By scrutinizing the role of the FDIC more closely, you should see that its entire purpose is keeping the good ole' boy network intact, leaving Americans with nothing. If the free market were allowed to function, the government's role would be limited to enforcing contracts. If homeowners default, the bank would foreclose. But if the bank defaults, the bank's creditors -- i.e. its depositors -- would become receiver for the failed bank's assets. Depositors should be senior to all other creditors. Thus, in the event of a bank run, depositors have the first legal claim to a bank's housing inventory.
What does the insolvent FDIC do? If a bank fails, the FDIC sends in federal regulators to protect the bank's assets from its depositors by becoming receiver for a failed bank's assets. In many instances, the FDIC has arranged shotgun mergers with investment banks on Wall Street, turning investment banks into bank holding companies.
So we can see this sleight-of-hand trick, under the guise of protecting depositors, transfers real assets (i.e. housing inventories) from failed banks to Wall Street, while promising depositors nothing more than globs of Fed "liquidity."
There's no way the FDIC/Fed can guarantee the solvency of the banking system or depositors, which will destroy the currency, thus destroying the very depositors - i.e. anybody holding dollars - those institutions are supposedly designed to protect.
The solution, then, is to put a failed bank's assets into the receivership of its depositors. Any other efforts to prop up the housing or bond market will prevent the market from clearing and block those who have already lost homes from ever regaining possession. We are now doing to the housing market the same thing that has already been done to healthcare and education.
I would submit to you that we would all be better off the less government intervenes in the marketplace, no matter how well intentioned is the intervention. The less politicians do, the better off we will all be. Politicians spend a great deal of time promising to fix problems that they created in the first place. The "fixes" beget more problems. Senator Cortez Masto is no exception. Everything Senator Cortez Masto has supported has made housing increasingly unaffordable.
For those who have lost homes: If you want to figure out how to get your homes back, then make an inquiry into where they've gone. The Fed is sitting on over $1.5 trillion worth of mortgage-backed securities. We can go a long way toward saving the dollar, creating affordable housing, and getting people back into homes if politicians like Senator Cortez Masto fight to compel the Fed to disgorge the mortgage-backed securities on its balance sheet. Any other plan will engender homeless people and peopleless homes, which is why Senator Cortez Masto is the wrong barrister with the wrong indictment of the wrong suspect.
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