Real estate value represents over half of accumulated US wealth, and real estate value depends upon population.
Wealth is destroyed when real estate abandonment becomes common, and real estate is abandoned only when population declines.
The most important changes are periods of unusually high unemployment and poverty. California personal value dropped from 2007 for the first time since 1938 (Legislative Analysis Office, California, 2009).
Every period of economic decline corresponds with population decline.
These are as follows.
- 1837 to 1843 - Panic of 1837: mass murder of native americans - most flee west
- 1857 to 1860 - Panic of 1857: mass murder of native americans - most flee to Mexico
- 1873 to 1896 - Long Depression: mass deportation of Asian that built US railroad system
- 1929 to 1941 - Great Depression: mass Mexicans deportation due to Hearst Media publications
- 1986 to 1988 - S & L Crisis: mass Mexican compulsory deportation by Pres. Bush
- 2007 to 2011 - Great Recession: mass self-deportation of Mexicans - Texas unaffected
Undocumented immigrants contribute about $200 billion in GSP across the entire US right now. That consumer demand employs about 10 million US residents.
Three important events occur from 2000 to 2006 during the Bush presidency.
- Gramm-Leach-Bliley Act of 1999 (allows banks to grow gigantic; to speculate on stock, and to sell insurance)
- Commodity Futures Modernization Act of 2000 (allows mortgages to be bundled and sold on wall street)
- Responsible Lending Act of 2003 (authorizes predatory sub-prime mortgages)
These regulatory changes cause real estate prices and stock prices to skyrocket as investors borrow as much money as is possible. The Bush legislation in 2003 legalizes predatory lending, which is intended to restore economic losses that followed the attack of September 11, 2001 (usury decriminalized).
This deregulation creates rapid economic growth. undocumented immigrants flood into the country at the highest rate since the Mexican Revolution. A construction boom begins in the American south and west as hundreds of thousands of excess dwellings are constructed.
The following begins in 2006.
- Factory investments in Mexico reduce US product demand (companies headquartered in US, China, Germany, ...)
- Major drought begins (Texas, Oklahoma, California, ...)
- Section 501-506 of Patriot Act II criminalizes immigrants
- Multiple states outlaw drivers licenses but continue to allow immigrants to purchase vehicles
The Mexican economy improves in 2007 at the same time police begin stealing hundreds of thousands of vehicle, deporting the drivers, and selling the vehicles after the deported owners stop making payments. The US population begins to decline. Population decline creates over a million extra dwelling vacancies and abandoned vehicles by 2009.
Real estate and vehicle prices plummet in 2007 and a foreclosure boom begins in 2008 as foreclosure rates increase by 400% and most vehicle sales franchises go bankrupt.
Pres. Bush finally realizes the magnitude of the coming disaster caused by eliminating depression era financial regulations and trying Mexican Repatriation a second time. Bush signs the Emergency Mortgage Loan Modification Act of 2007 in an attempt to prevent the coming banking system collapse, but it is too late.
Presidents Bush and Obama deport over 1 million people. Another 1.7 million legal residents leave after their vehicles are stolen by state and local law enforcement officers.
Real estate value depends upon people to demand dwellings in which to live (US Census Bureau data).
- 2006: 4.5% vacancy; baseline
- 2009: 5.4% vacancy; 5.0 million fewer people
- 2011: 4.8% vacancy; 2.4 million fewer people
Immigration departing the US accounts for a drop of about 1.6% in the population in less than 2 years. The collection of undocumented immigrant population statistics falls outside the scope of US census bureau charter and department of labor charter. No government agency has an accurate count.
Each US resident creates consumer demand for real estate, vehicles, food, and consumer goods, and that consumer demand includes undocumented immigrants.
Immigrant departure from Southern California, Arizona, and Nevada causes housing values to drop over 50%.
The undocumented immigrant population of Arizona produced $42 billion in GSP during 2008, and immigrant population decline is one of the underlying causes for economic collapse in the American south and west (Immigration Policy Center, 2011).
Birth nearly equals mortality during this period, so this population change is entirely due to migration that contributes the following to the US economy.
- 2006: baseline for comparison
- 2009: $100 billion lost consumer demand
- 2011: $50 billion lost consumer demand
The following shows how migration contributed to part of the decline in US real estate values, which collapses real estate value in the American south and west.
- Nevada, 0.25 million immigrants depart, 50% real estate value decline
- Florida, 1.1 million immigrants depart, 19% real estate value decline
- Arizona, 0.57 million immigrants depart, 22% real estate value decline
- California, 2.9 million immigrants depart, 60% real estate value decline
The resulting foreclosure boom and real estate collapse in 2007 leaves inadequate asset recovery from foreclosure sales, which reduces bank assets to dangerously low levels.
Banks issue margin calls for stock market investments to cover lending losses in an attempt to avoid bankruptcy.
Wall Street banks are facing a “systemic margin call” that may deplete banks of $325 billion of capital due to deteriorating subprime U.S. mortgages, JPMorgan Chase & Co (JPM.N: Quote, Profile, Research), said in a report late on Friday.
JPMorgan, which sent a default notice to Thornburg Mortgage Inc. (TMA.N: Quote, Profile, Research) after the lender missed a $28 million margin call, said more default notices and margin calls were likely. The Carlyle Group’s mortgage fund also failed to meet $37 million in margin calls this week.
Margin calls result in rapid trading that collapses the stock market. Over 60% of value is lost from 2007 to 2009 as the population declines.
Investment firms, banks, and businesses lose sufficient capitol that they cannot cover the losses, and the US government is forced to issues loans in order to prevent total economic collapse and double digit unemployment.
This chain of events halts the startup of new businesses, at the same time that millions of jobs are lost in manufacturing, real estate, construction, finance, and investment.
Departure of 5 million immigrants raised unemployment by about 4 million from 2007 to 2009.
A return of 2.6 million immigrants reduced unemployment by about 2 million from 2009 to 2011.