First off, you're welcome.
If you've been reading this column regularly (for your over-all good health and well-being), you know that just a couple of months ago I recommended that the government print more money to cover its costs.
The suggestion wasn't in response to the credit crisis, but it was sound advice nonetheless and, sure enough, now the U. S. government is doing it. They're calling it "rate cuts" but it amounts to the same thing.
So, since it's obvious I know what I'm talking about, I have another solution. Of course by the time you read this that wacky stock market may have risen 4,000 points, but, if it hasn't, here's what we need to do: return to a faith-based economy.
Think about it.
What got us into this financial crisis in the first place?
Lack of faith.
All those homes throughout the country were appraised at increasingly higher values and now, suddenly, they're not worth that much. Did they change in any real way? Did the houses move themselves to toxic dump sites?
No. The only change was that everybody lost faith in their value.
So this is what the government must do: pass a law requiring that homes can only be sold (and/or foreclosed upon) at the price for which they were appraised when the mortgage loan was made.
If all those houses are worth what banks paid for them, there's no crisis.
You've got to be able separate fantasy from reality - and then focus on the fantasy. It's the only path to sanity.
Ah, but you're wondering, if the price of a house worth $2 is locked in at $1 million, who will buy it?
Probably no one. What it does mean is that the bank holding the mortgage it so eagerly drafted based on the original appraisal has one of two choices. It can buy the property itself and make the best of it. Or it can renegotiate the mortgage so that the people living there can afford it.
How can the banks afford this since it already paid the inflated amounts to whomever sold the properties?
It doesn't matter - their loans are backed by properties worth the amounts they paid in the first place because they can't be sold for any other amount. It's all bookkeeping.
FINAL FANTASY. There's one other solution to all of our problems that I'm astonished no one has tried yet.
It's trite but it's a classic and we need now it now more than ever - an alien invasion.
Space aliens attack Earth and all of humanity makes sacrifices and bands to together to fight the menace.
Ah, but you're wondering how anyone can attract an alien invasion.
Fair enough. It's not an easy thing to deliver.
But remember the basis for the housing crisis: fantasy. If a little imagination can rally a housing market and a stock market, why not use some creativity to come up with believable hostile races from distant galaxies?
Draft some of the finest special effects masters that Hollywood and Silicon Valley have to offer, bribe a couple of journalists, and proceed to scare the bejeebers out of billions of people worldwide.
We have the scientific know-how for this and we ought to use it.
Fantasy is a good thing.
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