Bend Over America, The Banking Elite want to give it to you…over and over
“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” – John Maynard Keynes, 1919
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Ludwig Von Mises, Human Action, a Treatise on Economics, (Fox & Wilkes, 4th rev. ed., 1963)
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Former government employees (FDIC, HUD, Treasury, etc.) along with former banking employees, open up their own asset management company or become affiliated with a successful one. The FDIC closes down a “bad” bank with not enough clout to remain open. The FDIC with bankroll from the Treasury, sends the book of real estate to the asset manager at written down levels. The asset manager has to come up with 15% cash, and the rest is financed by the feds at dirt cheap rates. Until the loan is paid off, the feds are 50% partners in the equity of the property going forward, however….they cover most of the potential loss going forward, as well as cover a 1% management fee on the value of the asset.
Now….the asset manager needs to raise cash in order to gobble up these sweetheart deals. How do they do this? By courting money from THE SAME BAKS THAT HAVE BEEN BAILED OUT OF THEIR OWN UNDERWATER PROPERTIES AND ARE NOW SITTING ON HUNDREDS OF BILLIONS OF TAXPAYER HANDOUTS!!!
That’s right……the Goldmans and JP Morgans of the world force the closure of direct competition, have their own losses covered by taxpayer money after they ditch the mortgages they want to, get to carry their own books at whatever level they want to, then go back into the market and scoop up THESE SAME PROPERTIES along with those of freshly deceased banks at a new gutted price.
Not only are they picking these assets up at a reduced level, but they are getting near 0% loans to do it with. Oh…and to top it off, the asset management company will pay them close to 10% in order for the investor to come up with the 15% cash down payment. In return, the asset management gets a fee and they then split the remaining equity on the deal with zero risk to themselves. If a property value is underwater or can’t sell….no big deal because the entire nut is being financed with government free money….but if it is doing well, the management group will pay off the loan in order to get the feds out of their equity position….then go and sell the assets for a profit which they split with their investor who financed the whole thing with bailout money!