Posted on 10/12/2008 8:21:56 AM PDT by gpk9
We don’t have a credit crisis. We don’t have a liquidity crisis.
In the last few weeks the Fed and U.S. Treasury have made more credit and liquidity available than ever before in history.
They've had no impact. Markets ignore them and keep dropping.
Here is a quote from the Financial Times story "The week that panic stalked the markets" , October 10, Michael Mackenzie and John Authers:
"The crash in equity markets this week came as investors fled risky assets in panic. Coordinated rate cuts by leading central banks, and many other measures of support hastily adopted by governments, went ignored." [emphasis mine]
(By the way, these two chaps believe credit markets are frozen. Same nonsense we hear in MSM.)
Adding more credit and more liquidity won't help. Markets will ignore that too.
We have a confidence crisis.
Just plain ole fear. Afraid to take risk. Pulling back. Hedging. Holding. Safeguarding …whatever is left.
Its the same thing that caused all previous financial crises …except one… the crash of '29. It was in fact caused by a credit squeeze …but none since …and not this one.
No amount of injected credit or liquidity will solve a confidence crisis. You don't have to believe me. Open your eyes and look around.
The financial crisis in America can be solved in 24 hours.
It has specific pinpoint causes that can be resolved with the stroke of a pen, putting a signature on a one-page order.
A one-page order that would instantly restore confidence.
Not saying everything would return to normal that quickly, but we would be on the way back to normal that quickly. Markets would turn around. Overnight.
It wouldn't cost a single taxpayer dollar. None. Zero.
It wouldn't be anything new. No new law. Perfectly consistent with long-existing law.
It would resolve the crisis where the crisis started.
Those in authority know what that one-page order would be.
Will they do it? Do they really want to do it? Do they really want to solve this crisis?
Do they have the political guts to solve this crisis? Oh yes, it's political. Purely political. There is no fundamental systemic economic problem.
Or do they have some other agenda? Does this crisis serve some other purpose?
The markets lack confidence because they, properly, believe that the U.S. is about to elect and “turn-key” socialist
-Much of the world is essentially socialist. Projecting our fears and desires upon that world, in an attempt to explain our current economic difficulty, is mistaken. That world appears to actually prefer Obama. For that, they're fools, of course, but the fact remains.-
The poster is NOT projecting "our fears and desires" upon the world. He is saying that the fear is within those who look to long term investment, long term trust, long term enterprise, who otherwise do motivate the world's progress. THAT is not the "world."
Indeed most of the world does "prefer" Obama simply because most of the "world" emotionally, but subliminally, really does not care what happens to the explicit prosperity of the United States. No matter what "they" say, "they," our closest allies, an average citizen in France or Thailand, a politician in Denmark, etc. really do not care, any more than you or I care whether George Soros, or Sumner Redstone, or Warren Buffet, lose their mansions, or go bankrupt. At a distance "they" simply do not care a fig whether the United States remains aloof, OR MORE PROSPEROUS.
Henry Ford was very explicit about this.
It IS the whole point. The United States, beginning tomorrow, could become fortress America. Energy independent. politically independent, materially independent. But that is not what GWB, our corrupted Congress, our stupid economists, want.
And that is NOT isolationism, but rather independence, exactly the same as each and every one of us want to be.
Nationalism? You bet. But not the socialist kind.
There have been countless vanities and replies on Free Republic, postulating a purely political cause for the current situation. Is it fear of Obama today, or is it Obama supporters intentionally wreaking havoc? I’ve read impassioned arguments for both. Either one strikes me as myopic. The problem is much too huge, and has been building for far too long, for this to be the case, pro or con, in my small, distinctly unimportant opinion.
Could it be, that many see that trillions have evaporated, due to too-smart-by-half “innovations,” and they’re salvaging what they can?
No offense, but, you don’t know what you are talking about
Inept, Corrupt, Emasculated Congress void of Education, Morals, and Accountability
How the democrat gets relected for 20+ years.
You could have a point, actually a better point than the original poster probably had in mind. Or, the thread poster could be a huge buggerin’ wanker (same as a liberal) with issues, but no answers.
