The Federal Reserve, Alan Greenspan, Ben Bernanke, G Edward Griffin, Jekyll Island and the Economy
Please don't take this article as being negative or being written by some kind of conspiracy theorist.
It is neither.
It is being written to inform and share knowledge which might be helpful in understanding where we are economically today, how we arrived here, and how to chart a reasonable course into our personal financial futures.
I was first introduced to G.
Edward Griffin through my association, as an agent, with United First Financial, and their mortgage acceleration program.
Mr.
Griffin endorsed the idea of accelerating mortgage pay downs.
I did some research to find out a little more about him, and discovered that he had written "The Creature from Jekyll Island" in 1994.
The book outlines how the idea for the Federal Reserve System was born in a meeting of some of this country's - at the time - most affluent private citizens, mostly bankers.
The meeting took place on Jekyll Island, hence the title.
If you Google G.
Edward Griffin or "The Creature from Jekyll Island" you'll have the opportunity to watch a video about the Federal Reserve System, how it came to be, what its function is, and how its decisions affect our economy.
Its truly fascinating information.
I urge everyone to watch it.
After watching it you might be better able to understand how we arrived where we are now, economically.
The dynamics of the Chairman of the Federal Reserve System, Congress, and the banking industry will become more clear.
You might find yourself upset.
Better to be upset and informed than uninformed.
Think back a few years to when all indicators seemed to point to a healthy economy.
The housing industry was healthy, as was the stock market, the cost of oil hadn't begun to rise, neither had a lot of the other costs/prices throughout the economy.
What happened? Alan Greenspan, then Chairman of the Federal Reserve System raised the discount interest rates (the interest rate at which banks can borrow money from the "Fed") at 17 consecutive "Fed" meetings, by one quarter of one percent.
The total rise over a relatively short period of time was 4.
25%.
He did this because, as he said at the time, he was "fearful that the economy was heating up".
By the way, Ben Bernanke continued the trend when he first took over as the Chairman, although not for long.
People who had purchased homes using an adjustable rate mortgage, or ARM, two or three years earlier, were now looking at a dramatic increase in their monthly payment.
An example would be a $200,000 30 year mortgage which jumped from 7% to 10% interest rate.
The monthly payment rose from $1,330.
to $1,755.
Of course, very few could afford the new monthly payment and attempted to refinance the mortgage.
The problem became that interest rates on all mortgages had risen.
Solutions became 40 year mortgages, interest only mortgages, and other creative ways for people to stay in their homes, at least, those who could refinance.
Those who could not defaulted, they had no choice.
This left an ever increasing supply of homes on the market.
As the supply increased and the demand was being choked by tighter credit markets, home prices began to fall.
The beginning of the crisis? You be the judge.
Consider this, who seems to have "won" if there is such a thing in the tumult that is our economy ? Who seems to be "losing".
My major concern is not about past events, its this - What are you doing to secure your and your family's financial future? Remember its not the responsibility of the Federal Government or Corporate America.
Its your responsibility!
It is neither.
It is being written to inform and share knowledge which might be helpful in understanding where we are economically today, how we arrived here, and how to chart a reasonable course into our personal financial futures.
I was first introduced to G.
Edward Griffin through my association, as an agent, with United First Financial, and their mortgage acceleration program.
Mr.
Griffin endorsed the idea of accelerating mortgage pay downs.
I did some research to find out a little more about him, and discovered that he had written "The Creature from Jekyll Island" in 1994.
The book outlines how the idea for the Federal Reserve System was born in a meeting of some of this country's - at the time - most affluent private citizens, mostly bankers.
The meeting took place on Jekyll Island, hence the title.
If you Google G.
Edward Griffin or "The Creature from Jekyll Island" you'll have the opportunity to watch a video about the Federal Reserve System, how it came to be, what its function is, and how its decisions affect our economy.
Its truly fascinating information.
I urge everyone to watch it.
After watching it you might be better able to understand how we arrived where we are now, economically.
The dynamics of the Chairman of the Federal Reserve System, Congress, and the banking industry will become more clear.
You might find yourself upset.
Better to be upset and informed than uninformed.
Think back a few years to when all indicators seemed to point to a healthy economy.
The housing industry was healthy, as was the stock market, the cost of oil hadn't begun to rise, neither had a lot of the other costs/prices throughout the economy.
What happened? Alan Greenspan, then Chairman of the Federal Reserve System raised the discount interest rates (the interest rate at which banks can borrow money from the "Fed") at 17 consecutive "Fed" meetings, by one quarter of one percent.
The total rise over a relatively short period of time was 4.
25%.
He did this because, as he said at the time, he was "fearful that the economy was heating up".
By the way, Ben Bernanke continued the trend when he first took over as the Chairman, although not for long.
People who had purchased homes using an adjustable rate mortgage, or ARM, two or three years earlier, were now looking at a dramatic increase in their monthly payment.
An example would be a $200,000 30 year mortgage which jumped from 7% to 10% interest rate.
The monthly payment rose from $1,330.
to $1,755.
Of course, very few could afford the new monthly payment and attempted to refinance the mortgage.
The problem became that interest rates on all mortgages had risen.
Solutions became 40 year mortgages, interest only mortgages, and other creative ways for people to stay in their homes, at least, those who could refinance.
Those who could not defaulted, they had no choice.
This left an ever increasing supply of homes on the market.
As the supply increased and the demand was being choked by tighter credit markets, home prices began to fall.
The beginning of the crisis? You be the judge.
Consider this, who seems to have "won" if there is such a thing in the tumult that is our economy ? Who seems to be "losing".
My major concern is not about past events, its this - What are you doing to secure your and your family's financial future? Remember its not the responsibility of the Federal Government or Corporate America.
Its your responsibility!
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