Tuesday, August 11, 2009

Waking up Homeless

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

There is some debate as to if this entire quote can be attributed to Jefferson or not but it got me thinking...

If being "homeless" means not owning real property, how many Americans are homeless?

There are lots of folks who consider themselves "homeowners" but until they have the title in hand they are nothing more than renters. They have rented the bank's money (or the taxpayer's money in most cases) and pay interest--we call this a mortgage. If they fail to pay that rent to their landlord they are evicted.

Add to that most folks have little or no equity in their homes (combination of market conditions and financing) and all you have is a series of rent checks with no prospect of real ownership.

I fall into this bucket as well. And after living fairly conservatively over the years and saving for a sizable down payment, I estimate I have a 25-30% interest in my home. The bank owns the rest and if I slip up the bank owns 100%!

The illusion of "ownership" is maintained to keep Americans in their homes paying rent to banks and paying taxes on the market value of their homes--the value most will never realize unless our values change.

The manipulation of the dollar, combined with mass consumerism has put Americans in a corner. Families are stretching just to get by while banks continue to reap rewards backed by the Federal Reserve which can spend the people's money as it chooses.

The current institutional Fed rate is between 0% and 0.25%. According to bankrate.com, the current average mortgage rate is 5.49%, the current average CD rate is 1.35%, and the current average credit card rate is 11.20%.

So thinking back to Thomas Jefferson's quote, I wonder when this financial crises finally hits bottom, how many Americans will "wake up" homeless?

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