Emailed a Guy at Seeking Alpha About Canada and Collateral
I posted this email to a guy who frequents Seeking Alpha. He lives in Canada and is concerned about the housing bubble there and the tight money on main street here in the USA. He has posted at Business Insider as well.
Hey Doug, I have about 21 articles here. Read about collateral here where I say that treasuries, unlike what gold bugs say, are in massive demand for collateral for ccp (clearinghouse) trades.
The PMI [article] may prove to be like y2k or it could be a big deal. I learned about it from a real estate broker in Las Vegas.
I guess in Canada you have the 5 year roll over mortgage which is really easy money.
It is a momentum ponzi created by the banksters and their friends no doubt.
My article here shows that the Fed, missing the tool to raise interest rates like Volcker had, has to keep everything slow growth: How the Fed Is in a Box in Terms of Creating Sound Collateral. Read the two newer ones as well which show more of what they are up to.
I think low interest rates are controlled by JPM and the interest rate swap market. People take protection from interest rate rises and the banks take the other side, betting interest rates will stay low. The Fed has to keep interest rates low.
[Otherwise the banks would be on the wrong side of the bet!]
Inflation [fighting] tools that are left are capital requirements and open market operations and slow growth. They don't let much money flood main street, hence you see slow Christmas sales, etc. It is a form of austerity.
The interest rate swap market is massive in relation to the mortgage backed securities market. It is the biggest game in town and the Fed has to win and main street loses some. However, the alternative is another bank meltdown like in the S & L crisis only way bigger. The Fed should just come clean and admit all this and see if the people in the US accept it or not.
Doug, I don't have a crystal ball, but we have high cost of living through speculation on futures markets, and we have austerity. It could last for a long long time.