The Obama Administration and his financial arm Bernanke and Geithner have professed to bring back the recovery to middle America by providing financial incentives for home mortgages.  This worked briefly for a few months only from the perspective of lower home interest rates, and although the rates remained low for a few months there have been still been problems for people able to qualify for new loans.  This due to the new regulatory requirements for those able to qualify and now there is a new problem.

The New Obama Federal Home Loan Program has begun to implode under its own weight of debt.  Home rates have gone up to what they were last year simply do to the government’s policy of purchasing its own debt.  The Obama financial program intends to inflate its way out of this recession but that happens to cause the dollar’s value to drop and home mortgage rates to go up.

This financial prescription for economic recovery is in direct conflict with itself and shows how inept Obama and his financial gurus are to pushing socialism on an economy that is ingrained with capitalism.  The market decides what will and what will not work financially.  The housing sector will definitely not lead America out of the economic abyss created by both Republicans and Democrats.

If anyone happens to say that Obama inherited this mess please ask them why he has signed a $1.3 trillion dollar budget with 9,000 pork barrel earmarks.   Or when Obama complains about the budget deficit he inherited of $455 billion ask them why he has allowed the projected budget deficit this year to reach a record $1.75 trillion , according to the Congressional Budget Office.  Then when an Obama fanatic says the Obama will reduce this deficit ask them how exactly doe he propose to do that, what has he proposed to cut?

Federal Reserve Chairman Bernanke may be waking up the the fact that he is not in control of the economy as he thought he was.  His efforts to bring down borrowing costs to revive the housing market and help the economy has come to a screeching stop.  Mortgage rates are rising the average 30-year fixed-mortgage rose to 5.27 from 4.7 percent as of yesterday, according to Bankrate.com.  Mortgage rates are almost back to where they were in March before the 30-year rate fell to a record and sparked a refinancing boom.

Rates are rising as President Obama has pledged to spend $275 billion to help keep as many as 9 million Americans in their homes and stem the rise of foreclosures. His measures also include a tax break of as much as $8,000 for first-time homebuyers that wouldn’t require repayment.  The only problem with the tax break is that it only applies for new home construction.

Bernanke has to step up the purchases of Treasuries and mortgage-backed debt with printed dollars out of thin air  that equates to the amount of new Treasury debt being dumped onto the market.  Treasury yields are rising as the U.S. government sells debt to itself and Bernanke and President Obama wonder why the mortgage rates are going up?!

The market is responding as refinance applications this week fell 19 percent to the lowest since early March, before the U.S. announced a loosening of Fannie Mae and Freddie Mac rules to allow more borrowers with little or no home equity to arrange new loans. The same problem that got America into this problem in the first place is again taking place no equity loans!

Yields on Fannie Mae and Freddie Mac mortgage bonds tumbled today after rising earlier this week. Increases this week, spurred in part by a jump in Treasury yields, at one point were as big as any since 1984, before narrowing to only the most since late January.

At the same time as the Fed is buying up the Treasury’s debt Mortgage foreclosures rose to a record 9.12 percent of U.S. home loans and house prices dropped the most on record in the first quarter, industry reports show.  The U.S. delinquency rate jumped from 7.88 percent, the biggest-ever increase, and the share of loans entering foreclosure rose to 1.37 percent,

The Fed plans to buy as much as $1.25 trillion of mortgage- backed securities and up to $300 billion in Treasuries as part of a plan to lower rates. Minutes of the central bank’s April 28-29 meeting show some officials said the Federal Open Market Committee may yet boost asset purchases to spur a more rapid economic recovery.

As the Fed demonstrates that it is completely incapable of manipulating its way out of this crisis, market forces are contracting in the wake of a coming Tidal Wave if inflation from the Fed buying the Treasury’s debt.  This week by action

Based on ideology and Marxist-fascist principals Comrade President Obama has bet his presidency on government.  President Reagan the most successful president of the twentieth century unshackled government from the backs of Americans, and the people were rewarded with a successful economy and peace in the World.  Whatever the theories are about government and higher taxes providing an incentive to grow the economy, there have been no examples except in the growth of totalitarian regimes.  As we saw with Comrade Obama embracing Castro, Chavez, and Ortega it is obvious that he does not disfavor totalitarianism. And those see him as weak, naive, and ideologically sympathetic.

