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Rising Cost of Living

By Dr. WilliamsPublished 4 months ago 3 min read

Inflation, that word conjures up dread for millions all over the world. But what causes inflation? Many think it is caused by supply and demand. Well, that is part of it. The real culprit has always been the Federal Reserve and the financial institutions especially here in the US. The banking industry ever since the Rothschild's founded the Bank of England have always been profit motivated seeking as many ways as possible to steal people's money.

Today the cash cows of financial institutions are mortgages, credit cards, various types of loans from personal, auto, and business. The Federal Reserve alone has put the United States in trillions of dollars in debt. And now when we face a growing homelessness population and an influx of thousands of immigrants both legal and illegal creating a major humanitarian crisis it is vital for the need of shelter and affordable housing both in homes and rental properties.

The inflation rates of today are induced by the criteria that banks put on mortgages and as such have caused most recently the financial crisis of 2008. We should remember that right after World War II millions of GI's returned home. Governmental assistance like the GI Bill provided service men the financial means for further education. At the same time Banks all over the country were assisting returning servicemen with mortgages knowing the profits that will be made by those interest-bearing loans for mortgages. As a result, the housing and baby boom of the late 40's and 50's took off.

At that time the criteria for mortgages set by banks were based on 25% of a person's gross income, The mortgages were basically at a fixed rate of around 4%. Today we are facing a foreclosure rate that has reached alarming levels to which banks have adjusted the criteria for mortgages and as such have engineered a nationwide housing shortage of affordable homes and apartments. There is also the fact that many consider the lack of construction of homes and apartment to meet the demands. The problem with that is that developers continue to construct apartments and homes well beyond the financial means of the people who need housing. All financed by the financial institutions causing inflation to increase.

When we look back to the late 1940's the United States has a pretty balance population, the middle class was growing, incomes were rising, and the level of poverty was quite low. Today our society is way out of proportion. Poverty levels have grown to unacceptable levels while the 1% control over 95% of individual wealth. And now banks have set the bar higher for qualifying mortgages at 30% or higher of gross income to qualify for existing mortgages. This at a time when personal incomes for the majority of our population have remained stagnant or decreased making it almost impossible to put a roof over their head and at the same time put food on the table.

What this means that banks still have been using adjustable-rate mortgages well before the financial crisis of 2008 to lure prospective home buyers into a mortgage that many will not be able to repay. Hence banks foreclose and make an additional profit on foreclosure properties. Another dimension to the real-estate and inflationary trends today is the growing number of Real Estate holding corporations that have been buying up Apartment complexes, mobile home parks as well as housing communities. Like banks they are all profit motivated.

As you can see when the inflations rate rises home prices increase, and apartment rentals increase leaving millions having to pay well over 45% of their income just to put a roof over their head. Too many times the incomes won't equate to match the rising increase of rents or the fluctuating interest mortgage loans. This is wat is happening here and has spread globally. Millions the world over cannot afford a home or an apartment just because of the domino effect that banks have set in motion all across the globe.

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About the Creator

Dr. Williams

A PhD in Economics. Author of National Economic Reform's Ten Articles of Confederation.

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