Subprime mortgages refer to loans provided by some lending institutions to borrowers with poor credit and low incomes, in layman's terms, loans to poor people to buy houses.

After the '911' incident, in order to stimulate domestic real estate consumption, the United States has implemented 'zero down payment' in the past ten years, no need to repay principal and interest within half a year, and only pay interest and not repay principal within 5 years, and even allow buyers to re-mortgage the increased part of the house price to the bank, this mortgage loan method is called "the world's most romantic mortgage system for home purchases", which has shaped the concept that the people of the United States consume ahead of time, consume beyond their powers, and the poor can also live in big houses, creating a brilliant decade of the economy of the United States.

The housing market in the United States is highly prosperous, the subprime mortgage market is developing rapidly, and even some borrowers who are usually considered to be unable to repay have obtained home loans.

"Academician He, I still don't understand, what does this have to do with the economic crisis?" Zhang Yifeng looked at He Gaofeng blankly, the subprime mortgage loan for home purchase was very unfamiliar to Zhang Yifeng, even if He Gaofeng said the basic things, Zhang Yifeng couldn't turn the corner.

"Your Majesty, let me tell you this, the subprime housing loan market in the United States contains huge risks, usually housing prices remain high, buyers can use the appreciation part of the property to borrow from the bank, and repay it to the subprime lending institution, but if the house price falls, the property is impaired, then the buyer may not repay the subprime loan to the bank, and the default rate will increase, which will naturally bankrupt these institutions that issue subprime loans."

"In addition to the decline in housing prices, the Fed's interest rate hike will also trigger the subprime mortgage crisis, from the outbreak of the Eraco War to the present, the Fed has raised interest rates 10 times in a row, and the sharp rise in interest rates has increased the burden of home buyers' loan repayment. Moreover, since the second quarter of this year, the housing market in the United States has begun to cool down significantly. As housing prices fall, it becomes difficult for buyers to sell their homes or obtain financing through mortgages. As a result, many borrowers in the subprime mortgage market are unable to repay their borrowings on time, and the crisis in the subprime mortgage market will intensify over time. ”

"In other words, the war in Ilako indirectly triggered the subprime mortgage crisis." He Gaofeng said.

"Oh, what's the point?" Zhang Yifeng asked with interest.

He Gaofeng smiled and said: "Modern warfare costs a lot of money, and any country's financial revenue is far from enough to pay for the war, and the same is true for the United States, so it must rely on financing to raise war expenses." ”

"Generally speaking, there are three ways to finance war expenses: increasing taxes, cutting government non-military spending, and issuing war bonds."

Zhang Yifeng raised his eyebrows, "There are pros and cons to these three methods, if it were me, I wouldn't adopt them." ”

"Your Majesty the King, tell me about it." He Gaofeng said with a smile.

Zhang Yifeng was stunned for a moment, pretending to be too much, how could he understand these things, and only after thinking about it did he say: "The tax increase will increase the burden on the people, and it will make the axe lose the support of the people, which is not uncommon in Chinese history. ”

"His Majesty the King is wise." He Gaofeng gave a thumbs up.

"Cutting non-military spending is also not feasible, and it will reduce the investment that would otherwise be spent on education, health care, infrastructure, etc., which is not conducive to the development of other national undertakings."

He Gaofeng nodded.

"As for the issuance of bonds...... Zhang Yifeng was a little embarrassed.

"There are also drawbacks to issuing bonds, not only to pay interest, but more importantly, to issue bonds in large quantities can cause great harm to the national economy, triggering inflation or economic stagnation." He Gaofeng spoke for Zhang Yifeng.

"The United States does not want its domestic economy to be affected by the war, so they have chosen the fourth way of financing."

"The fourth?" Zhang Yifeng's face was full of face, didn't he just say that there are only three kinds?

He Gaofeng didn't sell it, and said directly: "The fourth way is to get war expenses from all over the world, that is, when the United States fights a war, other countries pay for it." The most typical case is the Gulf War in 1991, the total cost of the war was about 60 billion US dollars, of which about 90% was borne by Prussia, island countries, cold countries, Saudi Arabia, Kuwait and other countries, however, although the Middle East oil-producing countries paid the United States to fight the war, they did not suffer losses, after the outbreak of the war, the price of oil rose, the oil-producing countries made more money selling oil, and the oil-importing countries spent more money to buy oil, in fact, the world's oil-importing countries also secretly bore the costs of the war. The United States secretly passed on the costs of the war to the world, thereby minimizing the negative impact of the war on its own economy. ”

"In the 03 Eraco War, the United States wanted to repeat the old tricks and transfer the cost of the war to other countries, President Bouvet promised to cut taxes at the beginning of his administration, and the way to increase taxes is impossible to use, and the other two ways have advantages and disadvantages, and the United States will not use them. At first, the United States was optimistic about the cost of the Erako War, believing that the money borrowed from foreign axes would support the launch of the Erako War. ”

"The hegemony of the rice dollar in the world determines that other countries will hold a large number of foreign exchange rice dollars, these rice dollars have no reasonable investment channels, and they are also put away, many of them have bought the treasury bonds issued by the rice country, and in 03 years, China alone bought more than 100 billion rice dollars of rice treasury bonds, which were used to support the Yilako war, however, no one thought that the funds consumed by this war would be so huge."

"In this way, the perfect financing plan of the United States to pass on the cost of the war to foreign countries has been challenged, the money is not enough, the tax cannot be raised, the non-military spending can not be cut, and the fiscal deficit can only be increased, and the Bank of Mi has borrowed money from the money printing machine, just right, last year's price rose, in order to curb inflation, the Federal Reserve of the United States raised interest rates, the first round of interest rate hikes is in line with the market conditions of the United States, and has been recognized by all parties, and the government of the United States can also borrow money to deal with the affairs of Yilako."

"The interest rate hike punctured the borrowing bubble in the United States." Zhang Yifeng suddenly realized.

He Gaofeng nodded, "Yes, from 04 to the present, the frequency of the Fed's interest rate hikes has been too fast, and it has approached the tolerance limit of subprime lenders. ”

"The second Iraqo war is to add insult to injury, and the frequency of Fed rate hikes is still rising."

Zhang Yifeng fell into deep thought, and after a long time, he asked cautiously: "Can the subprime mortgage crisis in the United States crush the United States?" ”

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