There are less than 20% of economists today who indicate that there will be a depression in the United States, the other 80% must receive their paycheck from the government.  Government is such an ineffective vehicle for participating in the private sector that socialist countries have fallen far behind the USA of old in terms of productivity. Debt is nothing but a drag on an economy when real unemployment is at 18%, wealth has evaporated for those who could invest and taxes are the only force driving the economy, any recovery cannot last.  The foundation of a recovery as President Reagan proved was to unleash the American people’s potential by limiting governments intervention and productivity and economic investment will blossom.

How can governments priorities and new ideology force consumers to purchase what governments wants instead of what they want?  The capitalist economy is built upon business providing what consumers want not what government wants consumers to buy. Besides when nationalized businesses begin to fail, Banks, Auto, insurance, health care, manufacturing the government will continue to subsidize these failing industries as England did all to build a bigger debt to pay off with taxes!  If government is the new business with growing employment, higher wages and retirement packages, along with the funding of Social Security, medicare, medicaid and prescription drugs the new proposed government health care all when the economy is in a spiraling trend downward, government programs will only benefit those who live off the taxpayer.

The taxpayer is unemployed, and those with retirement investments have seen their wealth disappear, so the Obama plan is to tax the wealthy, shackle business with more taxes via cap and trade and borrow from future generations of Americans.  Does this sound sustainable? Yes Comrade President Obama, only in Cuba, Venezuela and Nicaragua!

Obama Gambles that Reagan’s Economic Policy was Wrong

As he approaches his 100th day in office, Obama is rolling back the Reagan Revolution and restoring government to a central role in the economy. He has passed the biggest budget stimulus ever, prepared the way for an overhaul of the U.S. automobile and banking industries and proposed a $634 billion government- funded expansion of health-care benefits.

The ultimate consequences of rebalancing the roles of government and capital are far from clear. In the short run, though, Obama has managed to dissipate some of the doom-and- gloom talk that the U.S. was headed for a depression.

“In a financial crisis, the biggest mistake that a government can make is to do too little, not too much,” Treasury Secretary Timothy Geithner said in an interview April 21.

In the longer run Obama has proposed a 10-year budget plan, including $3.55 trillion for 2010 alone, to pay for his proposals to expand government’s role in such areas as health care and education.

Obama’s long-term plan extends the shift in priorities that started with the stimulus program’s focus on middle-class tax cuts and government-assisted job creation in selected industries such as renewable energy. The 10-year plan lays the groundwork for universal health care and redistributes income from the rich to those less well-off. It also boosts spending on education and infrastructure and proposes a so-called cap-and-trade system to help limit carbon dioxide emissions by U.S. businesses.

“We laid out a broad redirection of priorities for the country by making critical investments in basic public goods,” Geithner said.

Obama has defended the deficit, saying massive government spending is necessary to combat the financial crisis. He has pledged to cut the shortfall in half by 2012. That would still leave the government $581 billion in the hole for that year.

And budget experts are skeptical even that can be achieved. “We’re not going to be able to turn off the spigot completely when this downturn ends,” says Isabel Sawhill, who’s at the Brookings Institution in Washington.

The cost of hedging against losses on U.S. Treasuries using credit-default swaps rose to a record on Feb. 23, the week after Obama signed the stimulus bill. While the cost has since come down, it remains about seven times the level of a year ago.

“You cannot finance this without an increase in real interest rates,” Greenspan said. “They’ve got to stretch out their timetable.”

Some economists also argue that Obama’s plans to intervene more forcefully in the economy will lead to slower, not faster, productivity growth.

The Big D

If one asked a roomful of economists two years ago to put odds on a repeat of the Great Depression, nearly all would have said zero. In early March, The Wall Street Journal posed the question to about 50 forecasters — defining depression as a decline in output per person of more than 10%, four times worse than the decline the IMF anticipates. On average, they put odds at one in seven; several put them above one in four.

“This is a Depression-sized event,” says economic historian Barry Eichengreen of the University of California at Berkeley, citing the global decline in industrial production and world trade. The big difference: In 1929, governments dithered, or worse. In 2009, they’ve rushed to the rescue.

