The Wall Street Journal reports of
a new round of bailouts for GMAC. If you are not familiar on how the full Ponzi scheme economy is working, I touched on this in a
June piece (this was well before Cash for Clunkers) - let's review.
p.s. in "you can't make this stuff up" category....Chrysler now has access to GMAC as part of its government intervention. The same GMAC that has been bailed out via $14 some Billion of US taxpayer dollars. So what is Chrylser offering now? You guessed it... 5 year, 0% loans. Because if Americans can't afford to pay interest, let the taxpayer cover it. Just chalk up another one for the grandkids to pay off... we now are subsidizing car purchases - trying to create unnatural demand via taxpayer handouts.
Do you understand now how the 2 largest purchases (homes, cars) in America are working? We Americans are a bunch of stones. We are out of blood - we keep squeezing ourselves so we can "shop til we drop - our the terrorists have won".. but gosh darn it, we've hit a dry spell. We've borrowed as a collective to the hilt. Before this crisis, some of us were taking near mortgages out on cars - 4 year, 5 year loans? Haha... nope. Try 8 year car loans. ) (
Sep 17, 2007: Is a 10 Year Car Mortgage Far Off?)
Feb 13, 2008: Car Loans Being Stretched to 7 Years) Once we have said car, we are now allowed to take "cash out" loans against said asset... an asset that depreciates by the day. The car ATM - Cramerica edition. (
Jul 24, 2009: Wells Fargo Offers Car ATM Option) Do I even need to explain the what we did in the housing market the past half decade? If so, you need to exit that cave you might be enjoying...
So instead of accepting the pain a "reset" would cause the economy, we've turned to a full Ponzi scheme both in housing and autos. We've posted tens, if not a hundred+ posts on the housing disaster, but we are doing the the exact same scheme in the auto sector. Here is how it works - many Americans cannot afford a car (house)... or at least a car (house) "they deserve". (Some) banks are finally realizing they have to begin making loans (mortgages) where there is a good chance they get paid back ... I know, very old school. So they offer outrageously high interest rates... like 5-6%. ;) Horrific. Not enough Americans can afford a car (house) at these unfair rates...
