BUY NOW - PAY LATER
As Interest rates kept dropping to "50-year lows," homeowners have had the opportunity to refinance at a much lower rate of interest. It's Called "home equity" and instead of trying to get the house paid for and be out of debt, most Americans have been grabbing that equity money and buying things they had been getting along without. Americans don't seem to want to be free from the bankers grasp. I owed a lot of money during the 1980's and know what it's like to be a slave to the monetary system. According to certain estimates, American homeowners have withdrawn nearly $300 billion and much of it has been spent on nonessential items. The Federal Reserve tells us that by borrowing more and spending more, our economy can survive, so interest rates keep coming down. Over the pas couple of decades the fed has dropped interest rates from 15% to only 1% (that's Fed Fund Rate and you can't get a deal like that at the local bank).
During the 1960's and 70's farmers were convinced they could borrow themselves into prosperity. Farmland owners were wheeling and dealing until interest hit 20 percent in the early 80's, at which time farm bankruptcies parallel those of the 1930's. Today it is the typical American homeowner that is getting set for a similar collapse. Over extended credit may not be so bad if you have a high paying job, but on a daily basis more and more of our workers are being laid off as their jobs are transferred to foreigners who are willing to work for pennies a day.
Many Americans have withdrawn their home equity thinking the price of homes will continue to increase and inflation will bail them out. This is exactly what farmers thought about land prices prior to the 1980's farm crisis. According to "SafeMoneyReport" the average price of new homes dropped 10% last month, the average price being $187,000. Also the inventory of new homes for sale is at a nine year high, so many people are unable to sell their homes for the amount of money they expected and many aren't able to sell them at all. According to the latest reports, over 2.5 million homes are presently for sale, which is the greatest number in over 12 years.
According to an article in the ROCKY MOUNTAIN NEWS, by John Rebchook, "Real estate foreclosures continue to soar. The latest trend is that most people are unable to hold on to expensive homes. Not only did people overpay for the base price of their home but also many owners refinanced to add bells and whistles to their houses, which now are worth less than the loan amounts. People refinanced and were listening to lenders who were able to get appraisals for unrealistic amounts.
Reuters News tells us that interest rates remain near historic lows but refinancing activity is reaching new record highs and the home mortgage industry is expected to hit an all time record of $3.4 trillion. If this is true, how can Alan Greenspan continue to tell the American people that the US economy is in an imminent, strong recovery?
Proverbs 11:7- "The rich rules over the poor and the borrower is servant to the lender."
© 2003 Derry Brownfield - All Rights Reserved
Derry Brownfield was born in 1932 and grew up during the depression. He is a farmer and a broadcaster. Derry attended the College of Agriculture at the University of Missouri where he received his B.S. and M.S. degrees. He taught Vocational Agriculture several years before going to work as a Marketing Specialist with the Missouri Department of Agriculture. Derry served as Director of the Kansas City Livestock Market Foundation at the Kansas City Stockyard prior to establishing himself in farm broadcasting.
Derry started farming when he was 16 years old and received the Future Farmers of America State Farmer degree in 1949. Since that time the Brownfield Farm has grown to over 1000 acres maintaining a herd of 200 registered Charolias cows.
In 1972, Derry and his partner established the Brownfield Network which now serves 250 radio stations throughout the Midwest with news and market information. In 1994, Derry started his own syndicated radio talk show and he is one of the most popular radio talk show hosts in America. The Derry Brownfield Show can be heard on approximately 80 radio stations in 23 states. With his entertaining sense of humor and witty commentary he has captured audiences for over 30 years. His ability to present an informative talk show while being light and colorful is why he has a large loyal listening audience.
Derry Brownfield is a practical farmer, a practical
business man and a very entertaining speaker. He travels extensively throughout
the country speaking about his common-sense point of view. Web Site: www.derrybrownfield.com
"According to an article in the ROCKY MOUNTAIN NEWS, by John Rebchook, "Real estate foreclosures continue to soar. The latest trend is that most people are unable to hold on to expensive homes. Not only did people overpay for the base price of their home but also many owners refinanced to add bells and whistles to their houses, which now are worth less than the loan amounts."