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Have at 'er

Since we're all economists now:

 

. "The party is over from fiscal support. These hard-money men are fighting the last war: they don't recognise that money velocity has slowed and we are going into deflation. The only default option left is to crank up the printing presses again."

 

http://www.telegraph.co.uk/finance/economics/7852945/Ben-Bernanke-needs-fresh-monetary-blitz-as-US-r...

13 Replies
Advisor

Re: Have at 'er

you did want your jubilee to be just for bankers, right?

Re: Have at 'er

No not really.

 

My personal perscription from the earliest was for a massive jubilee that wouold be extended to all individuals. That was of course mostly whimsical and it was acknowledged that there was 0% of the enactment of such.

 

And of course if such a thing had been enacted things would have been really bad and whoever was held responsible would have been lynched because we humans do not have the gift of foreknowledge and could not have known that things would get much, much worse without.

 

At this point I'm fairly sanguine about it all. If we want to do the tough love thing with the expectation that the invisible hand of the free market will then magically reorder society then OK, the end point is probably the same.

 

My concern is actually more about who takes power- ir Sarah, Michelle, Glenn et al are in power and crash the system I see that as the riskiest setup for mass sociopathy. h

Senior Contributor

Re: Have at 'er

Keep printing that money, full speed ahead. No stopping it now, and if the truth were known, the handwriting was on the wall years ago. The world is beginning to run out of cash to stimulate this thing in spite of all the world's money presses running full tilt. As was said a year ago, we have begun the race to the bottom. No stopping it now, just may take a major world war to straighten this whole thing out, with new governments emerging with new constitutions and new money. The bunch in charge is just trying to buy time with printing wholesale cash like crazy, and it has worked for a little while now, but when???---.

Re: Have at 'er

Honored Advisor

Re: Have at 'er

The system we have does have an experation date on it. All the dollars have been borrowed into existence, with interest tacked on it becomes impossible to service. Simply, you need to borrow money just to pay interest on your debt. Pay Visa with Mastercard and American Express with Discover, if you will. My problem with jubilees would be they reward the most irresponsible of society. Those deepest in debt with the most toys come out smellin` like a flower shop. Just like in the 80`s when bankers and the gov`t picked the winners and losers among farmers with taxpayer funded debt writeoffs. It most cases the wrong ones were soldout and the wrong ones were given a $800,000 check.

Advisor

Re: Have at 'er

Congratualtions on being the first person who sits on the right of center here to acknowledge that.

Senior Advisor

Re: We have plenty of cash

Because of all this effort to keep interest rates low our money has been detour into the market and other risky ventures trying our damnest to find a return on our investment.

 

This has had the effect of less deposits in cd's, bonds and other savings instruments. Does anyone think that 1.5 % encourages saving.  Possibly, this very strategy has inflated prices and that 1.5 % won't buy as much as it did last year. What incentives are there for savers to invest in US securities. None that I can see.  Why does China do it? because they need to prime the pump to keep the us consumers buying their crap.

Advisor

Re: Have at 'er

My goodness that short blog is incredibly perceptive in terms of what the "conditions on the ground" actually are.

 

A couple of thoughts...kudos to those two members of Congress who pushed for  cramdown, way back before this was officially recognized as a "crisis", and in light of that it's interesting to note that all we've gotten out of Congress in the last 10 years that would pertain to this situation is a bankruptcy reform bill some years back (in the first W administratio, I believe) that was obviously a sign that the banksters knew this was coming.

 

I agree with your comment below. Nobody who could do anything about it wants to tackle any of this and we will simply have to wait until it spontaneously blows.

 

Volumes upon volumes in the couple of times he uses the term "perverse incientives"..shows that he really understands how the whole shipped out and bunddled securitization scheme played out.

 

I'd recommend reading this one over and over again until it really sinks in.

 

 

Re: We have plenty of cash

Absolutely right, don.

 

For all the yelling about free markets, the absolutely, positively always most important price for the market to set is the rate of interest. When you mess with it you mess with every market signal for economic activity.

 

The Bush folks were, of course, the ones who drove rates to zero. Of course there is lots of blame for the other side of the aisle and for hordes of people as far back as you want to go.

 

It is just that the current crop of conservatives are so ideological that they are immune to reason. For the most committed of the 60s culture warriors it is about the other side being wrong, all the way to the bitter end.

 

best, h