GLOBAL
REAL ESTATE MARKETS FORUM
4Rs:
Realty Reality
Recommended Reading
with
Editorial Comment
REALTY
REALITY FSO ARCHIVES
April 29, 2005
See: Fannie
Mae's bailout tab, by Dan Gainor, Washington Times
See: Social
Security's Future - FAQs, by our good friends, Big Government
See: An
Economy On Thin Ice, by Paul Volcker, Washington Post
See: Minimum
Credit Card Payments Expected to Double, Jerry Giardana, KTUL
Channel 8
See: We
are only as safe as housing, Danielle DiMartino, Dallas Morning News
See: The
State Electronic Gold Currency
Plan � Part 3, Dr. Edwin Vieira, Jr., News With Views
Rob Kirby Commentary
[with Editor's Snippets]
Who's Picking Up the Tab?
The first three of the above recommended readings should be familiar to our readership. We do not apologize for reminding everyone of the gravity of their importance, however, since many main stream media outlets have simply failed to report the potential fallout of each of these items on Main Street USA. = In gems like this one, Dan Gainor serves up a well articulated morsel,
��Fannie Mae, the government-sponsored mortgage association, has been battling a mounting scandal since last year. It has accounting errors of about $11 billion. That's more than nineteenfold Enron's $567 million error�.�
outlining the scale of chicanery already uncovered at Fannie Mae [NYSE: FNM] � and the tab�s still open, folks. The Social Security Q & A serves as dessert, or a little bit of light after dinner reading [or an aperitif, perhaps?] � take your pick? Mr. Volcker's masterpiece [which we can't get enough of as if we are hooked on BBQued Ruffles Masterpiece potato chips and Reese�s Peanut Butter Cups] reminds us all that, indeed, there is a bill to be paid � what with all the fine dining we've been doing!
Oxymorons
Is it just us, or has this occurred to anyone else? What we're referring to is the U.S. government�s plan to privatize social security. We're not trying to say it's a bad idea � fixing something that is broken that is. In fact, if something is broken � we fundamentally believe that one should do all in their power to make it right. But consider that Government sources have estimated that �fixing� social security will cost somewhere between 1 and 2 Trillion Dollars. It has been clearly stated that the proposed means by which this fix up will be effected is with borrowed monies. Current U.S. fiscal and balance of trade deficits combined, are somewhere in the neighborhood of 1 Trillion [give or take a couple hundred billion either way] annually. Foreigners are counted on to absorb perhaps 75 % of these gross new borrowings each and every year [the entire current account deficit as well as 40 % � 50 % of the fiscal budget deficit]. As former Fed. Reserve Chairman, Paul Volcker points out,
��The United States is absorbing about 80 percent of the net flow of international capital�."
With the above information being undisputed fact, we ask, how could America - let alone anyone borrow an additional 1 � 2 Trillion dollars when existing borrowing, of about 1 Trillion, is already 80 % of global savings? On our planet, such a proposition is sometimes referred to as an oxymoron.
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