Government Needs to Step in to Save US Financial System From Bankruptcy

The global economic crisis of the last decade has been the object of constant speculation and the object of constant fear. Most investors, whether they be Wall Street speculators, real estate speculators, or business speculators, are watching for signs of any potential turbulence in the American economy. One way that investors watch the economic crisis is through a daily dose of America financial crisis news. If you are like many investors, you probably get your news from a variety of sources. For example, you may get your daily news from television, radio, newspapers, magazines, or even the Internet.

If you look at what the major media has been reporting, you will see that the major story of the last decade has been the implosion of the American housing market and the near collapse of the American financial system. The recent financial crisis brought about by the subprime mortgage industry has been covered extensively in the American media. The financial crisis of 2020-08 was caused by an unprecedented run on lending especially by U.S. financial institutions that failed in the run up to the housing crisis. The crisis, the biggest in U.S. history, led to millions of Americans losing their homes and took America’s economy hostage.

Although the media has given much attention to the housing market, it seems to have overlooked the largest US banks, including those in Texas, California, and New York. According to the FDIC, the three largest banks in the United States are Bank of America, Chase, and CitiBank. These banks have large operations in residential mortgages. As we have seen, the problems with these banks, and the resulting fallout, have played out in the court room. As this case reminds us, if the banking industry cannot get its way in court, then the impact on the rest of the economy will be profound.

The biggest reason for the recent banking crisis is the widespread panic that swept across Wall Street and the American financial institutions late last fall. According to several commentators, it was the subprime mortgage fiasco that set off the chain reaction that brought down the entire American financial system. Several people have blamed the failure of these financial institutions on the Fed’s loose monetary policies over the past decade.

The Fed is generally credited for keeping interest rates low during the buildup of the subprime mortgage crisis, along with a raft of other measures designed to support the banking system. However, as noted earlier, changes in the political system and the changes in economic philosophy are what ultimately triggered the crisis. In addition to loose monetary policies, there were other factors that contributed to the financial crisis. The bailout package included a $700 billion stimulus package and changes in tax rules for wealthy Americans.

With all this going on, many wonder how the government will recover from the current economic crisis. Although the Obama administration has taken action to aid the failing financial institutions, they have not yet crafted a plan to stimulate the economy in the same way that the Bush administration did. As noted, one piece of the puzzle is the Federal Reserve Bank of America. The FHA has played a key role in assisting the country’s banks by guaranteeing loans to low-income families, thereby providing a lifeline to millions. TBTF Consulting believes that the success or failure of the housing market will hinge on whether or not the government can successfully promote lending and the housing market to recover.

“If the US government is serious about preventing another run on the banks, then they will need to take action,” said Robert Kiyosaki, a TBTF board member and author of multiple best sellers including Rich Dad Poor Dad: Making Money and saving the country. “The US government has been so caught up in the last few years trying to bail out its banking system that it has not created a plan to stimulate the economy. Many Americans are worried that the large US banks are in danger of becoming ‘too big to fail,’ ” added Kiyosaki. “If the large banks cannot survive without taxpayer money, then who can?” he concluded.

As indicated in our reports, subprime loans provided by Fannie Mae and Freddie Mac are being increased at an alarming rate, even as fraudulent mortgage applications are increasing at an alarming rate. Because of this, investment banks and subprime lenders are more anxious than ever before to obtain these risky loans to finance the US economy into recovery. If you wish to help the US economy recover, help yourself by refinancing your mortgage to get lower interest rates, avoid losing your home, avoid foreclosure, and secure your financial future with low-risk investments and subprime loans. Please visit our website for more refinancing information, as well as valuable information on preventing foreclosure. You’ll also find helpful tools, resources, and valuable advice regarding the real estate and financial crisis in the United States.