Reinke Faces Life

http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

The Government-Created Subprime Mortgage Meltdown
by Thomas J. DiLorenzo

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The thousands of mortgage defaults and foreclosures in the “subprime” housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call “communities of color” that they might not otherwise make based on purely economic criteria.

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Ahh, yes, the gooferment creates the problem, engages in other policies the worsen it, and then are Casablanca-style shocked to find there’s a problem. And, of course, the fix is — you guessed it — more gooferment. Sigh. When do we get off the treadmill?

Buy gold. The real thing. Bullion coins. The gooferment can’t print more of those.

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http://www.breitbart.com/article.php?id=D8REP5LG3&show_article=1

Fed Urges Loan Holders to Avoid Defaults
Sep 4 01:14 PM US/Eastern
By MARTIN CRUTSINGER
AP Economics Writer

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WASHINGTON (AP) – The Federal Reserve and other banking regulators issued special guidance Tuesday urging loan service companies to work with borrowers in danger of defaulting on their home mortgages.

The new guidelines are not mandatory, but the regulators expressed the hope that companies that collect payments on mortgages would heed the advice.

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And what happens if they don’t want to take advice from these unelected minions of the rich and powerful?

Taxpayer pays?

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FROM LINKEDIN ANSWERS:

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RE: Tax deductions against home loans (mortgage)
From:Lubna Kably
Senior Manager at Ernst & Young
International tax consultant and newspaper columnist
India
RE: Tax deductions against home loans (mortgage)

In India there is a tax deduction available against home loans up to a certain limit. Interest payments above this do not get the tax relief.

In US, there is move to introduce a legislation to remove the mortgage interest deduction on huge houses (more than 3,000 sq feet). This of course stems from the fact that large houses lead to higher energy consumption and gas emissions and this tax policy is seen as a “green policy”.

What is your view on tax sops against housing loans.

1) Should there be a ceiling limit against the interest payable
2) Should there be a ceiling limit in terms of square meters of property
3) Should the entire interest payment be allowed tax free?

I also have an additional question for LI members from the US. Am I right in assuming that at present the entire interest payment is tax deductible?

Thanks in advance. Your comments will help me in writing my next newspaper column.

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On 9/1/07 11:41 AM, John Reinke wrote:
——————–
Taxes are nothing more than theft! How the gang calculates it and asking opinions about the that theft are akin to a mugger asking you if you want to be hit with a pipe or a bat. That being said, unless one is willing to resist, you have to go along with the gag!

You should NOT assume that mortgage interest is ALWAYS deductible in the US. Two things jump to mind: Alternative Minimum Tax where deductions phase out AND refinancing situation where deductibility is limited. Also, in 2008, we’re going to the polls to elect a President. Only one of the candidates Ron Paul can be seen as pro-freedom.

In doing any financial planning, I’d suggest an team approach is needed — lawyer, accountant, and financial investment adviser. They should be three separate people because you need diversity of viewpoints. (I’ve seen some conflicts of interest when you accountant sells investments or the lawyer does accounting.)

Count your change and use your fingers. Where money is concerned, strange things happen.

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RESPONSE:

Hi John

Thanks so much for your reply and interesting insights.

Have a great weekend.

Best
Lubna

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Reinke replied:

Well, I’ll assume “interesting” is a polite way of saying “what a nut job”. :-) Thanks OK. I’ve been called much worse to my face. But as a firm believer in the non-aggression principle of the libertarian movement (i.e., I foreswear the first use of force to attain my goals. To be free, I grant to all the liberties I wish to have myself.), I think you should be free to think whatever you like. When you do write that article, please send me a like. I’ll put it on my blog. I can only guaranty you one extra reader, but you might be surprised how many people read my blog. (I average about 150 per day.) I guess there are a lot of visitor who wants to see a raving loon. :-) Best wishes.

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Lubna Kably wrote:

Hi John

Will def send you the link. This will be published end Sept. What is your email id?

And no, it was not a “nutty answer”. The bit about AMT is interesting. In India, fortunately, Minimum Alternative Tax, which works on the same basis is applicable only to corporate entities and not individuals – fortunately.

