Mish has a very dim view of the operation of the Fed. My problem with it remains that he is mostly correct. I cannot come out and say that the Fed, as developed by the Keynesians and Mometarists, is the worst mistake adopted by the Government; though I feel that way about 5 or 6 times a year. The Federal Reserve is the Bank for Bankers, and should maintain a policy of sound collateral policy. The Concept that such a policy does not exist at the Fed should embarrass Us all. All you need is State or Federal registration of charter, and the Fed will extend one Cash; some States will grant one such for extremely little Cash. The greatest hazard of the Fed, though, may be the failure to acknowledge their own failings. The Fed refuses to publish their own record of loan failures, a record which must be worse on Paper than the Consumer Credit industry. It would also be nice if they would record publicly their Recidivist rate of bad loan lending. My major point here must be a request to know How Much Money has the Fed cost Us in bad loans over the years, as Private deposits make up their collateral. Just wait: they will explain I do not understand fractional banking; yet, an implied investment is receiving a negative rate of Return.
Go through all the links at this site, then ask Oneself whether ‘Own to Rent’ policy would ever be a good policy. My understanding of the Concept may be flawed, but it is much like Fed policy, without and resort to collateral outstanding. I sort of like the idea, though, and believe the only element lacking is uniformity. I would have a law or regulation by national entity insisting that all Mortgages include such provision up-front, with initial listed provision of Pricing and Cost; this means reduced level of monthly payment, and largesse and extension of the added mortgage obligations. Only these provisions could make ‘Own to Rent’ a viable financial element. Anything less would lead to another round of second mortgage foreclosures.
Reading this blog entry depresses me. The current level of political performance raises my ire, and this is because of the major dependence on Face–like the Chinese. The Post states that the major impediment to the Obama use of the Veto remains the factor of a Democratic Congress, and the chance of an Override. Neither should have the slightest influence in the use of the Veto. It is a Power granted to the President to forestall legislation which is particularly unworkable from an administrative Standpoint. I will imitate the drunks at a local bar, and state that if I were President; I would have a dozen overturned Vetos by the end of my term of office, all based simply on my disagreement with the terminology of the legislation. Of course, I have always been considered anti-Social. lgl