The Fed Is Helping Facilitate Trailer Park Evictions
BY TYLER DURDEN
WEDNESDAY, SEP 08, 2021 – 09:01 AM
Authored by Michael Maharrey via SchiffGold.com,
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The Federal Reserve is helping corporate real estate investors evict poor people from mobile home parks.
NPR highlighted the growing number of mobile home part evictions. According to the report, real estate investors continue to buy up mobile home parks across the US. They then raise lot rents and fees, and evict residents who can’t pay.
As the report explains, the government makes this scheme possible with easy financing through agencies such as Fannie Mae and Freddie Mac. Here’s how it works in a nutshell.
A company raises rates and fees in a park. That makes the park more valuable. So they can now borrow more money against it, kind of like when you refi your house and get cash out of the deal. They pull out, say, $3 million, and they use that to go buy another mobile home park. And then they do that again and again. It’s a cascade of borrowed money. And often, these loans are backed by the US government. They provide very, very low-cost debt for these investors to get enough cash out to go buy additional parks. The loans have super cheap interest rates because they’re guaranteed by Fannie Mae and Freddie Mac, the government-backed entities at the heart of the US mortgage market.”
NPR gets part of the story right. In fact, it’s pretty impressive that they didn’t just pin the blame on “greedy capitalists.”
Nevertheless, the story completely misses the biggest player in this game – the Federal Reserve.
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This is yet another way the Fed distorts the economy, drives misallocations of resources, transfers wealth from the poor to the rich, and generally wreaks havoc.
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OK, the problem was identified by Ron Paul decades ago in his Presidential campaign.
Does anyone want to address the problem?
“Penny candy” is an example of the inflation of the US$.
Argh!
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