years of 1971 fiat currency and most years didn't have inflationary problems much less create hyperinflation.





m.



Did you forget about the 70s and late 80s? Do you realize they changed the way they calculate inflation after that? Do you know what the inflation rate today would be if if was still calculated using the same metrics? How about what would the inflation rates have been the last twenty years using the same metrics?

Hyperinflation is a very real possibility. Before I'm dead I expect the FED will have 30 trillion on its balance sheet, in fact, I expect it within this decade. Most likely I'm wrong and surely hope I am. But I don't think so.

There is a big difference between now and the 80s when Volker stunned the world by raising rates and putting the brakes on the economy. First off he had conviction and balls, secondly the world wasn't awash in debt like now.

We will see.


"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574585
05/01/22 08:08 PM
05/01/22 08:08 PM
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mn north of blakely
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Steven 49er Offline
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BTW Fannie and Freddie are big players in the mortgage markets again, there are still interest only loans being written, ARMs are still a possibility and judging by the people I see buying 350k plus homes NINJAs are that far off either.


"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
Re: Need to buy a house Wait until September [Re: Steven 49er] #7574597
05/01/22 08:21 PM
05/01/22 08:21 PM
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Armpit, ak
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Dirt Online content
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Originally Posted by Steven 49er
Does an
Originally Posted by Dirt
Chancey, I wouldn't worry too much about. hyperinflation, just high inflation. There is usually more involved than increasing the money supply by even 20% a year. We have had 50 some years of 1971 fiat currency and most years didn't have inflationary problems much less create hyperinflation.





m.



Did you forget about the 70s and late 80s? Do you realize they changed the way they calculate inflation after that? Do you know what the inflation rate today would be if if was still calculated using the same metrics? How about what would the inflation rates have been the last twenty years using the same metrics?

Hyperinflation is a very real possibility. Before I'm dead I expect the FED will have 30 trillion on its balance sheet, in fact, I expect it within this decade. Most likely I'm wrong and surely hope I am. But I don't think so.

There is a big difference between now and the 80s when Volker stunned the world by raising rates and putting the brakes on the economy. First off he had conviction and balls, secondly the world wasn't awash in debt like now.

We will see.


No, Yes, maybe 20%, double probably. Still not hyperinflation.

"Hyperinflation refers to rapid and unrestrained price increases in an economy, typically at rates exceeding 50% each month over time."


Who is John Galt?
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574606
05/01/22 08:28 PM
05/01/22 08:28 PM
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If mortgage rates went to 10% half the houses with loans would try to sell because no way many of these families can 3x their interest unless banks started doing 40-50 year loans. House loans at 18%, such as in 1981, forget about it, game over.


"And God said, Let us make man in our image �and let them have dominion �and all the creatures that move along the ground".
Genesis 1:26
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574622
05/01/22 08:44 PM
05/01/22 08:44 PM
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Dirt, I know what the definition of hyperinflation is.

PC, let's forget about homeowners. If rates on government bonds were allowed to go to 5 or 6% it will all be over


"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574648
05/01/22 09:00 PM
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There are many loan options available other than conventional that don’t require 20% down. I have owned several homes in not quite 20 years and have always put down as little as possible. I’ve always had loans with a fixed interest rate.

Re: Need to buy a house Wait until September [Re: jbyrd63] #7574683
05/01/22 09:34 PM
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Not gonna happen by September.

Re: Need to buy a house Wait until September [Re: jbyrd63] #7574703
05/01/22 10:10 PM
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PC, let's forget about homeowners. If rates on government bonds were allowed to go to 5 or 6% it will all be over


Good point!


"And God said, Let us make man in our image �and let them have dominion �and all the creatures that move along the ground".
Genesis 1:26
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574726
05/01/22 11:02 PM
05/01/22 11:02 PM
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Thank you so much again Gentlemen. Trying to run through all this on the computer at the hotel.

Question.......?

As far as I know the Banks are not loaning out any money right now to people that can't pay for them. They have to all have credit checks and a job.....correct? I know I did.

In 2008, that did not matter they were loaning to anyone that applied and so we got the 2008 crash.

Today, instead of the Banks loaning out money for home loans, the FED government is giving free money away in the form of stimulus and also maybe free school loans....?

That amount of money is much much higher than what was loaned in 2008, so when the SHTF this time, the scenario will be similar, but much worse b/c it affects more people?


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Re: Need to buy a house Wait until September [Re: jbyrd63] #7574739
05/01/22 11:19 PM
05/01/22 11:19 PM
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james bay frontierOnt.
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There is a tipping point where the gov't cant bail itself out anymore.


Forget that fear of gravity-get a little savagery in your life.
Re: Need to buy a house Wait until September [Re: jbyrd63] #7574746
05/01/22 11:27 PM
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According to Google, the US still has by far the most gold reserves by a big margin compared to other countries.?
So, if this is a fact, then there is no way that the dollar will change as the worlds currency anytime soon……..is this logic reasonable?


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