In China the Next Great Global Financial Meltdown is in the Works
by Joe Hoft
TheGatewayPundit.com
November 18, 2018
Just like the US in 2008, a perfect storm is building in China, and it may hit world markets soon. The overbuilding, cash-flow challenges and lack of demand in China all combine for an eventual major financial disaster.
As the movie The Big Short showed, in 2008 few individuals saw the US sub-prime crisis before it raised its head.
The cause of the 2008 sub-prime crisis is discussed in the book Falling Eagle, Rising Tigers –
“Politicians would have you believe that the 2008 financial meltdown was related to the more recent actions of one party or the other, but the roots of the 2008 housing market crisis really began in the 1930s with the creation of the Federal Housing Administration (FHA), which guaranteed banks’ mortgage risks and the Federal National Mortgage Association (FNMA), which effectively insured mortgages by purchasing mortgages from lenders. Both shifted risks from the lenders to the US taxpayers. Then in 1977, the Community Reinvestment Act (CRA) was signed into law by President Jimmy Carter. This law was designed to promote home ownership for minorities by prohibiting banks from refusing mortgages in poor areas due to the loan’s high risk. In addition, mortgage lenders were required under the 1975 Home Mortgage Disclosure Act (HMDA) to provide data about who they lent to. Then in 1991, HMDA rules were tightened and included specific demands for racial equality in the institution’s lending.
Credit-worthiness was no longer relevant in the US and the volume of subprime loans exploded. The government had inserted itself in the mortgage business. Like most government initiatives, their plans were doomed. Americans lacking the ability to pay for mortgages were provided mortgages at teaser rates that when fully adjusted would never be paid. This ultimately climaxed in 2008 with the subprime crisis that sent shock waves around the world and put financial markets in a tailspin.
Another financial meltdown is in the works – this time in China
The Rest…HERE
