Will Grigg's Liberty Minute

September 13, 2007

A few weeks ago we reviewed the July visit of US Housing Secretary Alphonso Jackson to Beijing. Jackson tried to persuade the Chinese central bank to buy mortgage-backed investment bonds.

The Chinese balked at this suggestion, and understandably so: Within weeks investment markets began to reel from the collapse of the sub-prime mortgage industry. The bonds Jackson tried to peddle in Beijing would have been issued through an agency called Ginnie Mae to cover those bad loans.

Market analyst Richard Bove points out that the Bush administration is planning to issue those bonds anyway to help bail out homeowners who face foreclosure. Ginnie Mae, which will underwrite the loans, will lose untold billions of dollars, passing the costs on to the taxpayers.

Apparently, plan ?A? was to pass the costs along to the Chinese, who were smart enough to see through the ruse. Could this be the reason Beijing is now quietly dumping its dollar-denominated Treasury notes, thereby accelerating our descent into economic chaos?

Let us take back the liberty wherewith Christ has made us free.