The Fed is Propping up the Real Estate Market with Artificial Rates

Posted on | April 16, 2009 | 1 Comment

According to the Federal Reserve Bank average assets increased $29.1 billion to $2.15 trillion this week.  The primary cause for the increase was the $51 billion in purchases of mortgage backed securities.  By printing money to purchase mortgage backed securities, the Fed is able to keep mortgage rates under 5%.  The problem we have is that these are artificial mortgage rates that are being used in an attempt to hold the real estate market together.  If these actions were not being used, we would see an even bigger disaster in the housing and real estate market.

The Federal Reserve Bank continues to do what it has been doing since this crisis starter; propping up companies and markets.  Jim Rogers, Peter Schiff, Ron Paul and Gereld Celente have all proved to be right in the fact that this financial disaster was going to happen; several of them have been almost prophetic in their predictions.  Each and every one of these individuals agrees that the Federal Reserve should keep their hands out of the pot.  If a market or company is going to fall apart, let it fall apart and we will move forward!

By propping up the real estate market with artificial rates we are going to make the future MUCH worse.  Let financial markets work without government involvement!

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