HG[/quote]
In response, 2 live crew make this point… (Safe for work for once)
[quote=“MikeN”]
Uh, ever hear of the South Sea Bubble? And the pound wasn’t backed by gold then, it was gold (well, guineas anyway.)
I don’t know where gold bugs get these bizarre ideas that there were no massive speculations and crashes during the era of gold-backed currency.[/quote]
Hehe. Ain’t nuthin’ but the great tulip crash again.
What happens to knowledge and opinion when we all have the same media?
The first thing that needs to be done is to Nationalise the Federal Reserve.
They won’t do that, they have interests to protect.
The bankers are pissing on peoples shoes and telling them it’s raining.
Prepare for hyper inflation and the purchasing power of a generation being destroyed.
[quote]
This whole crisis has been planned for ages.
It’s all designed to consolidate power.
The video says change is on the way.
So they are expecting Nadar to win then?
McCain and Obama will offer NO CHANGE.
The same old shit will be discussed on these boards about the false left/right paradigm, while bombs are dropped on countries that can’t defend themselves.
There may be a different rhetoric between the two ‘candidates’, but the people in power (not bush) aren’t stupid enough to allow democracy to exist.
They can’t lose - their man always wins.
America and the UK need a political revolution.[/quote]
Uh, ever hear of the South Sea Bubble? And the pound wasn’t backed by gold then, it was gold (well, guineas anyway.)
I don’t know where gold bugs get these bizarre ideas that there were no massive speculations and crashes during the era of gold-backed currency.[/quote]
Yes, they hype in shares started during the year 1711 which was 6 years before the de facto gold standard was introduced to England in 1717 [quote]where Britain’s debt would be financed in return for 6% interest[/quote]. Of course there was an amount of floating debt during that time before the introduction of the gold standard, so debt was sold much in the way that it is sold today. When better a time, you may ask, to start prospecting on the value of other people’s outstanding debt? When your profits that came from nowhere are to be redeemed in gold under the new gold standard. 
What’s more interesting about the demise of the gold standard is this:
In other words Europe bankrupted by war and the old gold standard that meant funds were too limited to continue stupid wars, so scrapped was the standard so they (the European bankers) could continue to reap profits from war. And what better way (again) to make a profit than to take U.S dollars and redeem them for more gold that they didn’t have to pay back. This was the reason given for the U.S. too to halt the gold standard once its reserves were depleted by financing the second world war. It is important to remember that under the gold standard, war was too expensive indeed (and the Germans wouldn’t have even been in it). If you look back at the breaks between the use of the gold standard, they were practically all because of wars that needed financing. Interesting 
Good time to read Liar’s Poker again and change all references to the 1980s to the 1990s and substitute “All Banks” for “Salomon Brothers”.
[quote=“MikeN”]Missed a few, haven’t we? Their mortgage broker tells them he can offer them a great deal at no money down and minimal payments, and don’t worry about the balance, because all the experts on Wall Street are telling him prices can only go up; their head of the Federal Reserve, in order to boost his Republican buddies re-election chances, tells them to switch to an ARM and calls for more innovative financing arrangements; and then a whole bunch of CEO “Masters of the Universe”, whiz-kid MBAs and high-flying lawyers take those mortgages and turn them into derivatives leveraged to the trillions.
So you see, it’s all the Garcia’s fault.[/quote]
My wife and I bought our first house less than three years ago. We took a radical approach by buying a modest house on a fixed rate mortgage that we can afford. Perhaps you, or another fine Forumosan, can explain why we should bailout idiots who bought houses at ridiculous interest rates they couldn’t possibly hope to afford. Thanks.
But the way you tell the story, Gao, it’s almost as if you’re implying that you had free will in making the decision. How did you and your wife manage to block the mind control powers of the High-flying Republican CEO Masters of the Universe Whiz-kid Skelator-Legion MBA Lawyers?
Well, I can’t be certain, but I suspect the dense brains of the locals forms a time-varying electrical field that interferes with the low-frequency radio waves emitted by the high-flying Republican CEO Masters of the Universe Whiz-kid Skelator-Legion MBA Lawyers, which the Evil Ones use to control the financial decisions of Americans. Too harsh, you say? Well hear this. Alabamans actually believe that pulled pork BBQ is better than cut brisket. Beyond dense.
