Rush is right. Dig this:
So here came the subprime mortgage plan, and it basically was a federal program that ordered banks to lend money to people that had no way of paying it back, lend money to people that didn't have to take a credit test and pass it, lend money to people that everybody knew would never pay it back. By the way, if you're new to the program, I want to explain this again. Because the economic mess that we are in was caused and is the result of, predominantly, this.[ emphasis added]
You know why I know that this is true? Back in 2007, Chris Laird mentioned on the Kitco website the fact that the commercial lending has frozen up. This, by the way, was why I subscribed to Laird's newsletter. I knew at that moment that the recession was on its way, it was just a matter of time. As I wrote before, I got out of the markets and went short and made a nice profit.
Laird explained all about how the bad loans were sliced and diced up and spread around so that nobody knew who had the bad paper. That's why the lending froze up and the recession was inevitable. Nobody knew who to trust.
Besides that, I was watching very carefully because the yield curve had been inverted for a year. An inverted yield curve is an indicator of tight money and an increased risk of recession. When the credit markets froze up and the yield curve was inverted, it meant recession. No way around it.
What Rush is pointing out is an admission by the government that this is indeed why things shook out the way they did.
I could go on, but I suppose this ought to be enough for reasonable people. But the supply of reasonable people is short, thanks to liberalism.
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