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Originally posted by Q5echo what if, despite all the moral hazards the world had violated in response to this crisis, we can put in place smart and effective stop-gaps and oversight to at least ensure this happens only once in 100 years?

The US is broke. How will getting more broke help?

To finish this post I will quote from the book of Financial times:

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Sept. 22 Therefore, consumers must live within their incomes or – to the extent that they need to restore their own balance sheets – somewhat below that. Ken Lewis, Bank of America’s chief executive, was asked last week how many of the nation’s 8,500 banks he thought would survive the credit crunch. “About half,” he replied. The failure of more than 4,000 banks would surely amount to Depression 2.0 (though, for the record, the total number of national and sate banks to disappear between 1928 and 1933 was over 11,000). Cheap money and deficit finance were the techniques recommended by Keynes and other sin the 1930s as solutions to the problem of the Depression. They were used and abused in the 1960s and 1970s when there was no depression, with ultimately disastrous inflationary results. But can these techniques work now? So far, what they have achieved is what might be called a Great Repression. They have in effect repressed, but not cured , a depression. Sept. 26 Tim Bond, head of global asset allocation at Barclays Capital, said: “Conditions more or less resemble a bank run on the system.”

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Originally posted by pkcRAISTLIN yeah, but both you and him are much heavier on the ideology than you are on the experience. there are governments all over the world following suite to a greater or lesser degree. is everyone wrong? there seems to be a tendency in the conspiracy theorist circles to believe that inflation is the devil and must be avoided at all costs. which isn't true.

Because nothing bad has ever happened when inflation sets in.

Most of these people who are making the calls, governments all over the world, are heavier on ideology then experience. Unless you consider passing a 450 page bill that you didn't read experience.

You can tell by the demands on public representatives and the heads of multinational corporations that they don't read even half of what they should be reading, and likely do less then a third of the calculations they should be.

Do you think G.W. Bush ever reads a book? I bet he hasn't read more then five in the past 20 years.

A picutre of a politician reading might actually be a detriment to thier chances of getting elected, especially in the US. It implies that they aren't 'doing' anything.

It will probably work to some degree, especially given the decision to make a direct capital investment in several large banks (although that creates some separate issues...)

It certainly isn't going to restore the status quo ante, and it seems highly unlikely that it can prevent a significant recession. But it may well succeed in preventing the sort of catastrophic global depression that some have predicted.

I think nothing short of getting back all the money we've borrowed to use on the worthless war we are waging will help.

___________________
I've never been able to eat a whole baby.
Kill the women. Eat the children.
It's just one of those days where you want to bend over everyone you know and kiss their ass goodbye with a big sideways boot.

Latest Mix

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Originally posted by atbell If how veterans are treated is any indication....

The veterans here in Canada are actually very well taken care of - I know one personally and the government (the current one at least) takes care of everything for him (which is awesome and the way it should be!).

___________________
"...End? No, the journey doesn't end here. Death is just another path...one that we all must take.
The grey rain-curtain of this world rolls back, and all change to silver glass...and then you see it...
...white shores...and beyond...the far green country under a swift sunrise."

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Originally posted by Q5echo if you take the blue pill i'm telling your wife

Awe comeon...Carrie-Anne Moss!!

You can't tell me you didn't drool at, "Dodge this!"

___________________
"...End? No, the journey doesn't end here. Death is just another path...one that we all must take.
The grey rain-curtain of this world rolls back, and all change to silver glass...and then you see it...
...white shores...and beyond...the far green country under a swift sunrise."

quote:

Originally posted by pkcRAISTLIN yeah, but both you and him are much heavier on the ideology than you are on the experience. there are governments all over the world following suite to a greater or lesser degree. is everyone wrong? there seems to be a tendency in the conspiracy theorist circles to believe that inflation is the devil and must be avoided at all costs. which isn't true.

To be fair, I wouldn't say that everyone is "wrong", but rather, that no one really has any idea what's "right".

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Originally posted by atbell Because nothing bad has ever happened when inflation sets in.

give me an example of inflation causing serious damage to western liberal democracies on the scale we're seeing now. In other words, show me that the risks of future inflation outweigh the problems caused by imminent financial collapse.

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Originally posted by DJ Shibby To be fair, I wouldn't say that everyone is "wrong", but rather, that no one really has any idea what's "right".

Yes, completely agree. Which is why I find capitalizt's and Funkesthesiac69's dogmatic, inflexible, and naïve libertarianism objectionable. They don’t really know if this is going to cause problems, but they'll oppose it anyway because they care more about political theory than they do by all the people that are going to the wall.

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Originally posted by occrider Simply put, everyone who voted against the troubled asset relief program is either: A) Ignorant of economics or B) A partisan hack willing to put politics above country

Pick a category capitalizt!

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Limited inflation is much better than deflation. Deflation results in diminished economic demand.

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pk, this country had a slight inflation problem once..

http://en.wikipedia.org/wiki/Weimar_Republic

As you may recall, the people's desperation...their clamoring for a solution and willingness to accept anything and any leader as long as they had an idea how to fix the problem .was instrumental in the Nazi party coming to power.

People do desperate and stupid things when they are hit with economic problems.. And we have done it again by giving the federal government unprecedented control and power over the markets...far more than FDR could have ever dreamed..

Once the government has power over something, it never lets go. I won't lie...It is part ideology. And my ideology tells me that this bailout is a huge step towards socialism and fascism and is a complete disaster for our country in the long run. The recession would have been very painful but relatively quick had the bailout not passed...but we have simply delayed it. We are preventing the market from correcting...preventing the natural decline in asset values, stocks, home prices, etc. We are preventing bad people and bad companies from being washed away. These are necessary (and healthy) things that happen during recessions. Instead, we are reinflating the artificial economy YET AGAIN. We are devaluing the currency and going deep into debt to reinflate the bubble, rather than let people feel a little pain as a consequence of their malinvestments.. I can't find words strong enough to describe what a huge mess we are going to face eventually because of this intervention. It's going to be horrible when the real crash happens.

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Originally posted by Capitalizt pk, this country had a slight inflation problem once.. http://en.wikipedia.org/wiki/Weimar_Republic As you may recall, the people's desperation...their clamoring for a solution and willingness to accept anything and any leader as long as they had an idea how to fix the problem .was instrumental in the Nazi party coming to power. People do desperate and stupid things when they are hit with economic problems.. And we have done it again by giving the federal government unprecedented control and power over the markets...far more than FDR could have ever dreamed.. Once the government has power over something, it never lets go. I won't lie...It is part ideology. And my ideology tells me that this bailout is a huge step towards socialism and fascism and is a complete disaster for our country in the long run. The recession would have been very painful but relatively quick had the bailout not passed...but we have simply delayed it. We are preventing the market from correcting...preventing the natural decline in asset values, stocks, home prices, etc. We are preventing bad people and bad companies from being washed away. These are necessary (and healthy) things that happen during recessions. Instead, we are reinflating the artificial economy YET AGAIN. We are devaluing the currency and going deep into debt to reinflate the bubble, rather than let people feel a little pain as a consequence of their malinvestments.. I can't find words strong enough to describe what a huge mess we are going to face eventually because of this intervention. It's going to be horrible when the real crash happens.

And the fact that our Federal Reserve System is based partially upon the Reichsbank model should be something to note as well.