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What part of free market capitalism would impose a Federal Reserve banking cartel by federal law that could loan into such a bubble?
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What part of free market capitalism would take the US dollar of gold via presidential edict allowing for the unlimited expansion of money and credit into markets in 1971? ( https://wtfhappenedin1971.com )
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What part of free market capitalism would have this state imposed central bank lend a trillion dollars into subprime via government created corporations Freddie Mac and Fannie Mae? And have them lend that to minority families, even if the banks deemed it not prudent?
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What part of free market capitalism would have this state imposed central bank loan money into a housing bubble at 1.5% APR? Do you know any capitalists who are satisfied by a 1.5% APR return on investment?
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What part of free market capitalism would have this state imposed central bank cover counter party risk on CDO's, also causing CDO insurance to become mis-priced, until it didn't?
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What part of free market capitalism would run to the banks rescue with a 1 trillion dollar bailout, to cover them till the fed could lower interest rates back down to zero?
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What part of free market capitalism would reflate the housing bubble with 0% apr interest rates? Which seems to now be causing a bubble in every sector of the US economy.
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Community Reinvestment Act. Carter started it I think to stop red-lining. Clinton blew the doors off it and mandated that banks make ever increasing %s of subprime loans. I read that by the time the train left the rails, half of Fannie's were subprimes.