Mark at 338 – “The drop in home interest rates began in about 1983. “

Maybe, but they were still high in 1987 when we bought a house with 9% mortgage rate.

Bonddad has a great post on his blog that shows several charts concerning mortgage rates since 1970.

Interest Rates Aren’t That High
http://bonddad.blogspot.com/20…..-high.html

True about 87. They started their drop at about 19%. By 87 they were down to less then half. Big money likes 8 or 9% when they buy and sell in the money markets. When the fed pushed rates for the cost of funds index and the overnight bank exchange down for about a year and a half the housing boom really got it’s legs. Rates today compared to 87 are wonderful. Look at the big push in variable rate loan products in the last several years and the recent increase in the rates which is leading to the mortgage default problem. Any thought that this may have been planned? With rates the way they are on fixed rate loans today and Fan/Mae and Freddy/Mac do not do variable, isn’t it surprising that some consumers are losing their homes? Cheap houses on the market to buy low and sell high. Banks eat the difference and pass it on to us then scream to the federal government for bail out help and the fed uses our tax dollars to to do this. We pay no matter what and the rich got their opportunity to buy low and sell high. Shocking.

Maybe, but they were still high in 1987 when we bought a house with 9% mortgage rate.

Bonddad has a great post on his blog that shows several charts concerning mortgage rates since 1970.

Interest Rates Aren’t That High
http://bonddad.blogspot.com/20…..-high.html

1) I wrote you at Agonist about the Iranian Oil Bourse (a question). After today’s reading, no need to answer.

2) What goes unsaid here is that if Bush was so eager to support his boom on Iraqi Oil, and given his bull-headedness, then he must be more determined than ever to make his Iraqi War gambit work. If that means warring on Iran just to make it work, why wouldn’t he?

3) The next President, it seems, is going to inherit a failing, oil-based dollar and economy. You are advocating a deliberate course away from oil toward something exportable in the 21st Century (like solar panels, etc). At the same time, you seem to be envisioning a Fed tempted to print money (temporizing) while there may be a 10 year churning over the reliance on Euros over Dollars. What is your opinion on the window of opportunity to a) stabilize the downward economy and b) turn the economy around? Can it be done in a 4 yr or 8 yr Presidential term of office realistically?

4) You’re really good an explaining economy in a macro sense. Can you outline what your intellectual opposition might say about your thesis here? (Can you summarize how you might be criticized by other economic schools?) What I mean is this: you proposed that Clinton favored labor arbitrage and Bush relied on housing. Is that a commonly accepted view by economists, or is it contentious? IANAE.

As time went on and we exported our manufacturing base abroad, we became a nation who produced and exported only 2 things, weapons and dollars. Our currency had no place to go but down among countries who do not rely on exports to the US market. Fortunately oil prices remained somewhat stable which kept some pressure off.

Then the unthinkable happened, Saddam told the world in 2000 that all oil transactions with Iraq were to be priced in Euro. Chavez followed suit. As the Euro and Yen appreciated against the USD, OPEC realized they were being short changed, and the European oil producers were not too happy either, so oil prices were allowed to rise and Big Oil in America was thankful.

We invaded Iraq and assisted in a coup attempt against Chavez. Message to world, don’t mess with our dollar.

Yet our currency is worth nothing more than paper, maybe less. It can not last by brute force alone. What’s happening today is a crisis in the making that will lead to a New World Order, or at least a single global reserve currency, perhaps still the USD, but backed by something of value, which is OIL.

So China can still ship their products to us and receive our dollars. But instead of returning those dollars to us for treasury notes/bills/bonds that are in USD and at risk for depreciation, they can exchange them for oil certificates that allow them to buy oil at the current price in dollars at anytime in the future, and the prices are sure to increase in value as supplies run out, so it is a good investment.

How do we do this? We don’t have enough oil to do so. Oh, Iraq and Iran, lots of oil there. Wink Wink. Irans oil is located near the Saudi and Iraqi border, so we may just annex that and let Iraq and Saudi control it.
After all, didnt they say the world had to pay for their oil in Yen? Thats an act of war, an attack on our currency.

So we then let the Saudi’s and Iraqi’s issue oil certificates in exchange for dollars, for a fee that we pay them for being our bankers, just like we do with the Fed.

