EVERY mortgage created is bought and placed into a MBS, (Mortgage Backed Security) bond, or a CDO, (Collateralized Debt Obligation).. Every single one.
Right now everyone who bought into the moratorium concerning their mortgage and has not paid their mortgage for, say, 6, 9, 12 months, is actually in default.
ALL of those mortgages are in MBS bonds. Another word for them is called derivatives.
Now once the mortgage goes into default the note becomes junk.
Any MBS, or CDO will likewise become junk.
Now, WHO is exposed to these MBS's or CDO's?
First, BANKS. In fact banks are over leveraged with these derivatives.
Then we have pension funds, retirement funds, to name two. Think about WHO maintains pension and retirement funds. Damn near everyone.
Let that sink in.
I am calling it right now.
An impending MBS bond market crash is coming because of the government sanctioned moratorium. This will affect everyone.
Now, lastly, the government had no place to inject itself, as a third party, into a two party contract, and dictate any change to the contract.
When it initially happened I knew the government was setting up an epic fail situation, and any mortgage holder who went along with it, unwittingly, assisted in the coming crash. Right along with the mortgage industry.
An MBS bond market crash is coming. Bank on it. No pun intended.
What are some concrete steps I can take to protect myself from impending economic collapse?
First, please be advised that I am not a financial advisor, not a financial planner, nor a financial expert.
That depends on so many variables and the person.
There is not a one size fits all, cookie cutter plan out there. So I will share what we have done.
Minimized our exposure to debt. One cannot be completely debt free because money is nothing but a debt instrument. That said.
Zero'ed the mortgages, car notes, and credit cards. Have two debit cards. One with a local credit union and a major bank.
Adopted a minimalist lifestyle. We no longer consume material goods based on desire. We buy only what we need. Quit going out a lot. Curbed excessive entertainment.
Bought up nonperishable foods, beans, lentils rice.
Not a fan of gold because I know that Barclays and four other bullion banks set the next days opening and closing bell price of gold at 3:00 pm, GMT. In other words it is fixed. Has nothing to do with "supply and demand". Besides, cannot eat it. Also, food has more bartering power. Everyone likes to eat, right?
Moved to the woods 11 years ago. When SHTF we will be okay.
Keep venison and feral hog in the deep freezer.
Acclimated ourselves to the wild edibles in our area to forage.
Have a two acre garden.
God bless you. I guess I’ll try to finish off those car payments before shit hits the fan. I did cut off a lot of consumption and I’ve got three months food stores up. I also keep silver— I’d rather have some than not. Red pill me though: what’s the benefit a credit union would have over a bank?
https://money.usnews.com/banking/articles/the-pros-and-cons-of-a-credit-union-versus-a-bank
Thank you! I’m going to have do some research on all of this.