Right, but now we’re beyond the looking glass and the Federal debt ceiling will be breached again before the election AND the ZIRP policy has fully politicized the Fed Reserve. I dare say if Moran’s plan was implemented today, the long end of the US Treasury curve would explode upward as the world realizes the US Treasury will soon own millions of small homesteads filled with rebellious and armed squatters, and those homesteads are the collateral for long end Treasury Bonds.
And just in case anyone missed it today, Goolsbee came to G-d now that financial collapse is inevitable and imminent:
Goolsbee: Cash for Clunkers, home-buyer tax credits were mistakes ^
10/22/2011 11:08:02 AM PDT · by Hojczyk · 23 replies
Hot Air ^ | October 22,2011 | Ed Morrissey
Never to late to fix things or a reset will happen all by itself anyway.
Banks sold all their mortgage to the GSEs, in other words the government (taxpayers) owns 90% of all mortgages (at a loss).
Banks now basically get their money for free from the Federal Reserve.
What to do?
Start a National Bank with interest free loans and make the Federal Reserve the bad bank to exist to pay off all the bad debts then abolish it, probably only take a couple generations to do that.
Lop off all mortgages by 50%-30% and adjust the monthly payments accordingly (investors take the same haircut).
Make all old and new loans interest free (fee based). Banks go broke, who cares? We have a national bank now working non-profit.
Everything is almost to the point of no return except of course the automatic reset that happens when Congress fails to act in a meaningful way. Much pain ahead, either way.