Can Anyone Please Explain What is Going on With this Graph and Why it is Bad? Thanks
(media.patriots.win)
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I understand that my friend knows why this is bad. I have no clue what the graph means. I haven’t bought a home yet so maybe that’s why
Ah, I c. Ok, well, the general idea is that when you borrow money for a mortgage, the bank issues the mortgage. But the banks do not want to take the risk, so they repackage the mortgage as a Mortgage Backed Security, which is a complicated way of saying the bank is selling the cashflow generated by the mortgage, you follow? The graph is showing that no one trust the cash flow to continue, so they are selling off their MBS', because they are worried their money is not safe. The only buyer is the Fed. That means the Government owns all the houses in reality, not the people paying the mortgage. I hope that makes sense.
And does this imply that the banks foresee massive inflation and or some deep economic decline
It signals a breakdown in trust for the American dollar as a global reserve currency. The things the Fed are doing, they are doing because they are controlling the world with money. That system is rapidly dissolving like a raccoon dipping a sugar cube in water.