Now what to do about our debt. How do we print up more dollars without oil certificates to back them? Simple, we just get the Saudi’s and Iraqi’s to loan us adjustable rate oil certificates (we buy the oil at a price no lower than current or the market price when redeemed at maturity) at a fixed interest rate. They are then used to print the dollars we need in an amount equal to the current value of the certificate without causing inflation of the dollar, although it will cause inflation of oil prices. Big Oil and oil export nations applaud.

The number of oil certificates, fixed rate and adjustable rate need to be controlled based on proven and probable reserves of those countries authorized to issue them.

The world currency market is satisfied, Big Oil is happy, oil export nations are delighted, the dollar is stabilized, we can continue to consume without producing, gas might hit 10 dollars a gallon as oil prices hit 200 a barrel, but what the heck that is going to happen anyways. The next crisis is when the world starts running out of oil, in 30-50 years, but hey, leave that for the kids to solve.

I disagree with you Ian. The drop in home interest rates began in about 1983. Go look at the 10 year bond for the total history of it and you will see what I mean. The trend was sustained all through the Clinton years and would have continued with out the massive pressure that the republicans have put on forcing the market to change. The republicans are a bunch a rich people with lots of money to invest and the housing interests rates have been so flat for so long that they were going crazy. How can you buy low and sell high if it doesn’t change? Look at all of the attacks that have occurred on Fan/Mae and Freddy/Mac since Bush took office and the republicans had control of congress. The reason that China, Korea,Japan and others to a lessor degree bought our bonds was to use them for leverage in trade deals later on. Bush and company must have had a good laugh over this one. The other countries thought that we would get all shook up if they threatened to dump them on the market. Bush and company do not give a rip about long term threats as long as they could funnel the monies from the original bond sales to themselves. Iraq is just the cover story and an additional conduit for the money transfer. As far as discussions about the difficulty of replacing petroleum in our economy, I find this to be embarrassing and pathetic that a country that can do what we do in the area of technology development can’t solve this problem. Could it be that there is a clamp on technology because the rich do not want to lose the hold they have on us as petroleum addicts?
You give too much credit to the republican crooks in some places and don’t state the real facts in others. Good try though.

Booms and bubbles are two different things. The difference matters.

Of course technology has been spiked quite deliberately. Energy’s one place, telecom is even more obvious. There are others. People who have money from the way things are done now never want new ways that will cut them out to arise.

And when that grips a country, the country goes into the dust bin. There are now very non defense related techs that America leads in – not even telecom and the internet, which the US invented. Certainly not energy.

marymccurnin @ 265

That is me soon. My husband and I have not recovered financially from both of us being very sick at the same time-twice. We filed for bankruptcy and got sick again. We refied our house three times to pay off medical bills. Some days I get tired from worry. Also seems like no one wants to hire people over 50. Or we don’t know were to look. We don’t have far to fall. Maybe off the floor. The good news is that we are healthy. Apologies to those who have heard this story before but I am ever pissed.

(((marymccurnin)))

This is why US healthcare pisses me off so much.

Mary, maybe this could be useful:

“Try job-hunting web sites that are geared to older workers. Retirement-Jobs.com sponsors an age-friendly-employer certification program. H & R Block, Borders, Marriott, REI and Staples make the grade, as do regional employers that are committed to meaningful work, development opportunities, and competitive pay and benefits to workers 50 and older. Other age-targeted internet job boards include: SimplyHired.com/fiftyplus, RetiredBrains.com, SeniorJobBank.com and Seniors4Hire.org.”

mulligatawny @ 147

“I don’t think FDR is hated in the US. Though I could be wrong.”
He is another ‘divider’, just one we like better, but some folks hate him with a great passion, even today.

mulligatawny @ 147

“I don’t think FDR is hated in the US. Though I could be wrong.”
He is another ‘divider’, just one we like better, but some folks hate him with a great passion, even today.

FDR was hated as a traitor to his class in his day. And some Republicans excel at holding grudges.

The vast majority of Americans loved him. It’s true the rich didn’t like him, but whatever. They aren’t going to like whoever has to clean up this mess either – unless, of course, the US gets what a lot of countries got instead of FDR.

What I want for the US can be summed as “another FDR” very succinctly.

“I don’t think FDR is hated in the US. Though I could be wrong.”
He is another ‘divider’, just one we like better, but some folks hate him with a great passion, even today.

mulligatawny @ 147

“I don’t think FDR is hated in the US. Though I could be wrong.”
He is another ‘divider’, just one we like better, but some folks hate him with a great passion, even today.

FDR was hated as a traitor to his class in his day. And some Republicans excel at holding grudges.