And it’s the same field affecting these people:
slate.com/id/2201641/pagenum/2
I know right-wingers really, really want to blame all this on the no-account colored folk and them illegalMessicans, but sorry, it’s just not true- not that that’s ever stopped a con before this blaming everything on some convenient minority.
As the saying goes, read the whole thing- but only if you’re interested in the truth, not just a handy dark-skinned scapegoat.
This whole argument is a bit like who is to blame in the drug trade – the big distributors, the street dealers or the street users – except in this case the drug was “the American dream.”
I say they’re all to blame to one degree or another so placing all the blame on either the “street users” or the “big distributors” are judgments more motivated by ideology than by common sense. Not placing primary blame on the big distributors though who were really the most sophisticated players in the trade and gained the most from it defies common sense.
[quote=“MikeN”]I know right-wingers really, really want to blame all this on the no-account colored folk and them illegalMessicans, but sorry, it’s just not true- not that that’s ever stopped a con before this blaming everything on some convenient minority.
As the saying goes, read the whole thing- but only if you’re interested in the truth, not just a handy dark-skinned scapegoat.[/quote]
In other words, you can’t explain why I should bailout irresponsible borrowers, lenders, and insurers, so you create a strawman argument that I’m blaming dark-skinned people and illegal immigrants for the financial crisis, which of course I’m not. Classy move.
[quote=“Gao Bohan”][quote=“MikeN”]I know right-wingers really, really want to blame all this on the no-account colored folk and them illegalMessicans, but sorry, it’s just not true- not that that’s ever stopped a con before this blaming everything on some convenient minority.
As the saying goes, read the whole thing- but only if you’re interested in the truth, not just a handy dark-skinned scapegoat.[/quote]
In other words, you can’t explain why I should bailout irresponsible borrowers, lenders, and insurers, so you create a strawman argument that I’m blaming dark-skinned people and illegal immigrants for the financial crisis, which of course I’m not. Classy move.[/quote]
The “dark-skinned” people couldn’t have gotten those nice fat “loans” without the help of the Man. They used each another, but in the end, the bankers and mortgage people walked off with their fat commissions, and the homeowners lose their homes. The taxpayers owe more money. And when the Man (be he lawyer, judge, mayor, prosecutor, politician) need some white snow, who better to goto than the “dark-skins.” Or if meth’s your fancy, Kentucky is the place to be… Meanwhile, the TV keeps saying buy this, buy that, keep up with the Jones. You’re ENTITLED to everything you WANT.
/incoherent ramble off
[quote=“Gao Bohan”][quote=“MikeN”]I know right-wingers really, really want to blame all this on the no-account colored folk and them illegalMessicans, but sorry, it’s just not true- not that that’s ever stopped a con before this blaming everything on some convenient minority.
As the saying goes, read the whole thing- but only if you’re interested in the truth, not just a handy dark-skinned scapegoat.[/quote]
In other words, you can’t explain why I should bailout irresponsible borrowers, lenders, and insurers, so you create a strawman argument that I’m blaming dark-skinned people and illegal immigrants for the financial crisis, which of course I’m not. Classy move.[/quote]
Self-preservation? History suggests and the majority of economists believe that no intervention will lead to a depression of unknown severity so unless you’re independently wealthy you will most likely be caught up in the ensuing pain.
Essentially though there is no definitive answer to your question because the debate over whether to intervene or not intervene after another one of our cyclical easy money binges was never really satisfactorily resolved the last time it was seriously tested – the Great Depression – as the economic shock therapy of the onset of WWII made it a moot point. Typical government interventions during periodic economic recessions haven’t clearly answered this great question, though the results seem to suggest intervention is the remedy. Hence the majority of economists supporting massive coordinated government intervention now when we’re teetering on the edge of economic depression.
Are recessions and incipient depressions the same animal though requiring the same remedies or does the remedy for one actually exacerbate the other? That remains to be seen.
Please provide evidence that the majority of economists believe that no intervention will lead to a depression of unknown severity. Here is a letter written to Congress, signed by 200 economists, opposing the bailout.
Really? That’s funny, I thought you were a Ron Paul fan. From Ron Paul:
[quote]Many Americans today are asking themselves how the economy got to be in such a bad spot.
For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.
Unfortunately, the government’s preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention.
Ever since the 1930s, the federal government has involved itself deeply in housing policy and developed numerous programs to encourage homebuilding and homeownership.
