Since at least the beginning of World War II, the United States has been the Goose that lays the Golden Eggs, Internationally. So, since we had the most stable economy in the world, more and more people loaned money to the U.S. mortgage market as a stable return on their investments. This all worked great as long as the value of housing and properties went up.
However, it is more complex than that. Because of high cost of labor in the United States, we were selling less and less overseas, so most of our economy was buying and selling stuff to each other. However, the basis of that is homeowners. If homeowners start losing their houses,it cannot stop unless A.R.M.s are converted to fixed loans and the basis of the U.S. economy goes into a permanent or semi-permanent free fall.
Nothing I know of but Adjustable rate mortgages that could have created this scenario. THIS DID NOT HAVE TO HAPPEN. IF SOMEONE IN GOVERNMENT HAD JUST CONVERTED ALL ADJUSTABLE RATE LOANS TO FIXED LOANS, NONE OF THIS PRESENT AND IMPENDING COLLAPSE OF THE AMERICAN SYSTEM COULD HAVE TAKEN PLACE. THIS IS A COMPLETELY ARTIFICIALLY CREATED COLLAPSE. IT IS NOT A GENUINE COLLAPSE. IT IS A FAILURE TO DO ANYTHING USEFUL BY OUR GOVERNMENT!!!
However, because it has begun and left to roll on for 2 or 3 years now, it may be too late to stop it now and the U.S. may be slipping into something much worse than the Great Depression. Most of the world except India and China will follow us into this morass. India and China won't completely fall because they like us can survive somewhat by selling goods to each other inside their own countries based upon property owners. Fancy that!
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