Excellent article on the cause of the crisis ...

[Paulie]

I dunno, Ron Paul is possibly overreacting. Congress doesn't seem about to roll over and give into Bush for a change.

We shall see.

I don't know Rav, I haven't yet seen a time throughout his past 30 years of speaking about these problems, where his financial concerns have been proven to be an overreaction.

In fact, over 30 years of speaking about it where it COULD have been considered an overreaction during that time, seems to be coming to fruition now.

You can't say the guy didn't know what he was talking about. He's being proven right with each passing day.

 

[editec]

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..

According to Bernake, what would happen is the worst economic event in american history.

In other words something worse than the 1929 depression.

 

[dilloduck]

According to Bernake, what would happen is the worst economic event in american history.

In other words something worse than the 1929 depression.

ANd we trust this guy now ?

 

[Ravi]

According to Bernake, what would happen is the worst economic event in american history.

In other words something worse than the 1929 depression.

They do keep saying that. But strangely enough, none of my loans are being called in and I've noticed that banks are still offering loans.

It's getting rather suspicious.

It'd be nice for them to explain how this bailout would even work and if it would be the last one.

 

[Toro]

At the moment, inflation is a canard. That very well may be the long-term problem, but home prices collapsing, a recession and credit markets seizing are evidence of deflation, not inflation.

 

[gonegolfin]

At the moment, inflation is a canard. That very well may be the long-term problem, but home prices collapsing, a recession and credit markets seizing are evidence of deflation, not inflation.

To add to that, the Fed has not been creating inflation yet either. And if their plan of funding the entire plan via treasury debt succeeds (a big if), no new money will have been created.

http://www.usmessageboard.com/econo...le-on-the-cause-of-the-crisis.html#post799324

Brian

 

[sealybobo]

They do keep saying that. But strangely enough, none of my loans are being called in and I've noticed that banks are still offering loans.

It's getting rather suspicious.

It'd be nice for them to explain how this bailout would even work and if it would be the last one.

Remember we had to invade iraq because we didn't want the smoking gun to be a mushroom cloud? Both condi and powell said that. Funny Bush had his two black advisors sell that lie. I bet that got them in the good old boys club.

I can't believe bush is still making any decisions.

The dems should only give $100 billion now and let the new administration decide if we give the other $600 billion.

And we all know Mccain the reformed maverick will give them what they want.

 

[Ravi]

Remember we had to invade iraq because we didn't want the smoking gun to be a mushroom cloud? Both condi and powell said that. Funny Bush had his two black advisors sell that lie. I bet that got them in the good old boys club.

I can't believe bush is still making any decisions.

The dems should only give $100 billion now and let the new administration decide if we give the other $600 billion.

And we all know Mccain the reformed maverick will give them what they want.

I wonder if Bush's speech will make things worse. I was just reading that Chinese banks have been ordered (by China) to stop making interbank loans to US banks. That doesn't sound encouraging.

 

[editec]

I think the number is going to be considerably higher.

Brian

So do I.

UNLESS we're smart enough NOT to take JUST the banks' bad paper.

Take the bad paper, yes, but then take the whole bank, too.

The net worth of these banks is ZERO unless we bail them out, after all.

The Government should not be bailing them out, the US government should become the OWER of those banks entirely.

This is how I think I'd see it all work out...

Stockholders? Sorry, you lost everything.

Maybe next time you'll make god damned sure your boards of directors don't allow your employees to bankrupt you, and then skate away with billion dollar golden parachutes your boards of directors gave them, is my advice.

Boards of directors -- Investigations will be forthcoming to see if you did your duty to your fellow stockholders. You will probably ALSO be sued into insolvency for failing to do your duty to oversee management.

CEOS? - Expect civil suit from your stockholders demanding that you personally compensate your stockholders for you sheer incompetence. Expect to be personally bankrupted.

Rating Companies? - Expect massive class action lawsuits coming you way from the Bond holders who you screwed with your incompetent ratings on the securities you were rating. Expect to be personally and corporately bankrupted.

It is TIME to hold these people PERSONALLY ACCOUNTABLE for their failures, folks.

Any of these masters of the universe who so screwed up shouldn't have a pot to piss in or a window to throw it out of when the dust settles here, folks.

It's time to hold the master class to the same high standards of on job proformance that everyone else is held to on their jobs.

If any of these bastards come out of this, and are still well off, then the USA is populated by nothing but cowards and peasants.

If the bastards who caused this get away with it unscathed then the american people are fucking idiots and our government is corrupt beyond redemption.

 

[Toro]

To add to that, the Fed has not been creating inflation yet either. And if their plan of funding the entire plan via treasury debt succeeds (a big if), no new money will have been created.

http://www.usmessageboard.com/econo...le-on-the-cause-of-the-crisis.html#post799324

Brian

If you have access, read the most recent publication by Grant's Interest Rate Observer. It has an excellent article drawing a parallel of this period to the 1960s.

