Peter Schiff And The Coming Housing Collapse: The Fed, Instead Of Lehman, Owns The Mortgage Market - Forbes

Peter Schiff And The Coming Housing Collapse: The Fed, Instead Of Lehman, Owns The Mortgage Market - Forbes

I responded to this article in this way because I don't have a crystal ball:

Here is the problem. There is a lack of quality AAA paper. There is a need for it in order to keep banks making profits lending to traders, etc. There is a real economy that is deflating and a bankster economy that is inflating.

So, I can see Bernanke's point of view.

It would be nice to get rid of the derivatives market and we would not need Bernanke to do what he is doing. But we can't. We are stuck with it.

So, then Schiff could ultimately be right. The next housing bubble (which is starting with cash hedge funds) to create more collateral could be short lived. Then the crash would be on, big time.

But if that is the case, cash would be king not gold. You can't eat gold.

Sometimes I don't know what to think about Schiff.

Important Update:

I have written an article on Seeking Alpha detailing how Ben Bernanke plans to produce more quality collateral as banks seek to protect themselves going forward. Congress will have to go along with slapping a guarantee on the mortgage backed securities or face a crashing stock market and Bernanke's wrath. Bernanke intends to make MBS into pristine collateral.

Thererfore, Schiff's guarantee of a housing crash will likely be preceded by a housing bubble worse than the cash only bubble we have now.

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