Thanks
Lubna

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Reinke replied:

Here’s that email address: XXXXXXXXXXXXXXXXXXXX

Hey, you all are lucky not to have an individual AMT. One of the tax resister’s popular arguments here is that in order for the Income Tax to be Constitutional that it only applies to “corporate entities”, not “sovereign individuals”. It’s hard to say which sets off people more: the income tax or the property taxes. The politicians do a fine job of “sticking it” to us. The really funny thing is that the biggest most-damaging tax is the largely unrecognized “inflation tax”. People are stupid. The politicians, abetted by the big media and the gooferment skoolz, “tax” every dollar by the unrestricted creation of more dollars. And, people just don’t understand it. That’s the sad part. And, it’s a “global tax”. That is the yearly monetary inflation impacts everyone who holds a dollar; not just the people in the US. Amazing how people don’t get it.

L8R,
fjohn

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http://www.masternewmedia.org/news/2007/09/01/the_federal_reserve_is_monetary.htm

September 1, 2007
Robin Good
The Federal Reserve: Is Monetary Power Being Replaced By Private Economic Global Interests?

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In the present world financial system turmoil generated by the collapse for “sub-prime” mortgage bonds, the US Federal Reserve System functions, as it always does, with private meetings and telephone conferences with the great financial houses, deciding in apparent secrecy whether to increase the money supply and government lending to financial houses or whether to raise or reduce interest rates.

***AND***

I am certainly not an expert at these matters but if I have to look and report at what mainstream media does not report about, while inviting each one of us to question and research in greater depth all such issues, this looks definitely like something on which we should all ask some more and better questions.

***AND***

Should the US, reconsider the makeup and makeup of the Federal Reserve System so that it can serve the people of the United States in a meaningful and fully transparent fashion?

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I love it when someone “discovers” that they (we) have been getting screwed since 1913 by a monopoly.

The monied elite and the politicians have conspired to “monopolize” “money”. The monied elite gets the license to print money and do fractional reserve banking. The politicians get all the money they want to spend with having to raise taxes. (The inflation tax is a silent killer to savings.)

We could consult the Constitution for what it says about the Federal Reserve.

At the very least, we could follow the example of Andrew Jackson and end the “federal reserve cartel”. Ron Paul is just the fellow to do it.

When you are in a hole, stop digging!

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From a radio show by <what was that dude’s name>
about college versus retirement

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The host made an excellent case that parents should worry about their retirement more than their children college.

Retirement is paid for upfront. Assuming your retire at age 65, you must have all your “savings for retirement” completed at that point.

College for children can be paid over the child’s lifetime. Potentially 45 years to spread it out over. Student loans at low rates of interest allow this to happen.

Your estate can be used to pay off student loans. Student loans can not be used for your retirement.

College’s ROI is over valued. There are cheaper ways to get a college education. Specifically, community colleges. Specifically, get a job where the employer pays. Specifically, the GI bill. (Note, imho, that could cost you a child. Too expensive.) Specifically, testing to get required courses waived.

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Convinced me!

Especially the ROI. Get a degree in basket weaving for $160k? To earn no more than a high school grad? And some jobs don’t require a degree — sales for instance.

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http://www.lewrockwell.com/peterson/peterson16.html

Peterson’s Law of Inflation
by William H. Peterson

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But still, would governments consciously inflate against their own citizens? The thought was too dismal, the theory too disconcerting. We never got to check out the connection, if any, between inflation and public debts, for we left the Museum of Moneys of the World – that monetary graveyard – for the purer air and traffic of New York’s Sixth Avenue and fished in our pockets for a fifteen cent subway token to take a ride that had cost a nickel not so long ago.*

*Current 2007 price of New York City subway ride is $2.

This article was originally published in National Review, December 19, 1959.

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I’d suggest that inflation is a mandatory element of any financial plan.

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http://www.reuters.com/article/inDepthNews/idUSN2040778220070827?feedType=RSS&feedName=inDepthNews&rpc=22&sp=true

Flips, scams blamed in California housing decline
Mon Aug 27, 2007 3:08AM EDT
By Christelyn Karazin

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The Inland Empire, 50 miles east of Los Angeles, was a latecomer to the housing boom in California as buyers squeezed out of high-price coastal Los Angeles and Orange counties found large homes going up on the region’s vast supply of vacant land.

And it has been one of the most hard hit by foreclosures.

The Inland Empire’s combined Riverside and San Bernardino counties reported the fourth highest number of foreclosure filings of any of the nation’s 229 largest metro areas in July, behind Atlanta, Los Angeles and Detroit, according to market tracker RealtyTrac.

OWNERS GO ‘UPSIDE DOWN’

Survivors of Towne Square find themselves not only with unsightly, empty properties next door, but also with home values plummeting amid the fire sales on foreclosed homes.

