Andy’s Newspaper column archive
UNDERSTANDING HOW WE GOT HERE ©
With the economy slowing into recession there is a lot of finger pointing. Dumb consumers, unscrupulous lenders, fraudulent loans etc. There is plenty of responsibility to go around but lets put the finger where the true culprit lies. Investors. They are driven to maximize their return on investments and the fact is the higher the risk, the greater the potential for loss. If they weren’t willing to invest for these higher returns, much of what you see happening today would not occur.
I don’t fault the hedge funds or derivative markets, just understand when they collapse, these investors should accept their fate without demands for the rest of us to rescue them. There are plenty of high buildings for the weak of heart who can’t weather the storms. There’s also Chapter 7, 11 and 13 so you can come back and start again. You won’t even have to start at the bottom, maybe.
There’s more. What makes you think fiat money won't explode some day. Thank goodness the government can print money. It is also not a good thing that there is no confusion between the Federal government and the Central Bank, known as the Federal Reserve.
Whenever I read or hear of the Fed I wonder if people understand which one they are talking about. Seems to me the name for one of these two should be changed.
History has shown that the public has been getting scammed in to accepting more and more debt. One of the scams was in the 80's when you could suddenly deduct interest on your income tax return on credit purchases. Once the public was hooked on this one, the rug was pulled out from under them by disallowing the deduction and it has now exploded.
When your friends at the Fed, (you figure it out), established the graduated income tax with no index for inflation, you got scammed again.
When the Fed changed the rules annually on social security, taxes, inflation reporting, and allowed our technology advances to go abroad in this and other hemispheres we got scammed.
The usury law has essentially gone by the wayside and credit card interest rates alone have climbed to the 30% area and in some cases beyond.
This started in Utah with the advent of industrial banks like Capital one, Sears Bank, MBNA etc. This slick operation provided FDIC insurance without FDIC oversight.
So now the guilty parties are the sellers of the products not the schemers who provided the programs. I find it hard to imagine that more licensing is the solution. Rather it should be at the level where the sales and marketing programs are generated. If investors weren't so bent on higher and higher profit margins that they loosen the rules for loans they are willing to fund you would have less problem.
If more licensing is the answer why are people who can’t speak English getting licenses, can’t use the numbering system and demand contracts in their own language rather than English. As a real estate broker, lender, escrow officer and credit repair specialist in the past I and others can attest to the fact this what is written here is more of the problem than a need for another license. There is no direct translation from English to any other language, even British And Australian English.
I tire of the idiots who act like experts telling us that common sense doesn’t apply in these matters. Rather they just want what they want no matter the consequences.Lastly, when you can't make payments on your mortgage or credit cards it really makes sense to increase the interest rate resulting in guaranteed non payment. The greatest scam has become establishing so many rules, laws and regulations where the public is confused about what is legit and what is not that in effect what is legit is only true because governments ability to enforce the rules has limits.
This means the rules are selectively enforced. When the time comes we are all in danger of crimes large and small. The solution? Ask yourself who wants to be elected to fix this mess because if you don’t it will only grow and fester.
Andrew Alberti Jr