Excellent article on the cause of the crisis ...

Discussion in 'Economy' started by gonegolfin, Sep 23, 2008.

  1. gonegolfin
    Offline

    gonegolfin Member

    Joined:
    Jul 8, 2005
    Messages:
    412
    Thanks Received:
    36
    Trophy Points:
    16
    Location:
    Austin, TX
    Ratings:
    +36
    I provided the link to this article in another thread. But I thought it would be better to bring it into its own topic.

    Ron Paul gets it. Recession is a natural part of the business cycle. Especially so in the unfortunate Central Bank/Fractional Reserve System that we have. Prices must be allowed to correct and find their natural equilibrium, not find an artificial floor established by irresponsible monetary policy that inevitably results in another bubble. The excesses and mis-allocation of capital (malinvestment) must be purged in a truly free market system. This is paramount in bringing the economy back into balance. Creating more money and taking on more debt does just the opposite and benefits a minority. Namely, it benefits the folks that spend the the newly created money first, before prices react to the upside as the new money works its way through the economy (keeping aside the obvious benefit of an outright handout in the case of the proposed Treasury bailout). If we pass any sort of bailout, we are going to make the problem worse (somewhat better in the short term, much worse in the long term). Government intervention into our markets will create more instability in the future.

    Commentary: Bailouts will lead to rough economic ride - CNN.com

    Brian
     
  2. Bern80
    Offline

    Bern80 Gold Member

    Joined:
    Jan 9, 2004
    Messages:
    8,094
    Thanks Received:
    720
    Trophy Points:
    138
    Ratings:
    +726
    Even now I still wish he would have been the Republican candidate. Almost to the point that I may not vote for anybody this time around. Neither candidate is going to make these tough decisions. Unfortunately that is Ron Paul's problem, more than any other candidate he said what is right and not what people want to hear. No one who wants to get elected can afford to do that. No politician for example can afford to look a home buyer in the eye and say 'what the hell do you think you're doing?'

    That leads me back to my question earlier. What would happen if the government did nothing right now? What if they just stayed out of it. All kinds of people on here are arguing the opposite of Paul, that de-regulation is what caused this. I don't know maybe it's time for some tough love though. You can't deny there is truth in what he says. A bailout is going to keep the market from correcting and it needs to be correcting for the inflated price of things like homes. We are complaing and pissing and moaning about how tough things are on people right now, but the policies being enacted may ultimately have the exact opposite desired effect.
     
  3. Paulie
    Offline

    Paulie Platinum Member

    Joined:
    May 19, 2007
    Messages:
    31,577
    Thanks Received:
    4,856
    Trophy Points:
    1,130
    Ratings:
    +15,424
    If the government did nothing it would hurt. It's going to hurt regardless, so why not let it hurt now, with less pain then the long-run alternative of printing hundreds of billions of dollars in an unprecedented operation rife with moral hazard.

    This will happen again someday because no one was held accountable for their decisions.

    All this new money is going to make its way into yet another asset bubble...of WHAT would be anyone's guess. Maybe this time around will be a REAL oil bubble, with prices much higher than the paltry $140 we saw earlier this summer. That was NOTHING compared to what we could conceivably see.

    I somewhat tend to doubt that precious metals could become a bubble, because with as much new money as we're probably going to be seeing in the coming years, gold and silver are rock solid investments. Buy and HOLD, don't buy and sell.

    As far as Paul, I don't think most voters really want the truth. They don't want answers. They want a politician who will beat around the bush, and tell them what they WANT to hear. They also obviously want the media to whore them out to them 24/7. That seems to really turn people on for some reason.
     
  4. Zoomie1980
    Offline

    Zoomie1980 Senior Member

    Joined:
    Jan 16, 2008
    Messages:
    1,658
    Thanks Received:
    128
    Trophy Points:
    48
    Ratings:
    +128
    Paul's ideas on fiscal and domestic policy are things I believe in, but I will never buy his isolationism.
     
  5. Zoomie1980
    Offline

    Zoomie1980 Senior Member

    Joined:
    Jan 16, 2008
    Messages:
    1,658
    Thanks Received:
    128
    Trophy Points:
    48
    Ratings:
    +128
    The problem with Paul is that I WANT to fight Taliban, Russians, Chinese, Indians, etc..and he doesn't.
     
  6. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,618
    The solution is to take over ALL the assets of the banks in trouble or none of them.

    either let the economy go into free fall or fix it honestly in a way that actually doesn't screw the american commweal..

    Looks like none of us are going to get what we want.

    All we're going to get is a lot of bad paper for our $700,000,000,000.

    Meanwhile the guys who created this mess and took enormous pays for screwing it all up?

    They retire on their ill-got gains for a while, but they'll be back.
     
    Last edited: Sep 24, 2008
  7. gonegolfin
    Offline

    gonegolfin Member

    Joined:
    Jul 8, 2005
    Messages:
    412
    Thanks Received:
    36
    Trophy Points:
    16
    Location:
    Austin, TX
    Ratings:
    +36
    I think the number is going to be considerably higher.

    Brian
     
  8. gonegolfin
    Offline

    gonegolfin Member

    Joined:
    Jul 8, 2005
    Messages:
    412
    Thanks Received:
    36
    Trophy Points:
    16
    Location:
    Austin, TX
    Ratings:
    +36
    An update Ron Paul sent to his mailing list ...


    Wednesday, September 24, 2008

    Dear Friends,

    Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.

    The events of the past week are no exception.

    The bailout package that is about to be rammed down Congress' throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! "This is welfare for the rich," he said. "This is socialism for the rich. It's bailing out the financiers, the banks, the Wall Streeters."

    That describes the current bailout package to a T. And we're being told it's unavoidable.

    The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

    • The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

    • Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.

    • Then there's this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

    There goes your country.

    Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don't make me laugh.

    Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. Now, with a backlash brewing, they're not quite sure what their views are. A sad display, really.

    Although the present bailout package is almost certainly not the end of the political atrocities we'll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

    The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

    When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

    Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

    In liberty,
    Ron Paul

     
  9. dilloduck
    Offline

    dilloduck Diamond Member

    Joined:
    May 8, 2004
    Messages:
    53,240
    Thanks Received:
    5,552
    Trophy Points:
    1,850
    Location:
    Austin, TX
    Ratings:
    +6,403
    And people are shocked when I tell them that I wont vote for either party this year. :eusa_whistle:
     
  10. busara
    Offline

    busara wanasiasa wapumbava

    Joined:
    May 7, 2008
    Messages:
    1,501
    Thanks Received:
    87
    Trophy Points:
    48
    Location:
    PA
    Ratings:
    +87
    youre not voting dem or repub?!?!? :disbelief: :wtf: :omg: :shock:
     

Share This Page