Failure Of Seigniorage As Well As Failure Of US Treasuries As An Investment Means Leasing Of Homes Will Be Commonplace

Dawn Kopecki in Bloomberg article BofA Segregate Almost Half of its Mortgages Into ‘Bad Bank,  relates that Bank of America, BAC, the biggest U.S. lender by assets, is segregating almost half its 13.9 million mortgages into a “bad” bank comprised of its riskiest and worst performing “legacy” loans, said Terry Laughlin, who is running the new unit.

Irvine Renter writes the insightful article B of A To Establish Special Home Investment Trust As A Bank To Hold Toxic Assets and questions: “Will lenders maintain their properties to a reasonable standard, or will they all become slumlords?”

I expect to see a kind of leased property living like that presented in the 1973 movie Solyent Green.

In my article European Leaders Affirm Angela Merkel’s European Economic Governance And Austerity Plan, I communicate the concept that Neoliberalism was the political and economic regime that governed mankind from the time that the Free To Choose economic theory of Milton Friedman replaced the gold standard in the early 1970s, to the exhaustion of Ben Bernanke’s quantitative easing 1 and 2 on February 22, 2011, which was reflected in the fall in value of the distressed securities, which underwrote quantitative easing, and which are approximated by the Fidelity Mutual Fund FAGIX. It was on February 22, 2011 that the value of FAGIX, and world stocks, ACWI, both fell lower.

The fall lower in world stocks, ACWI, commodities, DJP, world major currencies, DBV, emerging market currencies, CEW, documents the failure of seigniorage of the neoliberal economic and political regime, as well as entrance into Kondratieff Winter on March 11, 2011. It is reasonable to expect desperate economic conditions and great austerity with evaporation of lending and falling investment prices.

US Government Treasuries fell lower in an Elliott Wave 3 Decline, as reflected by the 30 Year US Government Bond, EDV, trading lower from 80.46 to 78.40; and the 10 Year US Government Note, TLT, trading lower from 92.37 to 91.55.  The beginning of the Elliott Wave 3 Down in US Treasury values means the likelihood of failed Treasury auctions. We are witnessing the end of credit as it has traditionally been known. Both bank lending and home lending will be a thing of the past.

Failure of seigniorage as well as the failure of US Treasuries as an investment means leasing of homes will be commonplace.


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