The present economic situation is far more dire than is being reported by the media, the official declaration by the NBER's Business Cycle Dating Committee that the recession ended in June 2009 notwithstanding. Consider the way in which commercial bank credit has plunged an unprecedented 13.6 percent since its peak in December 2008; the previous two-year record was the 0.8 percent decline during 1974 and 1975. Since bank credit has historically grown by 8.4 percent each year, this means that the credit supply of the U.S. economy is presently $2.1 trillion below where it would have been if the economy had continued to grow normally in 2009 and 2010.
The recent confirmation that the entire U.S. financial system is presently resting upon a foundation of fraudulent securities backed by defaulting mortgages to which no one holds a valid title is unlikely to materially improve this situation. The problem is that for the last 20 years, under political pressure from the banks, both political parties have colluded in eviscerating the legal system of property rights that economist Hernando de Soto has demonstrated is required for a capitalist system to generate wealth. This short-sighted financial rapine has not only ruined the economy, but may have even managed to permanently damage the wealth-producing infrastructure of American society. [Emphasis added]Karl Denninger believes that the banks' deliberate subversion of the land title system, which enabled them to package vast numbers of mortgages into fraudulent securities, has:
...massively corrupted the chain of title for perhaps as much as one third to one half of all residential housing units in this country and if not corrected will render these homes unmarketable in the future.
Now we hear that Senate Democrats are holding hearings on a proposal for government seizure of private 401(k) accounts.
The government and financial sectors have degenerated into a mere partnership of looters, turning America into a gargantuan banana republic where productive labor (outside the black market) is virtually a sucker's bet and traditional patriotism - the kind that takes pride in civic institutions - is reduced to a morbid joke.
Vox Day, in a dialogue with Ilana Mercer, explains the essence of Foreclosuregate:
What happened was that the banks wanted to create mortgage-backed securities, but selling the securities legally required transferring the notes and titles as per the land title system. But that would have cost a lot in filing fees and all but eliminated their profits, so they simply ignored the law, created an electronic registry called MERS, and thereby ripped off large financial investors by selling worthless paper. The foreclosure-based fraud about which you have such doubts is merely the cover-up that resulted from the way in which a need to foreclose exposed the initial fraud.