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money as in paper form merly represent gold in the countrys vaults so they cant just print more paper if they dont have the gold. thats what germany did after ww1…i think? but it got them inot more trouble.
I understood almost everything up to 1:13 - when the narrator brought up “mortgage backed securities”. Can someone define what mortgages are, and also what are mortgage backed securities?
Why did the housing market decline?
What are interest rates?
What are cheap loan deals?
Overall. Not enough definitions.
nice vid man!
five stars!
Because that decreases the value of the dollar - because more money in circulation means less scarcity. It would cause inflation and prices will rise.
As for me, I’m 38 years old and I’ve always bought EVERYTHING with cash, I detroyed my credit card when I was 22 and never purchased a house. But I came pretty close. Thank god I didn’t..
The average home in a safe area in Southern California is around $400k-500k, with prices rising every month. People in California who had any hope of getting into a home felt they had to get in or forever loose the oportunity. It’s the subrime mortages that was the solution and trigger for the increasing home prices. A lot of people had good credit but lacked the rediculous average downpayment monstrosities for these homes. Leveraged financial system amplified an otherwise benign collapse.
The average home in a safe area in Southern California is around $400k-500k, with prices rising every month. People in California who had any hope of getting into a home felt they had to get in or forever loose the oportunity. It’s the subrime mortages that was the solution and trigger for the increasing home prices. A lot of people had good credit but lacked the rediculous average downpayment monstrosities for these homes. Leveraged financial system amplified an otherwise benign collapse.
The rising prises made purchasing a home a mere dream for most. You see, it’s nearly impossible for an individual to save 15 percent on a $600,000 3 bedroom, 1500 sq. ft. home. Sub prime mortgages made it possible for people to purchase a home that seemed to be increasing in value by the week. Painting them all as low income morons is extremely fucked up. Afterall, how many people ignore a bargain. Intead why don’t you blame the assholes who opened the door to such bargains in the first place.
This video is not completely true. For those who know why , there’s no need for me to explain. And for those who don’t, you need to do a little more reading.
I Don’t Understand, Why Don’t They Just Print More Money ? :’(
Thirdly, as you again rightly say, this is a very complex and intricate issue to deal with. I am really interested in real solutions. But, I don’t think any is forthcoming. The same senarios are played over and over again.
My solution would be, very briefly: let’s halve the world population, educate the inhabitants of the earth, find a new way to go on/ about our lives, putting respect, responsibilty, equality at the fore front.
I know that some of you will be up against me on re-creation.
Well, this was the right thing to do really. I don’t understand why the richest people on earth everywhere couldn’t think of it. I guess, they are only after the power that only the money can beget. The rest of the time they keep singing, “we are all in this together”-rightly said.
Obama’s ideas are very good, realistic and clever. But he is up against very powerful individuals. It remains to be seen what will become of him. I personally wish him well.
see next.
Well of course it could not go on forever. It had to stop sometime. And it is here and now. Money have been printed, people spent it, and now they can not pay it back. The banks books are turned upside down. They could no longer balance their books. The result is, what you see on the TV and radio.
Secondly, the “Kitty” idea. I don’t know if you heard “Obama Congress Speech”. But he has allocated $75 billion to those people who are in dire need of money.
see next.
The western world, nowadays, is dependent on the “service industry”. In other words, we, todays’ generation do not really create any wealth at all. It is all fantasy, eg. any fancy ideas sell. Nothing has been created but hey! presto, a desire is satisfied. Who creates the money? The government-of course. The government oils the cogs of the big wheel, as long as they can keep the people happy. So, they print money, offer it to the people in terms of credit, and people fall for it.
see next.
hi poenaensis,
I hope you are well.
Firstly, I agree with you on the 1929 depression, and the way USA got out of it. However, the times have changed considerably since then. Nowadays, there is great wealth in this world. As you rightly say, “monetary value of money is not wealth”. What can be created by the workers, as you say building houses, producing goods, technological progression etc. are the things which the workers create in “real money” terms.
Pls see next entry.
Contd. I agree that the problem is caused by the greed of the already rich. It is always the banks taking insane risks. I also agree that the ordinary person takes the hit. Solving the problem is not easy, but it is important to remember that no cities have been flattened, no crops been plaugued by locusts, or no new super virus has emerged. If we look at how FDR got America out of the Depression, it was through maintining and increasing public projects, things that increase long term wealth.
Contd. The best way is to legislate. To keep peope in their houses force the banks to give them a rate at their previous value rather than forclosing. To keep people in work enforce reasonable lending rates. Unfortunately, there is no equal amount of money in the city slickers to that which has gone from ordinary people’s pockets. It has literally vanished as people adjust their evaluation of the weath. This time it was on house prices. In 1929 it was the stock market.
I think you make a valid point, but you miss the biggest one. The money is not wealth. Houses, food, medicines, technology, oil, raw materials. These are the real wealth. Previously, the monetary value ascribed to particularly the house market was too high, and the predictions made by the banks to the future price were also incorrect. Therefore the banks said they had money that they didn’t. If we wan’t to help people keep their houses it doesn’t have to be through a common kitty idea.
Settimatti, thanks for the video it surely made me think. I hope it will make others think too and everyone will contribute.
Best wishes.
What I don’t understand is? They (the rich people) see that the people (sub-primes=workers who produce the real welath all over the world) are suffering, and yet none of them are giving up their wealth. They are not saying “look I have £500 million I would like to donate it to a common kitty, and this should help the difficulties they are in”.
You see according to “Einstein” nothing can be created from nothing,and nothing can be destroyed from something.
Please see next entry.
So, the answer to the question “where did the money go?”
The money went to the “Rich Peoples’ Accounts”. I don’t think they (the money) disappeared.
Who are those people?
Well, I don’t want to be shot at by their hit-man by disclosing their names, but, if you look around you will see them every day in the newspapers.
Their wealth,if you calculate their fortunes, will be equal to the alleged lost money in the money markets.
Please see next entry.
Then, the whole bubble burst. The public could not pay the banks, as the banks borrow from each other in their daily transactions, in turn they could not settle their accounts with each other. Distrust creeps in. As the banks are obliged to keep the rich peoples’ money in their accounts, they called up the money from the public. The public does not have money. So, they (the members of the public) lose their homes, cars, credibilty etc.
Please see next entry.
So what happened?
The money, indeed, did not go to the sub-primes (the general public). In fact, the money went to very few individuals who played the stock market game, deceitfully. As you may have heard in the news, they accumulated millions if not billions of pounds/dollars in their accounts.They are known as “insider traders”. Very powerful men until their veils come off.
Please see next entry.
Thanks for your replies, Settimatti. I, surely, appreciate it.
However, I think that, in the last couple of days, the answer to my question has been clarified in the mass media.
ok that didnt make any sense
nwm