To go from today’s deep recession to a depression something would have to go wrong. It could be a financial catastrophe on the scale of last fall’s bankruptcy by Lehman Brothers or another panic-inducing event. Or a crash in the dollar, one that forces interest rates up at just the wrong moment. Or it could be political gridlock that stops governments in the U.S. or Europe from spending enough to fix the banks before a big one fails, or keeps them for doing more on the fiscal or monetary fronts as the economy deteriorates.

Or it could be virulent deflation that pulls down prices and incomes, making debts, which don’t fall when prices do, a heavier burden. The textbook remedy is easy money and big government deficits. But so much of that has been tried it’s easy to question its efficacy or to imagine resistance around the world to doing.

The odds of the big D: 20%.

In a few months, the affect of the Obama, Geithner, Bernanke and Liberal Congress will explode on the economy.  Inflation will take off this summer and there will be nothing anyone can do to that will stop the worthlessness of the dollar or the rise in unemployment.  America’s money supply of inflated dollars will loses its purchasing power both at home and abroad. We will see a collapse in the value of the dollar that will wipe out the wealth of all Americans.  At the same time unemployment will rise beyond Great Depression highs, as an insatiable government sucks dry the private sector and those who once made a living in the free market.

Why?

America has a $11 trillion national debt and approximately $80 trillion in unfunded liabilities for bailouts, stimulus, social security, medicare and other social programs. Not to mention the $850 billion in new unfunded health care expenses or the $346 billion annual cost of giving social security, medical and all the educational support for 10% of our illegal immigrant population that is too lazy to learn English.

At a time when Americans are out of work President Obama will sign the new immigration bill that will put undocumented foreign workers in direct competition for legitimate American jobs.

America has an annual GDP of nearly $14 trillion, with 70% of that figure being consumer spending. People are uncertain of all the changes to the economy by the Obama administration so they are saving to protect them from the coming depression.

Recently the Federal Reserve expended $1 trillion to its member banks with a few keystrokes of a computer by Fed Chair Bernanke.  When the Federal Reserve expands the money supply, it is creating money out of thin air. As creditor nations that hold US debt find that the value of the US dollar is dropping the faith and confidence in the dollar and US Treasuries will create the need to find another more stable currency.  As this collapse happens it will cost more to run government, business and purchase the products we need to survive.

President Obama agreed at the G-20 summit to follow the international “high standards” for the regulation of all “systemically important” companies to be promulgated by the new global Financial Stability Board (FSB). The United States, through President Obama’s desire to be liked, will go along with whatever the FSB proposes.  Then the U.S. government will impose international rules on our economy.

So with new tax code changes being proposed by President Obama, Europe about to formulate socialist regulations to be imposed on our economy, the U.S. government taking over any large company they desire, the deficit and spending reaching unheard of levels and government control of banks and interest rates, how can any businessman in his right mind decide to invest in an uncertain economy with the added disincentive of higher taxation?

President Obama will not waste this economic disaster, knowing that Americans trust his judgment; he intends to turn America into a nation dependent on government.  He knows his budget will not improve the economy but he wants these changes, so that his legacy to America becomes a Marxist-fascist social order that will keep liberals in office by its dependence on government. He and his comrades are using the economic crisis as his justification for a subversive change contrary to the constitution.  As has been written here before, this Black President will enslave the American people.

A fitting retribution for a population that has forgotten why our forefathers signed the declaration of independence, which they knew by putting their signature to that document, they would be signing their own death warrant should King George defeat the American freedom movement.  Today and on April 15, 2009 many Americans are participating in a symbolic protest of unfair government taxation by throwing tea bags in bodies of water across America.

Almost fifty percent of Americans do not understand how precious liberty is to life.  They feel that liberty is given to them by government, rather than by keeping ever so diligent that a government does not tread on a freedom that was gained through the spilling of blood, the loss of loved ones, and the ultimate sacrifice of a hero, their life, so that their fellow Americans can live in freedom.

When an American truly understands the phrase, “give me liberty or give me death” that person knows the value of life, and that death is a better comfort than to live with the monkey of government upon your back.  Who would rather live with a government parasite sucking the blood of life from their body, watching their family reduced to begging government for sustenance, and being asked  by a Marxists-fascist regime for more sacrifice than they are entitled to.

The central principal of the Comrade President Obama Administration, is to make citizens dependent upon government at the expense of their liberty for the next 200 years.  The second American Revolution for our freedom and liberty has begun, join the fight, reaffirm the rights in the Declaration of Independance!