The Real Causes of The USA Economical Crisis

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The Real Causes of The Economical Crisis In USA

By FEL

A lot of noise has been done about the recent economical crisis in the USA, the analysis has been focused on the sub-prime real estate market as the initial cause, but in reality it was not a cause it was just a symptom, what was really happening was caused in two main reasons:

1- The export of well paid Manufacturing and High Tech jobs to Asian Countries

2- The lack of control in selling houses and in the mortgages approval process

It was a common practice among banks and mortgage credit brokers to "help" qualify the prospect client by inflating their real income in order to gain a commission or meet their quotas to be seen as very efficient brokers in the view of their bank and institution. Due to this lack of honesty they never took the time to really explain these "favored" clients the implications of the “attractive programs” being offered and highly popular such as interest only, fix rate for the first 3 or 5 years etc. Certainly these programs could make appear any mortgage payment affordable for the first few years hiding the fact that after this short time, in most instances the mortgage payment would double but not their salary, not to mention inflation on utilities, gas and other expenses. Many were caught in this trap, the conditions seemed to be so good that the gross of the people never thought what the outcome could be from 3 to 5 years from the time they purchased their homes, in other words they fail to make a realistic plan based on what they could afford.

To aggravate more the situation the erosion of the USA good paid jobs continued unstoppable and will continue for a long time if drastic measures are not taken to reverse the export of good jobs.

The loss of employment has also other important factor that rarely is analyzed; this is the continued automation on practically all activities from automatic bank teller to do yourself payment machines in stores, automatic airplane tickets dispenser and much more.

These new technologies are displacing millions of employees before required, but now no longer necessary. Unfortunately to make things worst many of these new automatic machines are being partially or fully made in other countries creating more and more USA un-employees unable to continue paying for their mortgages, unfortunately all indicates that all this will extend the crisis for an unknown larger period of time.

What is next? Who will buy and pay for goods and services in the USA if people are not getting good jobs or not jobs at all, in anyhow how people in this country will buy the products that USA factories are producing overseas?

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