Re: Traditional man and country
Not to take anything away from a free market system since the concept sounds great on paper.... but since there are power hungry people involved, chances are it's not really free.
Here is a chart that shows how the Fed controlled the interest rates on the money that it circulated between 2001 and 2008.
http://www.bankrate.com/brm/news/fed...rest-rates.asp
The fed's fund rate is the interest rate banks charge each other for loans.
The prime rate is usually 3 percentage points above fed fund's rate. This is the rate of interest at which banks lent to favored customers (people with high credibility, wink, wink)
This chart shows how overpriced the real estate market was due to the availability of "easy" money.
http://online.wsj.com/article/SB1240...%3Dinteractive
Factor in what happened in september of 2001 and draw your own conclusions.....
Now imagine that you signed to a mortgage that was 3 times the actual worth of the house. You are making payments (with interest) for something that is depreciating so fast, you might as well have never bothered working in the first place.
Not to take anything away from a free market system since the concept sounds great on paper.... but since there are power hungry people involved, chances are it's not really free.
Here is a chart that shows how the Fed controlled the interest rates on the money that it circulated between 2001 and 2008.
http://www.bankrate.com/brm/news/fed...rest-rates.asp
The fed's fund rate is the interest rate banks charge each other for loans.
The prime rate is usually 3 percentage points above fed fund's rate. This is the rate of interest at which banks lent to favored customers (people with high credibility, wink, wink)
This chart shows how overpriced the real estate market was due to the availability of "easy" money.
http://online.wsj.com/article/SB1240...%3Dinteractive
Factor in what happened in september of 2001 and draw your own conclusions.....
Now imagine that you signed to a mortgage that was 3 times the actual worth of the house. You are making payments (with interest) for something that is depreciating so fast, you might as well have never bothered working in the first place.
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