DAY AFTER CHRISTMAS
After the festivities there's a corporate "sigh of relief" that's almost audible. "It's over! Let's get back to normal (whatever that is)." But everybody has awakened to the media pounding away at the mortgage crisis that seems to refuse to go away. It is causing ripples (tsunami waves?) all through the economy. The question is: "who caused this, anyway?"
Well, according to conservative economists it was caused by government intervention. I agree. When governments interfere in a free market economy, it's for the purpose of manipulation. The "poorer" among us have to be "equal" to the wealthier, it is said. So, governments devise plans in order for the poorer to be able to buy housing; and, in so doing, governments "guarantee" loans to the poor, thereby creating debt rather than creating wealth. And this has the effect of driving down values and erasing equity.
When equity is reduced or eliminated, folks have no reason to continue paying off their mortgages, so they default. When their homes have little worth, why spend hard-earned money on them? They just walk away. And the government, having insured the loans in the first place, have to foreclose (or the insured lender has to foreclose), and the near-worthless property deteriorates into nothing.
This is happening in a number of locations around the country - and around the world. And the central banks have to borrow from the fed. And the fed just manufactures more liquidity, which, in turn, drives down the value of the dollar world-wide. It's not a pretty picture. It looks as if we're going to have to bite the bullet and get back to free market economics.
Here at Tyler Texas real estate we still have value in real property. Prices are holding steady, and owners are happy with their equities. This is the place to buy and feel relatively safe with purchases of real estate. We may have some inflation coming ("may" is probably not strong enough), but folks might go ahead and take their losses elsewhere, and buy property in Tyler, Texas where equities are still building. Chances are you'll be fine should you take the advice.
Well, according to conservative economists it was caused by government intervention. I agree. When governments interfere in a free market economy, it's for the purpose of manipulation. The "poorer" among us have to be "equal" to the wealthier, it is said. So, governments devise plans in order for the poorer to be able to buy housing; and, in so doing, governments "guarantee" loans to the poor, thereby creating debt rather than creating wealth. And this has the effect of driving down values and erasing equity.
When equity is reduced or eliminated, folks have no reason to continue paying off their mortgages, so they default. When their homes have little worth, why spend hard-earned money on them? They just walk away. And the government, having insured the loans in the first place, have to foreclose (or the insured lender has to foreclose), and the near-worthless property deteriorates into nothing.
This is happening in a number of locations around the country - and around the world. And the central banks have to borrow from the fed. And the fed just manufactures more liquidity, which, in turn, drives down the value of the dollar world-wide. It's not a pretty picture. It looks as if we're going to have to bite the bullet and get back to free market economics.
Here at Tyler Texas real estate we still have value in real property. Prices are holding steady, and owners are happy with their equities. This is the place to buy and feel relatively safe with purchases of real estate. We may have some inflation coming ("may" is probably not strong enough), but folks might go ahead and take their losses elsewhere, and buy property in Tyler, Texas where equities are still building. Chances are you'll be fine should you take the advice.
posted by John and Flo Martin at 3:12 AM
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