Government-sponsored enterprises Fannie Mae and Freddie Mac were able to obtain a monopoly position in the mortgage market, especially the mortgage-backed securities market, because of the advantages bestowed upon them by the federal government.
Laws passed by Congress such as the Community Reinvestment Act required banks to make loans to previously underserved segments of their communities, thus forcing banks to lend to people who normally would be rejected as bad credit risks.
These governmental measures, combined with the Federal Reserve’s loose monetary policy, led to an unsustainable housing boom. The key measure by which the Fed caused this boom was through the manipulation of interest rates, and the open market operations that accompany this lowering.
When interest rates are lowered to below what the market rate would normally be, as the Federal Reserve has done numerous times throughout this decade, it becomes much cheaper to borrow money. Longer-term and more capital-intensive projects, projects that would be unprofitable at a high interest rate, suddenly become profitable.
Because the boom comes about from an increase in the supply of money and not from demand from consumers, the result is malinvestment, a misallocation of resources into sectors in which there is insufficient demand.
In this case, this manifested itself in overbuilding in real estate. When builders realize they have overbuilt and have too many houses to sell, too many apartments to rent, or too much commercial real estate to lease, they seek to recoup as much of their money as possible, even if it means lowering prices drastically.
This lowering of prices brings the economy back into balance, equalizing supply and demand. This economic adjustment means, however that there are some winners – in this case, those who can again find affordable housing without the need for creative mortgage products, and some losers – builders and other sectors connected to real estate that suffer setbacks.
The government doesn’t like this, however, and undertakes measures to keep prices artificially inflated. This was why the Great Depression was as long and drawn out in this country as it was.
I am afraid that policymakers today have not learned the lesson that prices must adjust to economic reality. The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay.
Additionally, the government’s actions encourage moral hazard of the worst sort. Now that the precedent has been set, the likelihood of financial institutions to engage in riskier investment schemes is increased, because they now know that an investment position so overextended as to threaten the stability of the financial system will result in a government bailout and purchase of worthless, illiquid assets.
Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term.
The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.
It is time this process is put to an end. But the government cannot just sit back idly and let the bust occur. It must actively roll back stifling laws and regulations that allowed the boom to form in the first place.
The government must divorce itself of the albatross of Fannie and Freddie, balance and drastically decrease the size of the federal budget, and reduce onerous regulations on banks and credit unions that lead to structural rigidity in the financial sector.
Until the big-government apologists realize the error of their ways, and until vocal free-market advocates act in a manner which buttresses their rhetoric, I am afraid we are headed for a rough ride.[/quote]
Gao, do you understand exactly what the bail out is targeting here? How much pain are you willing to wear to let these markets “rectify themselves”?
Personally, the upside I see from this fall out is an end to the far too widely held blind faith in markets rectifying themselves. Frankly, I view advocates of this theory, like your man Ron Paul there, as mindless extremists. I think the strongest argument out there now is that what was needed was strong intervention much earlier.
HG
Ron Paul isn’t my candidate, he’s spook’s. But I think Ron Paul makes strong points in his article. Perhaps instead of calling him a mindless extremist you’d like to refute his points with, I don’t know, logical arguments?
Wait wait, let me guess, you can’t be arsed.
Oh and HGC, since you’re so concerned about the results of the US government not acting, could you send some money our way? It’s just that, you see, this bailout you’re advocating (and which has already become law) is going to be quite costly to the American taxpayers. We already have a budget deficit of 500,000,000,000USD a year, and our national debt is 10,000,000,000,000,000USD, and the bailout costs 700,000,000,000USD, which doesn’t count the 300,000,000,000USD the government already poured into the market a few weeks earlier.
So, I’m sure you’ll be willing to put your money where your mouth is and donate to the US government to help alleviate the crisis, right?
From your cited letter: “We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function.”
I’m a fan of the truth, not the typical mindless true believer that typifies the U.S. electorate. In this instance Ron Paul is an ignorant – even dangerous – fool.
You’re right, I can’t be arsed, and the reason for that is because it would require an extensive essay which I simply don’t have the time for. The short answer though, is that his criticism is fine but his conclusion is flawed. Essentially it’s all logical up until he decides the answer is take the blind leap of faith that markets will correct themselves. There’s really no point arguing with believers in faith-based theories.
And for what it’s worth, I think the US bail out plan is flawed, but the UK model has distinct merit. No point throwing money unless it’s clearly targeted.
HG