Do you want to get a loan that will actually make you more wealthy? Do you realize that such loans are now available on home properties if you have good credit? Mortgage loan rates are now lower than the inflation rate and if you lock in a 30 year mortgage now your interest rate will most likely remain lower than the inflation rate for the foreseeable future. You will indeed become wealthier in the long run just because you took out a 30 year mortgage loan. Strange but true, thanks to the Keynesian insanity of the Federal Reserve Bank of America.<\/p>\n
People with good credit can now get a thirty year mortgage on a home property for under 4 percent\u00a0 In addition, you can deduct the interest on your federal and state income taxes. That means that most people will get at least a 25 percent tax write off for the loan interest. In other words, after the write-offs you will actually be getting that 30 year loan for less than 3 percent of the unpaid balance a year. That is less than present inflation and far less than long-term projected inflation.<\/p>\n
If there is actually higher inflation in America then there has been, and that seems pretty certain to be the case with our huge debt and overspending,\u00a0 then by taking the loan you will only have to pay a small fraction of what the property will be really worth when you sell it in the long-term future. The difference between what you paid for the property in inflation adjusted dollars and what you sold it for will be your net wealth gain for obtaining a loan.<\/p>\n
I am assuming that our Federal Reserve will continue the policy to inflate our debt away. If we went into the world’s greatest deflationary depression, it would become a different story, but governments are simply not going to allow for that to happen, even if it means globalization and a new currency. If this great depression actually did happen, paying on your home loan would be the least of your worries anyway because the collapse of modern civilization would be upon you.<\/p>\n
I also am assuming here that you have a secure source of income and that you will be able to make the monthly payments, otherwise you will lose the property and the down-payment. Therefore, if you are not fairly well off, or know that you will be selling this property in the next ten years or so, then this mortgage loan idea to gain additional wealth is not for you.<\/p>\n
I point this wealth creating opportunity out to you, to show you the kind of economics that you will have to keep up with to gain wealth in the helter-skelter cuckoo nest<\/em> world of socialist Keynesian economics.<\/strong><\/p>\n You might wonder why these loans are going for less than inflation since no financial institutions could stay in business lending out money at less than the inflation rate in a normal world? I think it is because financial institutions are being lent money from our Federal Reserve for 1\/4 of one percent and then the financial institutions make the mortgage loans and sell the loans at a profit to Freddie Mac and Fannie Mae who are operating at a huge loss but nevertheless still in business because they are now in the possession of our federal government.<\/p>\n To help Mac and Mae out, the Federal Reserve Bank buys up mortgages by just electronically creating money out of thin air. More dollars created means that people holding those dollars will bid up prices making prices rise. The resultant inflation then robs savers that are holding debt because they get less interest on their investment than the inflation rate.<\/p>\n Does that sound like wise monetary policy to you?? Yet, that is what our government is doing and it is why interest rates on mortgages are the lowest that they have ever been. Of course the Federal Reserve wants to sell those mortgages to investment and retirement funds at a profit so they keep Treasury bonds interest rates even lower than the mortgage notes by creating even more money out of thin air to also buy up U.S. Treasuries.<\/p>\n The problem with this crazy scheme is that they are just creating money to stimulate the economy and that will eventually devalue the dollar which will push up inflation and long-term interest rates. When that happens the jig is up and America either defaults or has to dramatically raise interest rates bringing hyper-inflation. The Fed is only getting away with this scheme now because there is so much fear in the financial markets of Europe and elsewhere. Markets are so shaky that investors are willing to park their money in the safety of U.S. Treasuries even knowing that they will take a loss after inflation.<\/p>\n Savers of U.S. government debt are getting almost nothing on their investment and less than nothing after inflation. Those buying Treasuries and bank CD’s etc, are continually getting poorer and the money that they lose is unknowingly subsidizing low-interest mortgages loans.<\/p>\n Even so, this scheme can only go on as long as fear makes savers willing to become poorer for the thought of keeping vultures away from their nest-egg. Once they feel confident enough to make other investments interest rates and inflation will rise. Then those that took out these low-interest\u00a0 loans will make out like a bandit because they will pay back the loans in dollars that are worth far less.<\/p>\n It sounds screwy and it is, but in this upside down world one way for middle class Americans to get more wealth is to get a long-term mortgage that they really do not need.<\/p>\n There is good reason to believe that the dollar won’t be worth much in ten years but your payment on your loan will remain the same amount of dollars. For example, let’s say that in ten years two dollars buys what one dollar buys today. In that case, in ten years your house is worth about double what you paid for it in dollars but what you continue to pay on your loan remains the same. Therefore, the difference in what you can sell the house for and what you owe is your increased wealth. I am assuming that in a few years housing will keep up with inflation (after the bubble is fully deflated and the surplus housing is sold off). I think that is likely because building materials and labor costs and land will continue to go up with inflation.<\/p>\n Of course there is always the chance that government can change the rules in the middle of the ballgame and index existing loans to inflation and\/or stop allowing you to deduct your interest on your mortgage loan. Even so, if\u00a0 you do not spend the money you can always just pay off the loan. So I am not suggesting that people do this that do not have the resources to pay off the loan anytime they want. However, if you do have the resources then it might be financially wise for you to take advantage of this nutty government redistribution of savers wealth program.<\/p>\n This crazy monetary policy will probably lead to the Federal Reserve going bankrupt and then those holding its treasuries and mortgage notes will not be paid or else the taxpayer will somehow have to come up with trillions of dollars to bail them out. The other scenario is that our currency gets devalued and make all savers big losers.<\/p>\n That is my story. What you do with the information is up to you. You will have to decide for yourself the morality of going into debt to make money. My real motivation for writing this is to point out the insanity of where the Federal Reserve policy is taking us, and perhaps to talk myself into taking out a loan so that I can build a house on my larger property. If you are so inclined to take out a below inflation rate mortgage to increase your wealth, you might want to also consider why increased wealth during the fall of America will do you any good anyway?<\/p>\n Conclusion:<\/strong> I think that you should be aware that insane people are running our monetary policy. This is not a good time to be a lender. High interest rates are right down the road and you’re going to lose wealth if you’re holding bonds.\u00a0 Government cannot create wealth, all they can do is redistribute the wealth that exists. Government wealth redistribution never works out for the betterment of any nation. Artificially low-interest rates from money created out of thin air means higher inflation in the future. There is no free lunch.<\/p>\n I am not telling anyone to go into debt. However, if you want to get in on this wealth redistribution scheme by getting a loan at interest rates that will be far less than future inflation, your time to do so is growing short. The Federal Reserve is creating money to try to stimulate the economy, but because of this Fed policy, lenders will see their wealth redistributed to borrowers (lenders are really all those that own bonds, notes, bank cd’s, mutual funds, retirement funds etc., just in case you do not realize that you might be a lender).<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Do you want to get a loan that will actually make you more wealthy? Do you realize that such loans are now available on home properties if you have good credit? 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