You might call it CONSPIRACY THEORY – but only if you ignore the facts.  Today I explain to you the government’s social engineering of the housing marketing, and where both the mortgage crisis of 08 and the newly proclaimed rent crisis fit into that… and where this social engineering ultimately leads.  I’m Bryan Ellis, and this is a very disconcerting Episode #172.

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Hello, SDI Nation!  Welcome to the podcast of record for savvy, self-directed investors like you!

What is a crisis?  One definition of CRISIS is a time of intense difficulty or distress.  But there’s another definition – definition #3 if you use Google’s ‘define’ keyword – which is: “the turning point of a disease when an important change takes place, indicating either recovery or death”.  When the media – or the government – uses the word crisis, that’s the definition they’re using.

But the recovery or death that will happen isn’t actually related to an economic situation.  It’s related to a policy objective.  In other words, when you hear the word “crisis” in the news, what that means is that somebody in government has decided that it’s time to implement a new policy, and that conditions “on the ground” are ripe for that change.

One of those non-crisis crises is happening right now, actually.  CNBC recently reported on a study done by the Harvard Joint Center for Housing Studies.

It comes from Harvard… it’s got to be accurate, right?

Nope, not at all.

The basic crux of the matter is this:  The study says that more people than ever are renting rather than owning, and that at least half of those renters are paying more in rent than they should be.  Of course, what they “should” be paying is wholly subjective.  Nevertheless, Harvard is declaring there to be a crisis.  And you know what happens with crises, right?  The government gets involved and takes control.

Allow me to share with you where current events fit into a broader history of governmental manipulation of the housing markets.

The biggest semi-recent contributor to this mess was the Community Reinvestment Act of 1977 signed into law by the 2nd worst president in history, Jimmy Carter.  That act required banks to begin lending to non-credit-worthy borrowers under threat of punishment from the government.  Long-held financial standards were kicked to the curb in favor of mostly race-based qualification criteria.

Then in the early 90’s, President Clinton pushed the Community Reinvestment Act even further, requiring lenders to make loans that would be judged as, at very best, questionable by any reasonable mind.

Congress did as it usually does… and made things far, far worse.  The real nail in the coffin was when, in the 90’s, Congress authorized Fannie Mae and Freddie Mac to buy those loans and, in effect, make the U.S. government the largest holder of mortgage debt.  In fact, Fannie Mae’s share of the secondary market reached a whopping 90%.  The government had, without anyone really noticing, taken control of the mortgage market.

So what was happening was fundamentally dangerous:  It was a situation in which credit standards no longer applied and absolutely anybody could get a loan… and all of those loans were ultimately centralized in one organization – Fannie Mae – which is, no matter how you slice it, a government entity.

To make it all worse… these loans were being given to people who, quite objectively, could not afford the loans.  They were able to buy because of fancy constructs like interest-only or even negative amortizations yielded payments that were very low… but those low payments never lasted beyond a few years.

So you’d think that the government would have a vested interest in making sure that, somehow, some way, that those loans WOULDN’T go bad and that the market would heal itself without there being a real crisis?

Wrong again, my friends… because the grander scheme had not yet been achieved.

Rahm Emanuel, former Chief of Staff to President Obama, once made a statement that was perfectly embodied in the mortgage crisis.  What he said was:  “You never let a serious crisis go to waste.  And what I mean by that it’s an opportunity to do things you could not do before.”

Ok, sure.  When a crisis arises, it’s an opening for the government to take action.  That’s obvious.  But here’s the thing… nobody would ever want to assume that the crises themselves are manufactured from the ground up in order to give the government an opening to take action.  But that’s exactly what was happening.

You see… the housing crisis was bubbling up in late 2007 and early 2008, and everybody in Washington knew it… because they had, in effect, planned for it to happen by forcing and incentivizing banks to give bad loans to unworthy borrowers.  This was a known issue… love him or hate him, President Bush was well aware of it, having issued literally DOZENS of warnings to Congress, who simply refused to do anything about it… because it played into a bigger plan.

What was the bigger plan?  Well, there was a short-term plan and a long-term plan.  The long-term plan was to pave the way for outright government dominance of housing, and I’ll tell you more about that in a moment.  But the short-term plan was to make sure that the “crash”, as it were, happened while Bush was still in office in order to improve the chances of election for Barrack Obama.

This isn’t theory, my friends, conspiracy theory or otherwise.  It’s very well known that the panic that led to genuine hysteria in 2008 happened precisely because Chuck Schumer, Democrat Senator from New York, wrote a memo questioning the solvency of IndyMac bank – a bank that was a political target for Schumer’s accomplices – and then Schumer purposefully leaked that memo to the public!

Look, when a U.S. Senator who holds a number of important positions relative to the oversight of banks and lenders, that’s big news… and that news was reported, as Schumer anticipated.  That caused a run on IndyMac banks, and the 2nd largest bank failure in history.  And it was no accident… the director of the office of Thrift Supervision, John Reich, observed that Democrat Schumer had given IndyMac a heart attack.

That moment in history was chosen because, of course, it kicked off a financial crisis of generational magnitude… and because Bush was still in office, the political repercussions were clear.

Obama won the presidency – promising a fundamental transformation of America as we know it – and he began by providing literally TRILLIONS of dollars of non-existent money to cover the losses of the big financial institutions.  Note that that money was used to pay off the big financial firms.  Very, very little of it was used to bring relief to individuals.

Along the way, the government took a huge step towards taking over our health care through ObamaCare… part of Obama’s fundamental transformation of America.

But the issue at hand TODAY is a new “crisis” identified by Harvard – the rental crisis in which the number of renters is bigger than ever and growing constantly… and in which a huge percentage of those renters simply can’t afford their rents.

Does that sound familiar to you?  Does it sound like, perhaps, the mortgage crisis?

Yes, it does… both the mortgage crisis and the new “rental crisis” – which isn’t a crisis at all – were wholly manufactured with the sole intent of destabilizing our housing system and causing there to be a crisis, real or perceived.

And remember what Democrat Rahm Emmanuel said – “you never let a good crisis go to waste”.

And in tomorrow’s episode of Self Directed Investor Radio, I’ll tell you where I think this particular crisis is going to lead… and give you some tips on how to play it as an investor.

Folks, we’re going to be covering some really meaty topics in coming days.  Please make sure you don’t miss a single episode by subscribing now – while it’s still free – by texting the word SDIRADIO to 33444.  There are no spaces or periods in that… just SDIRADIO text SDIRADIO to 33444 right now.

My friends, invest wisely today, and live well forever!

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