I used to say that nothing shocks me any more from this administration. But the plan to have the taxpayers take on all the bad loans is too ridiculous even for them!
Here is how this will play out:
Joe TrailerPark sees a for sale sign on a hi-rise tower, and says man, that would rock to have 30 floors to myself! Hmm, they are asking for $2 billion, maybe I can get a loan?
He heads to the local bank and asks for a $2 billion mortgage. Normally the bank would ask for some kind of collateral - he surely shouldn't qualify for the loan with his $15K income, but now, no worries! If he doesn't make the payments, they can just give the "illiquid" mortgage to Uncle Sam!
"Hyperinflation" doesn't begin to describe what is going to happen to prices when anyone can get whatever loan they ask for.
Here is how this will play out:
Joe TrailerPark sees a for sale sign on a hi-rise tower, and says man, that would rock to have 30 floors to myself! Hmm, they are asking for $2 billion, maybe I can get a loan?
He heads to the local bank and asks for a $2 billion mortgage. Normally the bank would ask for some kind of collateral - he surely shouldn't qualify for the loan with his $15K income, but now, no worries! If he doesn't make the payments, they can just give the "illiquid" mortgage to Uncle Sam!
"Hyperinflation" doesn't begin to describe what is going to happen to prices when anyone can get whatever loan they ask for.