So selling and moving to a better neighborhood is not much of an option because many owe more on their mortgage than they would get for the sale — what the industry calls “upside down.”

And real estate agents note that California’s market is likely to rebound as it has in the past, underpinned by high population growth.

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OK, the gooferment created the real estate problem with fiat currency that allowed artificially low interest rates to start with and followed it up by being up to its collective nose with “regulation” and interference the market.

Solution. The gooferment should exit stage left.

Tough, yes. But giving them a role in fixing it will bring even more “unanticipated consequences”. Some time it’s tough to take the right medicine but it’s better for us in the long run.

We know that the “tough love” solution isn’t going to work so what should we do?

* If you have an ARM, refi before you get ARM-twisted (i.e., have to refi when rates are “bad”).

* If you have property, consider refi in terms of your long term financial strategy. Rick Edelman makes a good case for having your estate pay of your mortgage so you have flexibility. Dave Ramsey makes a good case for being debt free. I won’t quibble with either one.

* If you are renting, look for “fire sale” bargains.

* If you are investor, look for absolute value bargains.

* Anticipate low rates for a while with tightening credit standards.

* Anticipate recession and declines in various markets.

imho

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http://www.lewrockwell.com/blog/lewrw/archives/014893.html

August 26, 2007
Top 8 Ways Hard Money Would Change Your Life
Posted by Chris Brunner at August 26, 2007 12:57 AM

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2. No more Inflation Tax for the poor

Inflation occurs when the Federal Reserve expands the money supply by creating more money. Each time this happens, and lately it’s been happening at a frighteningly rapid pace, the money that already exists – that is, the paper in our wallets and bank accounts – loses its value. This is why prices increase. Each time your money loses its value, it takes more and more of it to purchase the same goods. These guys literally make a living stealing our wealth and giving it to others. However, unlike Robin Hood, the recipients of this wealth tend to be people who are already wealthy, and the people who are hurt the most are arguably the poor. That is, the people who get screwed the most are the poor who can’t afford the rising prices – those on with minimum wage jobs or fixed-incomes. A hard money policy would put a stop to this by cutting off the Fed’s ability to inflate, or abolishing the Fed entirely.

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Never mind just the poor. What about me!

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http://thelibertarianforum.com/Videos/Ron-Paul-Federal-Reserve.html

Video: Ron Paul on the Federal Reserve – TheLibertarianForum
(Source: thelibertarianforum.com)
Ron Paul on the federal reserve bank.

Money is not a store as value as it is supposed to be. Ron give “Helicopter Ben” a rudimentary lesson in what is wrong with the current system.

* Congress unConstitutionally created a central bank and ceded all oversight of that bank to a private cartel to the detriment of the American people.

* The dollar is inflated year after year. This results in a 96% loss in purchasing power (Ron Paul’s number) since 1913. (Other statisticians say it’s 95% from 1970 to 2000). Regardless of whose numbers you believe the purchasing power of the dollar erodes dramatically impacting everyone , but especially the people least able to cope.

* Inflation is a tax. Hidden. Silent. This permits the Congress to spend without limit.

All financial planning must treat the USD as a depreciating asset. YMMV!

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http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/20/bcnswiss20.xml

Top Swiss banker attacks US lending standards as ‘unbelievable’
By Ambrose Evans-Pritchard and Yvette Essen
Last Updated: 12:15am BST 21/08/2007

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Switzerland’s top banker has warned of massive losses from the unfolding credit crisis, describing the collapse in US lending standards as “unbelievable”.

Jean-Pierre Roth, president of the Swiss National Bank, said market turmoil was far from over as tremors from the sub-prime debacle continued to rock the world.

“We’re certainly not at the end of the story. There are question marks surrounding the development of the American economy,” he said. “Something unbelievable happened. People who had neither income nor capital got credit with very attractive conditions. Now reality is striking back,” he said.

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No money down, low interest rate, no documentation.

Was it any wonder that the real estate market exploded. One way to avoid inflation, (i.e., the counterfeiting of money), is to buy real estate.

And I am sure the local komisars were not unhappy with the run up. In New Jersey, property taxes are based on “value”.

What a joke!

And, are we hurting America’s productivity by having people locked in a location by home they are tied to. That, as opposed to a rental apartment, where if they found a job in a different geography, moving was not out of the question.

Can anyone not in a city ever walk to work? Or, perhaps telecommuting is going to make a big comeback?

Having said that, perhaps now is the time to find bargains?

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