I don't think we'll have inflation any time soon, but five years down the road, it could be a big problem again.

And I think they'll cut the Fed funds target again, though I'm not sure it matters. Fed funds have been trading as low as 0.125% this week.

 

[gonegolfin]

I wonder if Bush's speech will make things worse. I was just reading that Chinese banks have been ordered (by China) to stop making interbank loans to US banks. That doesn't sound encouraging.

China is now vehemently denying this (what else would they do?). We shall see. As I said, much of the story to be told will be centered around how foreign investors embrace this and how the credit markets respond (especially intermediate and long term debt). Of course it is a given that the short term money markets must function properly.

Brian

 

[gonegolfin]

If you have access, read the most recent publication by Grant's Interest Rate Observer. It has an excellent article drawing a parallel of this period to the 1960s.

I don't think we'll have inflation any time soon, but five years down the road, it could be a big problem again.

And I think they'll cut the Fed funds target again, though I'm not sure it matters. Fed funds have been trading as low as 0.125% this week.

The Fed has conducted a couple of reverse repos (totaling $22 billion) this morning to mop up the excess liquidity and bring the funds rate back up towards its target. Temporary Open Market Operations - Federal Reserve Bank of New York

As I tried to explain here ... http://www.usmessageboard.com/econo...le-on-the-cause-of-the-crisis.html#post799324
... whether or not we see inflation may solely rest on whether or not the foreign central banks and investors ante up for more debt. Since the proposed funding mechanism is all treasury debt, investors will need to swallow it all. If foreigners begin to dishoard their Dollars, we will see massive inflation without a single new Dollar being created by the Fed. Alternatively, we may see a combination of treasury debt sales and money creation by the Fed. There are plenty of combinations for both inflationary and deflationary scenarios.

It would be much more clear if the Fed simply came out and said that we are going to replenish our balance sheet and buy treasuries. This would result in newly created money to fund the bailout, instead of using treasury debt sales. Then we would know that we are headed down the path of inflation.

Brian

 

[indago]

Around 1990, I wrote an article for The Constitutionalist. Following is an excerpt:
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In forming the Constitution of the United States, the framers of that instrument had taken the United States money supply out of the hands of private bankers, and other interested individuals. The Congress of the United States was granted the power to coin the money of the United States, and to regulate its value against foreign coin, and to fix the weights and measures. The Congress, then, is responsible for the money supply of the United States. This responsibility cannot be abrogated by the Congress. As the population of the United States grows, the transactional medium must increase to meet the growing demands of commerce and industry. If the money supply is reduced while there is a demand for commercial activity, there will be devastation. History shows this to be the fact. The Congress knows this. History has warned, and many times, of the devastations of a lack of an exchange medium. History has warned, and many times, of the devastations of allowing the exchange medium to be put into private hands.

Congressman Charles A. Lindbergh, Sr. warned of the control of the money supply by private individuals in his work in the Congress on the Money Trust in 1913. These warnings went unheeded by the Americans. The Americans now, instead of demanding from the Congress that the money supply be distributed apportionately, as required for transactional medium, across the country, content themselves to watch, on television, the President of the United States begging the Federal Reserve Corporation to reduce interests rates so that money can be borrowed into the marketplace to spur economies in the various States. An economy cannot borrow itself into prosperity; a fact which some Americans are now beginning to realize as the bill comes due. The Congress of the United States, granted the power to promote the general welfare of all of the States in the United States by the Constitution of the United States, remains inert as industries collapse, businesses move to foreign countries, and people become homeless, living on the streets in the wintertime. It is not a question of giving money to homeless people, or the unemployed; nor is this the answer. Those Congressmen who have defied their oath to uphold the Constitution of the United States should become a part of the homeless population, and be replaced by responsible Congressmen. Many Americans look to the President of the United States for policies for economic growth. The President was not granted these powers. The President is responsible for implementing the policies that the Congress enacts, according to the Constitution. President Hoover was blamed, by many Americans, for the devastations which occurred as a result of the policies of the Congress during the 1930's. If the Americans would have seen to it that these Congressmen became part of the homeless population, a different course of history could have been presented in our textbooks. The people can make it happen; if they will.

The Congress, which was chartered the responsibility for the nation's money supply under the Constitution of the United States, had reduced the money supply from the year 1929 to 1933 by 25.3%, and the lack of the exchange medium for transactional purposes had caused the depression of the 1930's.
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It is the circulating capital which furnishes the materials and wages of labour, and puts industry into motion. — Adam Smith - Wealth of Nations

It is the responsibility of the Congress to harness the nations money supply toward the general welfare of the nation.

FEAR MONGER