Easy Money--Why ?

[dilloduck]

Doubtful. The unmentionable one and his minions prolly asked the Fed what would be the best way to stimulate the economy.

I assume that's partisan guesswork at work again?

 

[Paulie]

You folks seem to believe that the majority of money borrowed in this nation is done for real estate.

I have absolutely no idea how you could have come to such a conclusion in your mind. At least in this thread, anyway. I'm not even sure what anyone has said so far to lead you to even mention such nonsense.

Were you alive in 2001? Don't you remember how the economy pretty much ground to a halt for several months because people were *cough* terrified? And Bush's grand idea was to encourage people to spend money to stimulate the economy? And the Fed's brilliant idea was to lower the interest rate to stimulate the economy...no, I didn't, I'm not a moron.

The economy at that point was already headed to the crapper before 9/11 happened. The bubble from the dot-com craze had just burst, and a recession was already well on its way. Consumer confidence, i.e. borrowing and spending, was declining for this reason, and interest rates were around 6%. So as always, the Fed's only course of action is to lower rates and entice lending and borrowing to jumpstart the economy.

That is false growth when the economy "grows" because of that, and we are obviously seeing that NOW, with this downturn. This is the typical business cycle.

The main figurehead that blame should be given to is Alan Greenspan. He not only lowered those rates, he encouraged people to borrow on their equity.

These people are supposed to be the most brilliant economic minds in the world, but we're supposed to believe somehow that they didn't know exactly what would happen by doing what they did? Are we supposed to believe they REALLY thought all those borrowers would be able to pay their mortgages, especially when the ARM's adjusted? That in a time of Dollar devaluation that they KNEW was going to happen, that consumers would still be able to make ends meet?

Come on. These people knew exactly what would happen. I know it sounds preposterous to think they did it on purpose, but I'm not quite sure how else it can be explained. There were people of far less educational credibility than these so-called "geniuses", that predicted EXACTLY what would happen, and they were always the ones who were mocked and laughed at on the news on the few occasions that they WERE invited on to speak.

Peter Schiff is a prime example. He was predicting this in 2002:

[youtube]rhJaVEWAG24[/youtube]


As for WHY they would want to do it on purpose...the only thing I can think of is for the justification to usher in a new era of socialism. Not the kind of socialism that YOU might enjoy Rav, but the kind that DICTATORS would enjoy.

 

[Ravi]

You are correct, Pauli. The Fed has powers outside the limitation of the government. But if you want me to believe for an instant that Bush didn't welcome, hint at and support anything and everything the Fed could do to simulate the economy, I've got some swampland to sell you. Not only did I never hear him say boo, he also recklessly moved against state's rights to put laws in place to outlaw predatory lending practices.

And btw, I am not a socialist nor do I wish the country to become socialist.

 

[Paulie]

You are correct, Pauli. The Fed has powers outside the limitation of the government. But if you want me to believe for an instant that Bush didn't welcome, hint at and support anything and everything the Fed could do to simulate the economy, I've got some swampland to sell you. Not only did I never hear him say boo, he also recklessly moved against state's rights to put laws in place to outlaw predatory lending practices.

And btw, I am not a socialist nor do I wish the country to become socialist.

I don't give Bush a free pass on anything. I still think the man has done more in 8 years to ruin things than it took all the other presidents before him from the start of the Federal Reserve Act COMBINED.

But make no mistake. Clinton oversaw a pretty steep artificial decline in the fed rate as well in the early 90's, which helped usher in a pretty bad business cycle.

These problems know no specific political allegiance. They happen under both parties, because both parties have enabled it for decades. All the other pet issues can come and go, and change through time, but the Federal Reserve's monetary policy always remains the same, going mostly unnoticed and unmentioned. Until now, that is.

Finally, Americans are starting to slowly wake up to the bullshit. I just hope there's still enough time for us to do something about it.

 

[dilloduck]

You are correct, Pauli. The Fed has powers outside the limitation of the government. But if you want me to believe for an instant that Bush didn't welcome, hint at and support anything and everything the Fed could do to simulate the economy, I've got some swampland to sell you. Not only did I never hear him say boo, he also recklessly moved against state's rights to put laws in place to outlaw predatory lending practices.

And btw, I am not a socialist nor do I wish the country to become socialist.

Damn--you're in mourning arent' you. You're going to miss your old scapegoat come January aren't ya ? How are you managing to stifle all the truth on this bust yet still try to somehow shove it up Bush's ass ?

 

[Ravi]

dillo, you keep excusing Bush and his role in the fiasco and yet you don't come up with an alternative theory.

Pauli, I agree, it's an ongoing problem. The current crisis is what I believe we were discussing and while past presidents may have acted in a manner that wouldn't differ much from Bush's on the federal reserve (including Clinton) I don't think any of them would have at the same time cut capital gains to the extent Bush did AND engage in a war that we didn't need to enter AND make it so state's couldn't put limits on predatory lenders within their borders.

All the while telling us to spend, spend, spend.

 

[editec]

Kids!

Cheap money helped CORPORATIONS AND THE STOCK MARKET far more than it helped homeowners.

Buying on margin, ya' know?

 

[dilloduck]

dillo, you keep excusing Bush and his role in the fiasco and yet you don't come up with an alternative theory.

Pauli, I agree, it's an ongoing problem. The current crisis is what I believe we were discussing and while past presidents may have acted in a manner that wouldn't differ much from Bush's on the federal reserve (including Clinton) I don't think any of them would have at the same time cut capital gains to the extent Bush did AND engage in a war that we didn't need to enter AND make it so state's couldn't put limits on predatory lenders within their borders.

All the while telling us to spend, spend, spend.

Spend Spend Spend is different than borrow borrow borrow.
You understand that, right ?
I haven't excused a soul from the financial mess we are in.

 

[dilloduck]

Kids!

Cheap money helped CORPORATIONS AND THE STOCK MARKET far more than it helped homeowners.

Buying on margin, ya' know?

So that's why the Fed maintained this policy ? They decided to help corporations and the stock market ?