Meet Your New Chinese Landlord July 17, 2007

by Will

Will Grigg's Liberty Minute

Will the Chinese government be your next landlord? If you haven't paid off your mortgage, this is a serious possibility, particularly if your mortgage is backed by the federal government.

Secretary of Housing and Urban Development Alphonso Johnson recently visited Beijing to invite ? no, to beg ? the Chinese central bank to buy more mortgage-backed investment securities. The ongoing avalanche of mortgage defaults has reduced demand for those securities, many of which are offered by federally backed mortgage companies such as Freddie Mac, Fannie Mae, and Ginnie Mac, all of which extend loans to marginally qualified borrowers.

According to the federal government, Beijing owned roughly $107.5 billion in mortgage-backed securities as of June 2006. This means that the Chinese have helped pump up the real estate bubble on which much of our consumer spending has relied. It also means that they hold the notes that must be paid off after that bubble completes its ongoing collapse. And Washington, incredibly, is begging Beijing to take us even deeper into bondage.

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

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