Direct "Fed to Consumer" Consolidation Loans at 0.5%

Let me try this again.... ok.. I will only use Mortgages as an example as to not cloud the issue.

Banks complain that the "mortgage crisis" is making them tank.... defaults, etc.

Banks complain they have no money to lend .. even though they are taking billions from the fed.

We have mortgages.... 6% .... 11%... whatever.

We already pay these mortgages to a bank.... the same banks that are taking billions of "loans" (cough) because they can't make it.

We take a Direct Mortgage loan from the fed at 0.5%... The pay-off money goes to the bank.... now times this by millions of mortgages... the banks are now flooded with money (NOTE: Fed has already planned 7.4 Trillion Bailout, why not have it benefit us?)

Fed pledges to top $7.4 trn to ease frozen credit mkts

in.news.yahoo.com...
www.nypost.com...
answers.yahoo.com...
yalibnan.com...

So, instead of printing / creating 7.4 trillion for the banks to pay back at 0-0.25%, Why not have us borrow directly from the fed to pay "EXISTING" Mortgages which goes to the BANK in the form of a Mortgage payoff. The Bank gets the money they claim they need... the fed gets an extra 0.25 to 0.50 extra from us and We lower our mortgage monthly payment by almost 50 freekin percent.

OK, This plan provides the same result as this BS bailout except "we the people" also benefit. So does government as tax revenue and economic growth will happen as that extra personal wealth is invested, spent, etc.

The Banks get their bailout, The Fed gets the money back at even greater interest, the people get a nice interest reduction. Banks now have money to lend at their normal rates going forward.

It is the same thing as we have now except FED creates 7.4 trillion and Lends to Banks (whoever), Bank refuses to provide credit to business forcing additional bailouts, banks raise credit card interest rates and WE are still left holding the bill..... ????? ...... ?????? .... ?????? And Government wants to print more money for a "stimulus check" or "tax rebate" check.. whatever to float the economy a few more months (How the hell is that a better plan?)

Now stop, regulation needed asap before doing this to PREVENT our current situation from happening again... 20% down, Credit worthiness, no loopholes for predatory lending, etc.

Put the two plans side by side... I think you would print / create a hell of a lot LESS money to devalue our currency with our plan and pull ourselves away from the cliff of economic meltdown.








[edit on 17-12-2008 by infolurker]

[edit on 17-12-2008 by infolurker]

So, you assume that 7.4 trillion will be printed for the bailout and or credit revival and given to banks who refuse to loan money and extend lines of credit to business.

Then business needs to go to the trough and ask for additional money from the Fed because banks will not loan money or extend lines of credit.

Then we print more for a stimulus package that is a few hundred bucks per person to spend to stimulate the economy because we need the consumers to have money to spend.

So in essence, we are trying tickle down economics and it isn't working because the banks are keeping the money.

Your plan is to borrow mortgage money from the Fed directly at 0.5 % which is double the amount of interest the banks are being charged but a fraction of what we are being charged by the bank.

So we pay off our mortgages in full to the bank and the bank now has capital and cannot complain about mortgage write-offs and defaults. We now get a break because at 0.5 % our mortgages are half or less of what they were on a monthly payment but is twice the interest the Fed was getting back from the banks.

The banks get Mortgage pay offs from millions of mortgages and have all the money they claim they need.

So the stimulus won't be needed because we are getting a stimulus every month by halving our mortgages.


I like it... a win for everyone and will cost less and the Fed will print less this way. Not a bad idea. Almost complete common sense.

Yep, and now they are talking about another stimulus package.... this will not end well.

The Fed is like old Mr. Potter in Bedford Falls. The Bailey Savings & Loan can't find their money (stolen by Potter), so Potter does them a favor and bails out the whole town, thus the town, now called Pottersville, is so deep in debt to Potter that he owns the town completely. I think the Fed is Potter.

This doesn't account for other factors either. T-bills are essentially trading in reverse, This means the government is broke and running on fumes. So in order for the FED to shoo off the foreign debt collectors they drop their interests rates to near zero to pump more liquidity into the market to make it look like we have the ability to pay this off.


We're going to see inflation levels NEVER seen in any economy anywhere.