What happens to bank income as bank provide fixed rate intrest to mortage when inflation rises?

That is why they bargained for a fixed rate and paid more for it. Adjustable rates are much cheaper....at first.

However, it is the artificially low interest rates that created the bubble we are going through to begin with, and every dollar we earn or save was devalued when the fed kept playing with interest rates, and the banks got the %26#039;new money%26#039; in loans, so at this point they have created a real problem with forclosures, never mind the calculated cost of a fixed/vs adjustable rate of interest.

The forclosures and newly %26#039;bad%26#039; debt and secondary impact to the rest of the economy is what is causing the Bears Sterns type problems.

Vote for Ron Paul. He is the only one who has a plan to address it, or at least not make it even worse as the other candidates would do with CONTINUING the overspending of money we don%26#039;t have. He would drastically slash costs to get us back on track while increasing the money left in our pockets in this economy.