I don’t agree with him on other matters, but I think Ron Paul just might have the right idea here:
Political_positions_of_Ron_Paul
http://en.wikipedia.org/wiki/Political_positions_of_Ron_Paul
[snip]
Paul’s opposition to the Federal Reserve is supported by the Austrian Business Cycle Theory, which holds that instead of containing inflation, the Federal Reserve, in theory and in practice, is responsible for causing inflation.[85] In addition to eroding the value of individual savings, this creation of inflation leads to booms and busts in the economy. Thus Paul argues that government, via a central bank (the Federal Reserve), is the primary cause of economic recessions and depressions. He believes that economic volatility is decreased when the free market determines interest rates and money supply.[86] He has stated in numerous speeches that most of his colleagues in Congress are unwilling to abolish the central bank because it funds many government activities. He says that to compensate for eliminating the “hidden tax”[87] of inflation, Congress and the president would instead have to raise taxes or cut government services, either of which could be politically damaging to their reputations. He states that the “inflation tax” is a tax on the poor, because the Federal Reserve prints more money which subsidizes select industries, while poor people pay higher prices for goods as more money is placed in circulation.[88]
His warnings of impending economic crisis and a loss of confidence in the dollar in 2005 and 2006 were at the time derided by many economists, but accelerating dollar devaluation in 2007 has led experts like former Federal Reserve chair Alan Greenspan to reconsider hard money policies such as those of Paul; in his 2007 memoirs, Greenspan described his nostalgia for the gold standard and warned that future conditions could cause “a return of populist, anti-Fed rhetoric, which has lain dormant since 1991.”[89]
Inflation and the Federal Reserve
Paul adheres deeply to Austrian school economics and libertarian criticism of fractional-reserve banking, opposing fiat currency and the inflation thereof;[90] he has written six books on the subjects, has pictures of classical liberal economists Friedrich Hayek, Murray Rothbard, and Ludwig von Mises hanging on his office wall,[91][92] and is a distinguished counselor to the Mises Institute.[93] Paul opposes inflation as an underhanded form of taxation, because it takes value away from the money that individuals hold without having to directly tax them. He sees the creation of the Federal Reserve, and its ability to “print money out of thin air” without commodity backing, as responsible for eroding the value of money,[94] observing that “a dollar today is worth 4 cents compared to a dollar in 1913 when the Federal Reserve got in.” In 1982, Paul was the prime mover in the creation of the U.S. Gold Commission, and in many public speeches Paul has voiced concern over the dominance of the current banking system and called for the return to a commodity-backed currency through a gradual reintroduction of hard currency, including both gold and silver.[23] A commodity standard binds currency issue to the value of that commodity rather than fiat, making the value of the currency as stable as the commodity.
He condemns the role of the Federal Reserve and the national debt in creating inflation.[95][96] The minority report of the U.S. Gold Commission states that the federal and state governments are strictly limited in their monetary role by Article One, Section Eight, Clauses 2, 5, and 6, and Section Ten, Clause 1, “The Constitution forbids the states to make anything but gold and silver coin a tender in payment of debt, nor does it permit the federal government to make anything a legal tender.” The Commission also recommended that the federal government “restore a definition for the term ‘dollar.’ We suggest defining a ‘dollar’ as a weight of gold of a certain fineness, .999 fine.”[97] On multiple occasions in congressional hearings, he has sharply challenged two different chairmen of the Federal Reserve, Alan Greenspan and Ben Bernanke.
He has also called for the removal of all taxes on gold transactions.[98] He has repeatedly introduced the Federal Reserve Board Abolition Act since 1999,[99] to enable “America to return to the type of monetary system envisioned by our Nation’s founders: one where the value of money is consistent because it is tied to a commodity such as gold”; it has received virtually no mainstream news coverage.[100] He opposes dependency on paper fiat money, but also says that there “were some shortcomings of the gold standard of the 19th century ... because it was a fixed price and caused confusion.” He argues that hard money, such as backed by gold or silver, would prevent inflation, but adds, “I wouldn’t exactly go back on the gold standard but I would legalize the constitution where gold and silver should and could be legal tender, which would restrain the Federal Government from spending and then turning that over to the Federal Reserve and letting the Federal Reserve print the money.”[101]
Paul strongly supports legalization of parallel currencies, such as gold-backed notes issued from private markets and digital gold currencies.[102] He would like gold-backed notes (or other types of hard money) and digital gold currencies[103] to compete on a level playing field with Federal Reserve Notes, allowing individuals a choice whether to use sound money or to continue using fiat money.[104][105][106] Paul believes this would restrain inflation, limit government spending, and eventually eliminate the ability of the Federal Reserve to “tax” Americans through inflation (i.e., by reducing the purchasing power of the currency they are holding), which he sees as “the most insidious of all taxes”.[107]
He suggests that current efforts to sustain dollar hegemony, especially since collapse of the Bretton Woods system following the United States’ suspension of the dollar’s conversion to gold in 1971, exacerbate a rationale for war. Consequently, when petroleum producing nations like Iraq, Iran, or Venezuela elect to trade in Petroeuro instead of Petrodollar, it devalues an already overly inflated dollar, further eroding its supremacy as a global currency. According to Paul, along with vested American interests in oil and plans to “remake the Middle East”, this scenario has proven a contributing factor for the war against Iraq and diplomatic tensions with Iran.[108][109]
He has committed himself for over 30 years to educating Americans in libertarian economic principles, such as eliminating the Federal Reserve Board,[110] a private-public banking entity that Paul says has a centralized monopoly control over our money and threatens to impoverish the population through devaluation of the dollar.[111] Paul has many times confronted Congress with a bill to audit the Federal Reserve Board,[112] which Congress has repeatedly turned down.
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