The housing bubble has been central to the current crisis. A key factor in ramping up the massive and unsustainable mountain of debt was the shoveling of money into the housing market via 90% and 100% mortgages.
This problem was so widely recognised that by April 2008 over 20% of mortgage products had been withdrawn from the market. Including all 100% mortgages.
Given this recent history, today’s news is astonishing. The UK Government is to step in and provide mortgage guarantees, bringing down house deposits from 20% to 5% (thus ensuring the return of 95% mortgages). At the same time, through loans to the building industry and support to local authorities another £1 billion will be pumped into the housing market.
Who does this new government policy serve? The finance industry of course. It is yet another way to provide public guarantees for bank lending. It reduces the risk to banks and places more liability onto the UK population.
The banking industry is desperate for more cash-flow to feed it’s debt lust. Every £1 will be used to generate at least another £100 of debt (they call it leverage). Predatory bankers know we are on the edge of a massive global financial crash which will tear the very fabric of society, with untold consequences.
The one useful role available to governments today, is to stand up to the zombie banking community on behalf of the public – but they don’t. As individuals we are abandoned. Left to fight alone against the legal and financial power of these psychopathic corporations, as they compete amongst themselves for global domination.
Like some mythical battle between giants they have almost accidentally laid waste to the global economy. They have ruthlessly sucked the life-blood from society, obsessed with their own petty corporate egos. Blind to the real nature of humanity they have destroyed their own food-chain. They face extinction.