The investment adviser Mr. Peter Schiff (one of the few who predicted the mortgage crisis and stock market meltdown of last year) has released a new video report. It's sobering stuff, and well worth watching.
From about 3m. 30sec., Mr. Schiff speaks of the General Motors bankruptcy and its implications for the future. He points out that the Government and the unions now own the company. The Government doesn't have the expertise to run the business, but inevitably it's going to have to do so - and inevitably, it won't succeed.
From about 5m. 55sec., he addresses first-time homebuyer credits, and how these are nothing more or less than a thinly-disguised Government subsidy for deposits on a home. He points out that FHA mortgages, only 3% of the market a few years ago, are now 25% of all mortgages issued. The US Government is now effectively subsidizing those who've defaulted on their mortgages in the past, thus ensuring that their continued inability to pay will continue to cripple the housing sector. He points out that this is an attempt to artificially inflate housing prices, so as not to reveal the true worthlessness of the assets on many banks' books.
Sobering thoughts, but probably absolutely true. Worth listening to, and taking into account when you're making plans for your future. In fact, I'd recommend bookmarking Mr. Schiff's YouTube channel, and checking it regularly for updates. He's on my 'required reading' list.
Peter
Scary is not the word...sigh...
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