The SwapRent.com web site was registered on the 19th of May, 2006 and the SwapRent related new “economic renting” ideas were formed and shaped into practical methodologies a few days prior to that date. As a reflection on the 3rd anniversary of the invention of the SwapRent related concepts, it was a pure co-incidence that the American economy has gone through a turbulent time primarily caused by the very same housing finance related problems that the package of SwapRent and REIDeX was originally invented to fix and avoid.
From the subprime borrowers to a subprime President during this period, both seem to have defaulted on their promises to deliver, the great American economic society is sinking further everyday. While many of the former have been foreclosed, the latter seems to urgently need a real work-out plan at the moment rather than letting him deliver more sweet oratorical speeches and make more false promises. To give him a due excuse, a ventriloquist’s puppet doesn’t really have much real substance over the appealing oratorical skills. But those are the right kind of skills that one would need to obtain a subprime mortgage, isn’t it? It appears that he had successfully obtained a subprime Presidency.
As one out of the many outrageous abuses, the blatant misappropriation of American taxpayers’ money to bailout AIG by the crony minority elite establishments on Wall Street and in Washington DC in order to save Goldman Sachs and other Wall Street oligarchs has left traces in history that will forever taint the puppet subprime President’s legacy.
Anyway, politics is never my forte. Back to the business topic. To draw yet another analogy, SwapRent based flexible shared ownership structure could be similar to what Insulin is to a diabetes patient, it could prevent foreclosures from spreading in the economy and create wealth from home value to boost the economy just as Insulin could help prevent glucose level from spreading and convert the necessary sugar into energy for the cells to consume in the patient’s body. If the quack doctor, for whatever reason, chooses to ignore to use Insulin to control the glucose level in the blood as a fundamental cure for the patient but instead focuses on superficially having surgical operations on the patient’s eyes to cure the blurred vision which is simply caused by high blood glucose level, the doctor may need some re-education or be immediately replaced before he/she will ask to remove the patient’s kidneys which are also failing simply because high blood glucose level again. Sadly, it appears that is exactly what those quack economic advisors to our puppet subprime President seem to have been doing to fix our economy so far, focusing on the downstream side effects rather than the upstream root causes.
On a broader scope, as the Judaic-Christian lending based Western financial system faces a global collapse, it makes an unbiased non-religious person a bit curious how a Muslim prophet and his caliphs back in the 7th century foresaw what evil deeds usury could bring to the social stability of a human society. Old wisdoms do indeed come back in fashion sometimes. When half the sky has fallen off already in America and your Shylock credit card companies still want a pound of your flesh, it makes you start wondering may be it is time for a change now.
The funny thing is that new socio-economic system changes, unlike technology gadget innovation adoptions, usually will not come without a fierce flight, or oftentimes, a revolution. That is why the empires do collapse I guess, as the stubborn political crony elite will try to hang on to whatever they already own and whatever they believe in at the expense of the interests of the majority of the people that they rule until the final big implosion inevitably occurs. Crony capitalism probably means that they could change the Darwinian evolutionary process to be the survival of the most well connected, rather than the fittest. Even the Austrian economist Joseph Schumpeter similarly, would have had to modify his “creative destruction” concept to become “creative but no destruction” as the 21st century’s powerful crony interests are simply indestructible.
While they are trying to play God, doing the selections of who gets to survive in the American economy, they fail to understand that the forces of natural selections are much mightier above their head. If the crony institutions they wanted to protect did not fall when they were supposed to, the crony government that forced them to live eventually might. With the chain of recent events in the American economy revealing exactly that, we seem to be getting much closer to that point.
Since the Wall Street/Washington ruling class failed to appreciate and adopt the repeated detailed de-leveraging proposals since way back in 2006/2007 in order to help them create a free market based shared ownership social structure to de-leverage the economy and to prepare for a soft landing of the credit bubble, it seems impossible now to make more efforts to continue to try to make them understand the significance of what a simple profit sharing co-ownership economic concept is. It would only make them to admit their own mistakes prematurely in their minds. It is like asking a losing gambler to quit when he still has a few more chips in his hand that he could double up to make back the losses if you give him another chance. Similarly they are still heading in a self-deceiving blinded direction, pushing the rest of the world to sacrifice to help them “restore the global credit system” again, lowering the interest rates to close to zero in order to lure even more borrowing, printing more money to inflate a zombie economy to make it superficially look good and eventually hoping to be able to devaluate away the value of their massive debt.
Superficially propping up stock market index through granting access to almost free money by their crony financial institutions seems to be the only trick up their sleeves now to make it appear as though the stock market is approving what they are doing. It is the same bubble building technique using borrowed money that took them here to begin with. Fighting a housing credit bubble with more stock market credit bubbles. Instead of going to rehab, they are trying to cure a heroine addiction by more cocaine addictions. Looking at the dilapidated state of our real economy, a stock market propped up to a relative bubble level by extreme low interest rates will only give people a false sense of security and demoralize their will to curb the excess and reform to turn our economy into a less consumption and more real production oriented economy. Sometimes it makes you wonder how they got their PhDs in Economics or is it politics that have darkened their minds. As it stands now, it seems that they will continue to keep on pushing it until their final Judgement Day comes. A losing gambler will not leave the gaming table until he is totally out of chips and out of options.
The only way left for the industrious Asian countries to do with their massive hard earned USD IOUs is perhaps to spend them all on real assets such as commodities around the world to turn their soon to be worthless US dollars into some real assets. Then the hell may really break loose. However, before they get to spend all the US dollars away, it would be quite stupid for them to do anything other than keeping a fake smiling face and praising Washington for what a good job it is doing now in order to keep the dollar afloat at its current fictitious good faith value. Privately, among themselves, they must be calling Washington you #@*%-*&#%$+^#! dare to peddle to us more of your junk debt in your crazy Ponzi game again ——– Wouldn’t you if you were in their shoes?
So now it may be time to turbo-charge the Islamic financial system with a Sharia compliant version of SwapRent. Hopefully it could make the Islamic banking become more mainstream and offer a timely alternative to the heavily abused lending based Western financial systems. The Western financial systems would not go away any time soon but we will need to urgently create a few more balanced alternatives before more and more people around the world may get hurt again by the boom and bust social instabilities induced by the continuing human abuse of borrowing and lending, i.e. evils of usury, due to its improper dominance and promotion under the current Western financial systems.