Today one of the top economists warned King World News that “there will be hell to pay when this tragic collapse begins.” This is an incredibly powerful interview with the acclaimed economist, as he gives KWN readers around the world a look down the rabbit hole that central planners are taking us. Michael Pento then issued this ominous prediction, “This will end in total devastation.”
But people have to also understand where these bubbles come from, and the fact is that the whole progenitor of this cycle is the Fed. The Fed does this by providing low interest rates, and monetizing government debt.
So now we have a situation where the FHA is on record saying that they probably have a $1 billion shortfall. Because of this shortfall, the FHA will need to tap the Treasury, which according to Jack Lew is already pretty much tapped out itself.
And why do we have to bail out the FHA, which basically provides insurance to lenders such as banks and other financial institutions? The reason is because they allow these institutions to make loans with only a 3.5% down payment. Therefore, we have subjected ourselves to yet another huge bubble in housing, where home prices are up double-digits. So the FHA will need a bail out for the first time in its 79-year history. ...