The Declining Dollar and Subprime Loans

Earlier this week I started a post asking why the dollar had fallen and where to find more information about the fall. I was given some answers and directed to another post on the topic. In the second post a number of people pointed to the subprime loan problem as part of the reason the dollar was falling. In a post from a few months ago I criticized Bush for not being willing to give people money to pay off there mortages. Today I would like to bring that up again in the form of a question.

Since many banks and other financial institutions seem to be going bankrupt due to people not being able to pay back their mortage, mainly the subprime mortages, would it not be okay to give people at least some money to pay some off these loans just so companies would not go bankrupt. Would giving these companies a little breathing room help make the situation better?

In addition, should the government just ask Americans people to buy bonds. I know many Americans do not have a great deal of money to buy bonds, but it seems that it would be better to have Americans buy bonds than having foreign countries buying the bonds. I assume that American buying bonds would not compare to the money that foreign countries could put into the economy, but every bit could help.

Boom-bust cycle - the bubble is bursting.

I assume you mean lend these people money.

The original problem was allowing financial institutions to give loans to people that didn't qualify for those loans. They played a game by giving them loans that had ballon payments, teaser rates with ballon payments due in 3 - 5 years. They were banking on a pyrimid scheme where they assumed that housing prices would rise, and therefore the equity would be more than enough to make up for these people who should not have been given the loans in the first place.

The real problem is there was no regulation or oversight, very similar to the same crap that was pulled under reagan with the S&L crisis

It was also contributed to by greenspan by making money so cheap, thus reducing the value of our curency, and allowing the abuses to occur

Incidently, no matter what the spinners try to say about inflation, it is here big time. When was the last time you bought food or gasoline. How convienent that they don't include food or energy when they calculate inflation

My payraise this year was 3%.

giving taxpayer dollars to folks in a mortgage bind, then the answer is 'No!!' I really have little sympathy for people who knowingly took the bait on mortgage deals 'too good to be true'. Why would any sane person agree to an interest-only mortgage? Why would any educated person take a teaser rate loan?

I bought my first home at age 21 with 20% down. I now own my eighth house and have never put down less than 20% to 35% of the purchase price. I have about 4 years left on my 15-yr. mortgage. I have never taken anything other than a fixed interest loan. I not only pay my mortgage payments on time, but have been adding an additional $200 a month principle payment for each month for 6 years.

If the government decides to pay off the mortgages of people who got themselves in a financial mess, than I guess I've been really stupid to keep up with my payments. Should I just stop paying my mortgage so the government can borrow another $trillion dollars and do it for me?