The following is further identification of significant participants in the business credit cycle. It presents institutional roles, mechanisms, and responses within the credit-flow chain over recent decades. The world is spiraling downward while being pushed over the brink by the US Federal Reserve Bank and several other national banking entities' attempts at coordinated inflating of money supplies using currencies backed by nothing but additional credit.

Government-chartered entities provide a connection between capital markets and mortgage borrowers. These public corporations and government sponsored entities purchase and securitize mortgages from lenders. That process ensures that capital is consistently available to those lenders for home buyers. Fannie Mae and Freddie Mac raised capital by selling stock to the public and investing institutions.

These government entities were given investor-friendly names derived from the acronyms of their official names. These include Federal National Mortgage Association, known as Fannie Mae, founded in 1938 and chartered by Congress in 1968; the Federal Home Loan Mortgage Corporation, known as Freddie Mac, today insolvent, chartered by Congress in 1970.

The Government National Mortgage Association, Ginnie Mae, created in 1968, is the only US agency whose mortgage-backed securities are government guaranteed.

Ginnie Mae is the main supplier of loans for the Federal Housing Administration, FHA. The volume of loans approved for insurance by the Federal Housing Administration increased dramatically over recent years as less credit-worthy borrowers who failed to meet bank borrowing standards flocked to government programs.

Each government sponsored entity uses investor capital (money) to purchase mortgages from banks and other consumer lending businesses such as Countrywide. Those purchases cleared these banks and lenders' books of mortgage liabilities, thereby providing fresh, new money to lend to other worthy and unworthy borrowers.

These government sponsored entities function to acquire mortgages and return capital to the mortgage market.

In 1977, the US Congress passed the Community Reinvestment Act, CRA. Its objective was to provide mortgages to less-credit worthy borrowers. This good-natured plan was corrupted by community organizing groups in the name of fairness. However their "fairness" did not fully factor in "credit worthy" as a borrowing prerequisite. This activity spawned the now-infamous sub-prime mortgage.

Community organizing groups such as ACORN working at the grass roots level pestered, petitioned, extorted, and threatened major banks and their top management with negative publicity and physical injury if they failed to accede into lending to people who could not qualify under reasonable lending standards. Major banks and mortgage houses were forced to lend to uncredit-worthy people in the name of equal and fair housing opportunities.

Unworthy borrowers were handed billions of dollars with little to no documentation. There were borrowers whose documentation displayed in simple arithmetic their inability to pay down their obligations.

The US Federal Reserve Bank held interest rates artificially low. This allowed financial assets and housing assets to become inflated into the shape of many classic financial bubbles.

After years of this taking-in of new mortgage debt from banks and mortgage brokers, repackaging it into mortgage-backed securities (MBS), collateralized debt obligations (CDO), surreptitiously insured by credit default swaps (CDS), the credit system collapsed when too many unworthy people failed to meet their payment obligations.

Domestic and foreign investors were drawn to the full faith and credit implied and explicitly guaranteed by the US government. National banks, treasuries, and individual and institutional investors each and all purchased varieties and tranches of derivatives over recent years.

Major financial institutions in all industrialized nations and several national treasuries are today near-insolvent due the illiquid and near-worthless valuations of derivatives such as MBSs and CDOs they purchased.

Buyers of mortgage-backed securities and collateralized debt obligations were unaware of the contents of these Pandora box-like, deceptively-rated derivatives. For quality ratings buyers from across the world relied upon the long-trusted ratings agencies. These include Moody's, Fitch, and S&P.

These ratings agencies have been shown to have issued tainted ratings due to their vested interests in the institutions and their products that were being rated.

In 2008, as major financial institutions including banks and investment banks were nearing failure, they were rescued by loans and subsidies from the US Federal Reserve Bank and the US Treasury. Each recipient of emergency funding accepted and held much of the cash infusions. They refuse to lend to other institutions or to consumers. They must retain these multi-billion dollar cash infusions because it is this new cash in many cases that is allowing them to continue operating and remain solvent.

This leaves consumers and businesses -- including those with the highest credit standings -- with few to no sources of short-term operating funds. Consumers have difficulty borrowing to buy homes and automobiles. Businesses have difficulty borrowing to meet payrolls and for payments to vendors.

Consumers' ability to borrow supersedes their desire to purchase goods and services. The quality, style and functionality of automobiles is irrelevant to a potential buyer when he cannot get credit for the car of his dreams or the truck for his business.

Today even Iceland, known for its closed society and clean living is experiencing near default conditions of its national treasury and major financial institutions. Iceland's situation is due to defaulting US-based sub-prime mortgages and the now-frozen credit markets' unwillingness to trade Iceland's -- or any -- unmarketable derivatives.

Today General Motors and other manufacturers have difficulty selling cars to even the most credit worthy potential buyers because credit markets are locked shut. If the US automobile industry is further decimated and forced into bankruptcy and liquidation, the US automobile industry will follow the US electronics industry of 20 years ago. That is, it will be a small fraction of what it was and become a parts supplier for foreign manufacturers. It will be only foreign manufacturers who sell finished automobiles and related products to Americans.

But how will Americans earn the good salaries necessary to buy all those electronic products and the foreign-manufactured automobiles... and how will Americans buy food, clothing and shelter?

The answer is from their government. The new US government appears pleased to have made all Americans subservient paupers groveling for scraps, low wage jobs, and sharing their lost wealth with the world's other failed and never-once-successful people.

GM's near-bankruptcy condition is linked directly to decades of unworthy home borrowers demanding money and today defaulting in massive numbers on their commitments.

When there is no confidence, there is little lending. When there is little lending, businesses shut down. When businesses shut down, people lose jobs.

This situation may seem unbelievable to you reading this example of good-natured American generosity gone awry. US government legislated and mandated lending to unworthy home-borrowers is resulting in many unworthy people defaulting. That there could be so many unworthy borrowers in America seems obscene and antithetical to the American work ethic. How might there be so many Americans who purchased homes, signed contracts promising to repay the money, and now simply defaulting and walking away from their homes -- and obligations?

Welcome to the New America wherein large numbers of people who are unworthy borrowers are also unworthy Americans.

If you do business today, do not be fooled into trusting in contracts, promises, handshakes, or smiles. Even bank wire transfers are not solidly irreversible. Cash only & beware of counterfeit. For checks, allow at least five business days for any check to clear before delivering goods & services.

We live in a Crisis Of Confidence in banking and in all finance and personal interaction.

Today cash is only backed by the "full faith and credit of the United States". You decide how much longer that will be worthy of your trust.