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Credit Freeze: When the Top 10% Lose Faith in Each Other
http://news.fayetteville.net/articles/254/1/Credit-Freeze--When-the-Top-10-Lose-Faith-in-Each-Other/Page1.html
Mike Leach
My name is Michael Leach I was born here on Fort Bragg. Served in the US Navy and am now a Network Engineer. I am of African American descent and a Republican. I have a strong Christian background working in both Youth and Prison Ministry. My hobbies include Reading, Writing and Chess.  
By Mike Leach
Published on 10/16/2008
 
Credit Freeze Solution: The Bottom 90% of Americans will loan the Top 10% of Americans a whopping 700 Billion dollars (You do know the real figure will be larger). This will allow the top 10% to re-establish the trust needed to load each other money and as a side note, the top 10% will extend this trust to the 90% by lending us our own money back with intrest of course.
The Credit Freeze
The term credit markets is becoming very common, but what does it really mean.  Credit markets are people, made up mostly of the top 10% of Americans.  Contrary to popular belief these wealthy investors control the flow of money in America's economy not the Federal Reserve.  When the credit markets engage in a sustained period of careless and inappropriate lending which results in losses on overinflated assets and the full extent of this bad debt becomes known the result is "Credit Freeze".
 
A big part of the problem is that an enormous amount of borrowed money flowed into the credit markets over the past several years. For a time, this borrowed money increased the profits that banks, securities firms and other investors earned buying mortgage-backed securities. This lending between the top 10% of Americans allowed them to increase their profits by inflating prices in the housing market.  But when the housing bubble burst the mortgage delinquencies led many mortgage securities to drop in value.  Now the borrowed money acted like gasoline on a burning building.  Many financial companies found themselves with insufficient capital to absorb their losses. What has followed is a string of failures and a sharp erosion in confidence among credit-market participants or rather the top 10% of Americans no longer trust each other.

Credit markets essentially run on the confidence the top 10% of Americans have in each other. Buyers of debt are lenders and they expect to get paid back, with interest. When companies fail and debts go unpaid, lenders get nervous. In usual circumstances, the lenders will simply charge higher rates and set tougher conditions for loans. But since the top 10% do not trust each other, they made the decision to halt lending anything at all.  That is until they can rid themselves of the bad debt, can you say 700 Billion dollar taxpayer bailout.

Credit Freeze Solution:  The Bottom 90% of Americans will loan the Top 10% of Americans a whopping 700 Billion dollars (You do know the real figure will be larger). This will allow the top 10% to re-establish the trust needed to load each other money and as a side note, the top 10% will extend this trust to the 90% by lending us our own money back with intrest of course.