The GSE component of the "stimulus" package being considered by the US congress today would allow this "exuberance" to continue.   Fanny Mae and Freddy Mac have access to funds from the US Treasury, i.e. they can digitally  "print" money, which they then use to pay back mortgages they "buy".  

The bundling of mortgages into GSE instruments for sale on the open market is an excellent idea, without regard to the values of the mortgages involved.    If some investor in the  US or overseas wants to buy these hedge fund instruments, what is the problem?  None whatsoever, as long as there in no "fresh money"  from the US Treasury involved. 

We should take  the time to examine the "pass trough" regulations that these GSE\'s use to tap into the US Treasury.  Some pundits claim that these regulations are no longer in place.  If that is the case, then surely it would not be a problem to wean Fanny and Freddy from the Treasury\'s tit.  

It is time to get the elites off  the gravy train. If left unchecked, this scheme is sure to end in a train crash.  We must not allow a devaluation of our currency to occur for the sake of the privileged and the rich, as has happened in many other nations over history, one of them being Guatemala in the 90\'s.    

By all means, we can and should Increase the limits of GSE backed mortgages, but  we must be sure to remove the US Treasury from the loop.  The GSE\'s were designed to increase home ownership in the emerging middle class after World War II.  That they did., allowing us to enjoy one of the highest levels of home ownership in the world.  But, we must not allow these institutions to be raped by the ruling elites.  Funds in the US Treasury belong to the People, not to hedge fund managers or real estate speculators.

Atlanta, GA
Jan 25, 2008