By an example, let's look at the home loan banking business a little closer than usual.   We'll start with the normal perspective:   Suppose Joe and Suzie decide to buy a home.    Joe and Suzie have 50,000 dollars available for the purchase, but the home they want to buy costs $200,000.   With the help of their friendly real estate broker, they go to XYZ Bank and ask for a loan of $150,000.   With such a sizable down payment and good credit they easily get the loan and become the proud owners of their new home.    

Now let's look at this same purchase from a basic economic perspective.   Joe and Suzie didn't buy the home; the bank bought the home with $50,000 of Joe and Suzie's money and with $150,000 of what appears to be the bank's money.    The bank then grants Joe and Suzie certain rights on that property as long as they fulfill the bank's requirements  -- requirements  such as:  

  Paying for insurance to protect the bank's financial interest in case the property is damaged or destroyed -- 

  Paying interest to the bank for the use of the $150,000. 

  Making regular monetary payments to the bank. 

  Complying with local property laws, paying property taxes,  et cetera.   

  Signing a contract that says,  "No matter what happens to the property, the bank is in first position to receive its money."   Whether or not Joe and Suzie ever get their money back out of the property is secondary and all but irrelevant to the bank.

Prior to going to the bank, Joe and Suzie went to Susie's uncle, Max  and asked if he can lend them $150,000 to buy the home.   Uncle Max said, "I wish I could.   I'd have to have $150,000 in order to help you,  but I have only $15,000.   When Joe and Suzie go to XYZ Bank  and ask the same question, the bank looks at their financial statement and their $50,000 down payment and says, "We'd be delighted to loan you $150,000."  

Now comes the shady part of this deal.   Where does the bank get the $150,000 to loan to Joe and Suzie?   One would normally think that people put money into the XYZ Bank and XYZ Bank  loans out $150,000 of that money to Joe and Suzie.   That's not the case.   

The money comes from two sources;  fractional reserve lending based upon the money that people like Uncle Max deposit in the bank and by borrowing money from the Federal Reserve at the prime interest rate.  

With fractional reserve lending, a bank that has $15,000 of a depositor's money can loan out $150,000.   According to the banking industry rules, a bank can lend ten times as much money as it has in its reserve fund.   In other words,  Joe and Suzie are paying the bank for the use of $15,00 of depositor's money and they are also paying for the use of $135,000 of non-existent money.   This is called  Fractional Reserve Lending. ^**1  

With the Federal Reserve, a similar scam is going on.  If you listen to the popular media, they will say the primary purpose of the Federal Reserve is to control inflation.   That's true, but it's only another half truth. ^**2   The Federal Reserve not only controls inflation, it causes it.   Deficit spending  (the spending of non-existent money)  and the interest charged on the loan of non-existent money are the primary causes of inflation.   The main purpose of Federal Reserve is to tap the public treasury by charging interest on the loan of non-existent money to the federal government and to other banks.  

The Federal Reserve lends money to XYZ Bank.  Included in the loans from the Federal Reserve is the $15,000 that the bank keeps in its reserve fund so that it can loan Joe and Suzie  $150,000.   Now we are back to fractional reserve lending.   Joe and Suzie are still paying the bank for the use of $135,000 of non-existent money.   

There's one more wrinkle in this scam.  Where does the The Federal Reserve get the money it lends to XYZ Bank.  It gets it from the same place it gets the billions of dollars that it loans to the federal government.  It makes it up!   It's make-believe money.   There isn't any money.   It's all a flim flam sham.    The Federal Reserve loans make-believe money to  XYZ Bank. ^**3   XYZ Bank keeps  $15,000 of the make-believe money in its reserve fund and loans $150,000 in more make-believe money to  Joe and Suzie.   In this case,   Joe and Suzie are paying the bank for the use of $150,000 of non-existent money. 

This scam has been going on for almost one hundred years right under the noses of anybody and everybody.   For years it worked for the super wealthy, but has been a drag on the working class.  Because of the recent excessive wheeling and dealing of financial hot shots in the financial industry, the practice of fraudulent lending has gotten so far out of hand that the entire system is about to collapse. ^**4  

  .

The housing market is simply one piece of an intimately interwoven social, political, economic, religious, and environmental matrix. 

The housing market cannot be isolated and treated by itself.   Every action in every aspect of human life affects every other aspect of human life.   This is becoming obvious to anyone who takes the time and makes the effort to look at the ripple effect of the soaring price to gasoline.   

One of the major aspects of Earth plane reality is being all but ignored by our so-called leader, "Resident" Bush.   He and his fellow multi-millionaire friends are ignoring several already-in-process environmental transformations that are about to trump anything and everything that human beings do.    The most critical of these is the fact that human activity has turned on Nature's Doomsday Machine.   Here's an overview along with references:   

Nature's Doomsday Machine      Nature's Doomsday Machine        ...

In addition to releasing vast amounts of carbon dioxide into the Earth's atmosphere, human-caused Climate Change has also triggered the release of the 10,000 billion tons of methane presently frozen in the Arctic Circle.   Methane is twenty times more destructive to the environment than carbon dioxide.   Each year, the amount of this gas being released is increasing.

Unless this self-expanding cycle is reversed within the next five to ten years, the rate of release will escalate very rapidly to the level where it will become un-stoppable.   If we do not take action intentionally designed to stop this cycle, the entire 10,000 billion tons of methane presently frozen in the Arctic Circle will automatically be released into the atmosphere.   The environment will be drastically altered.  

  The Earth’s temperature will rise about eighteen degrees Fahrenheit causing most large life forms on the entire planet to become extinct.

  The ocean level will rise by about forty feet forcing  billions of people out of their homes.    

  Millions of square miles of the world's most beautiful and productive land will be  under water.   Major cities like London, Venice, New York, Washington, New Orleans will be mostly under water, as will much of Florida and Louisiana.

  Glaciers and mountain snow caps will disappear leaving over thirty percent of the world’s population without fresh water in the dry season.   

  Billions of people will die of environmental exposure or starvation. 

  Dozens of other highly destructive changes will occur.  The consequences will be devastating, deadly, and irreversible!   

Reference:   10,000 Billion Tons        
             http://www.HowToReverseGlobalWarming.info/billion-tons.html 

Reference:    PBS - Nova -  Dimming the Sun      
              http://www.pbs.org/wgbh/nova/sun '